Relief for Some but Maybe Not Many in Wal-Mart Plan for $4 Generic Drugs

[DeepModem Mom]

NYT: Relief for Some but Maybe Not Many in Wal-Mart Plan for $4 Generic Drugs
By MICHAEL BARBARO and REED ABELSON
Published: September 22, 2006

At first glance, Wal-Mart’s plan to sharply cut the cost of generic drugs, to $4, seems like a signal event in American health care. It could make scores of treatments affordable to the uninsured, reduce the burden on Medicaid and bring competitive pricing to the pharmacy industry....

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But a close examination of the program, with details confirmed by the company yesterday, suggests that its impact could be blunted by several factors.

The plan, which is said to cover 300 drugs, includes only about 124 separate medicines in various dosages, like 12 versions of the popular antibiotic amoxicillin. It leaves out some popular drugs altogether, like the generic version of the cholesterol-lowering treatment Zocor....(W)hile uninsured people should benefit from the program, those with insurance may save only a dollar or so, making a trip to Wal-Mart not worth their while, analysts said. In Florida, where the program will have its debut, most people on Medicaid pay nothing and may have little incentive to shop around for cheaper prescription drugs....


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Wal-Mart said it would not lose money on the low-cost generic drugs — and, in fact, several industry analysts predicted the company’s pharmacy business would benefit from the new plan. Unlike CVS or Walgreen, which rely on prescription sales for most of their revenues, Wal-Mart’s pharmacy business represents less than 10 percent of its total revenue and the company has identified it as an area that needs improvement.

By luring customers of all incomes into the store at least once a month to fill generic drug prescriptions, Wal-Mart could increase overall pharmacy and store sales, these analysts said....

http://www.nytimes.com/2006/09/22/business/22generic.html