Wal-Mart expands low-cost drug program

Wal-Mart Stores Inc. is expanding a program offering $4 prescriptions for some generic drugs to 14 more states, two weeks after rolling out the low-cost program in Florida, the world’s largest retailer said Thursday.

Analysts said the main benefit for Wal-Mart is in drawing more shoppers into its stores who may come for prescriptions and then stay to buy in other departments.

“It must be working for them. They must be seeing a benefit if they’re expanding this rapidly,” said Richard D. Hastings, senior retail analyst with Bernard Sands LLC.

Reaction from Wal-Mart’s big chain rivals was mixed.

Target Corp., the no. 2 discounter behind Wal-Mart, said it will match the discount in all the same states except Alaska and Vermont, where it has no stores.

Target, based in Minneapolis, said in a statement the move was “consistent with our long-standing practice to be price competitive with Wal-Mart on like items in local markets”.

Other chains said they would not change prices that they contend are already competitive, especially for people with insurance who only foot the cost of a co-pay.

“Wal-Mart’s limited price promotion is in response to the increasing number of seniors choosing Walgreens for their pharmacy needs. Therefore, Walgreens will not match Wal-Mart’s promotion,” Deerfield, Ill.-based Walgreen Co., the nation’s largest drugstore chain by sales, said in a statement.

Kmart, which is part of Sears Holding Corp., noted that it started offering 184 generic prescriptions in May in all its 1,100 pharmacies nationwide for $15 for a 90-day supply and would stand by its program.

Wal-Mart’s plan covers a month’s supply of 314 prescriptions. That number is made up of 143 drugs in a variety of dosages and solid or liquid forms.

Wal-Mart held news conferences in states from Vermont to Alaska to announce the move as it speeds toward national coverage by the end of the year. Wal-Mart will continue to expand into other states “as quickly as possible”, although regulatory and legal hurdles my slow then move in some states, company spokesman Dave Tovar said.

Critics, including rival non-chain pharmacies, said the plan covers only a fraction of a prescription drug market that includes about 8,700 generics approved by the FDA.

“This is a public relations stunt meant to drive foot traffic. Most people will find their prescriptions do not fall under the $4 plan,” said Charlie Sewell, senior vice president of government affairs at the National Community Pharmacists Association. The NCPA says it represents about 24,000 non-chain pharmacies.

Wal-Mart’s program was extended Thursday to the following states: Alaska, Arkansas, Arizona, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas and Vermont.