Health Insurance and Low Cost Generic Drugs
In last quarter of 2006, Wal-Mart began a program in Florida where a list of generic prescription drugs could be purchased for $4.00. This was a boon to seniors and others with limited or no health insurance Wal-Mart soon expanded the pilot program designed to help people manage the costs of medical insurance and healthcare - to 11 other states, and also expanded the drugs on the program from about 150 to over 300. As of this year the program has gone nationwide to all Wal-Mart stores except those in South Dakota, where Wal-Mart does not operate the pharmacies within those stores.
The program was designed to help people nationwide without health insurance and those who have low cost health insurance that may not include a prescription drug coverage. The program has been very successful and has prompted other retailers to follow suit. Target stores now also offers a $4 generic drug discount program. Seeing the success with Wal-Mart, Target offers the 4-dollar program in all of it stores nationwide.
These programs are a win for these "Big Box" retailers and for consumers who are trying to lower their healthcare costs and find more affordable options to traditional health insurance. Because of the buying power of a Wal-Mart or a Target, selling long term generic drugs at deeply discounted prices - is not as one might expect - a "loss leader" for the retailer. They can still usually buy the drugs listed from wholesalers at less then the 4.00 price. The discount programs do attract more shoppers to the store, and yet the stores remain profitable. Consumers without prescription drug coverage, or without any medical insurance at all - can expect to save anywhere from 1.00 - to over 20.00 per prescription under the programs. And of course the retailers also benefit from improved public image, especially Wal-Mart which has taken some heat in recent years for failing to provide affordable health insurance to its employees. Economists and senior advocates see the programs as helping to fill a need for many especially seniors.
K-mart actually was the first of the Mega Stores to offer such a discount plan - introduced prior to Wal-Mart's at 5.00 per prescription. Since then in addition to Target, Wegman's, BJ Wholesalers, and others have jumped on the 4-dollar generic prescription drug bandwagon. However not everyone is happy about the programs. Charles Sewell an independent pharmacist sees it as another attack on Mom and Pop drug stores by the big chains. Says Sewell, "Wal-Mart is always trying to force small businesses out of business. This is predatory pricing." Some legislators agree. Several states have on the books what are known as "Unfair Practices Acts" that prohibit retailers to sell products at deeply discounted or below cost prices. As a result in several states more than a dozen drugs on the lists of Target and almost 50 on Wal-Mart's sell above the 4.00 discount - but still significantly less then the full retail price of a the generic or its much higher priced name-brand.