Wal-Mart cutting Generice Drug prices to the Bone

[EagleKeeper]

Link

If this gets expanded nationwide, it will have a major ripple effect of the generic drugs.
the other chains will have to follow suit.

It would help if it can also put pressure on the non-generics

 

[BaliBabyDoc]

I just finished a staff meeting for my research group as we lamented how funding is drying up for research from NIH, state government, and foundations.

Naturally, this report came to mind and I suggested we send our research patients to WalMart to get prescriptions filled.

I still think Wallyworld sux overall but expanding the availability of medications at reasonable prices is a laudable achievement.

 

[VooDooAddict]

I have to say there are some Wal-Mart programs that can certainly be viewed as beneficial to the community. This appears to be one of them. (Too bad they don't also pay the employees better, but at least it's something.) It's possible that this and other beneficial Wal-Mart programs could just be good in theory and very good PR. (I don't have the time, resources, or reason to research and find out.)

Regardless this is also good for Wal-Mart. Even if they only break even or take a slight loss with this program... they will recoup the costs in other ways. I imagine quite a few more people going to Wal-Mart for meds with this program. While they are in Wal-Mart getting meds, might as well get a few other things they need.

 

[Caminetto]

Yep, this also is an area where Walmart can really bring customers into their stores.

Walmart already carries a generic insulin that is about half what other drug stores are asking for the same type.

 

[Pabster]

Originally posted by: VooDooAddict
Regardless this is also good for Wal-Mart. Even if they only break even or take a slight loss with this program... they will recoup the costs in other ways. I imagine quite a few more people going to Wal-Mart for meds with this program. While they are in Wal-Mart getting meds, might as well get a few other things they need.

And that is the goal.

Nothing noble about it. Just another loss leader to get more people in the door.

 

[BDawg]

Maybe they can eliminate all other drug sellers and then jack the price!

 

[ProfJohn]

Originally posted by: Pabster

Originally posted by: VooDooAddict
Regardless this is also good for Wal-Mart. Even if they only break even or take a slight loss with this program... they will recoup the costs in other ways. I imagine quite a few more people going to Wal-Mart for meds with this program. While they are in Wal-Mart getting meds, might as well get a few other things they need.

And that is the goal.

Nothing noble about it. Just another loss leader to get more people in the door.

I think it is a PR move as well.
A while back some talking head was giving "free advice" to Wal-Mart to improve their image and one of the things he mentioned was for them to use their purchasing power to help lower costs in the health insurance field. This might be step one.

His other suggestions: fire Beyonce, like anyone believes she shops at Wal-Mart, also fire all the people being paid to give them PR advice cause they sucked.

 

[ebaycj]

Originally posted by: VooDooAddict
I imagine quite a few more people going to Wal-Mart for meds with this program. While they are in Wal-Mart getting meds, might as well get a few other things they need.

I know for a fact that Walgreens (drug store) sells gallons of milk at a SIGNIFICANT percentage loss to do this exact same thing (meanwhile everything else is marked up at least 100% to cover. one of just about any other item in the store will put the transaction at a profit).

 

[episodic]

Originally posted by: ebaycj

Originally posted by: VooDooAddict
I imagine quite a few more people going to Wal-Mart for meds with this program. While they are in Wal-Mart getting meds, might as well get a few other things they need.

I know for a fact that Walgreens (drug store) sells gallons of milk at a SIGNIFICANT percentage loss to do this exact same thing (meanwhile everything else is marked up at least 100% to cover. one of just about any other item in the store will put the transaction at a profit).

That is the reason I stop and read a mag article while I send in my kid to buy 2 or 3 gallons on the way home every week. . .

 

[BaliBabyDoc]

I have been granted a reprieve from Target.
I can return to heaping scorn on the Smiley from Bentonville.

 

[piasabird]

I saw this report and all I could say was "Wall-mart Rocks!"

 

[BurnItDwn]

They are cutting prices on a select number of generic drugs in a select market.
The generics they are cutting prices on are the ones that are already "cheap."

Sure getting a $10 drug for $4 would be great, but it won't affect the prices on most of the drugs. It just affects the generic drugs that have been on the market a long time that cost them pennies on the dollar anyhow. (example, "hydrochlorathiazide 25mg", probably costs them about $10 for a bottle of 1000) ...

Basicly, Walmart is taking a huge hit in the most profitable area of the pharmacy buisness.

It won't have a major impact on some, but it might be really helpfull for a decent number of people who are on maintenance meds that don't have insurance and are above the income threshold for assistance.


I applaud Walmart on this specific policy, as I think it will be good for communities as a whole.

 

[theeedude]

You still need prescriptions to get most of those drugs though. So sure you can have the drug for $4 a month, but before you even get the first bottle, you'll have to spend a couple hundred on doctor visits, etc.

 

[Strk]

Originally posted by: ProfJohn

Originally posted by: Pabster

Originally posted by: VooDooAddict
Regardless this is also good for Wal-Mart. Even if they only break even or take a slight loss with this program... they will recoup the costs in other ways. I imagine quite a few more people going to Wal-Mart for meds with this program. While they are in Wal-Mart getting meds, might as well get a few other things they need.

And that is the goal.

Nothing noble about it. Just another loss leader to get more people in the door.

I think it is a PR move as well.
A while back some talking head was giving "free advice" to Wal-Mart to improve their image and one of the things he mentioned was for them to use their purchasing power to help lower costs in the health insurance field. This might be step one.

His other suggestions: fire Beyonce, like anyone believes she shops at Wal-Mart, also fire all the people being paid to give them PR advice cause they sucked.

Yeah. While getting people in to shop for stuff is definitely a bonus for Wallyworld, this is also a huge PR boost. With all of the negative press it has received over the years, taking on big pharma is one thing no one will really lose sleep over (except maybe the ass who created the prescription drug bill).

 

[Stunt]

While I applaud Walmart for bringing lower cost pharmaceuticals to the market, there is a negative side to this story which all Americans should pay attention to. When consumers go to CVS, RiteAid, and other retailers; they have access to professional phamacists who can give advice on dosages and help diagnose. Walmart is effectively setting the price of this service at zero, which could have lead to improper use and overconsumption of over the counter drugs.

That being said, it's not like the drug companies haven't pushed consumers before.

 

[tommywishbone]

I'll believe the PR machine, when I walk into Wal*mart (I've never been in one before) and they actually charge me $4 plus tax. Until then... talk is cheap pharmecuticals aren't.

 

[Strk]

Originally posted by: Stunt
While I applaud Walmart for bringing lower cost pharmaceuticals to the market, there is a negative side to this story which all Americans should pay attention to. When consumers go to CVS, RiteAid, and other retailers; they have access to professional phamacists who can give advice on dosages and help diagnose. Walmart is effectively setting the price of this service at zero, which could have lead to improper use and overconsumption of over the counter drugs.

That being said, it's not like the drug companies haven't pushed consumers before.

Wallyworld already sells all of those OTC at low prices. We're talking about prescription drugs here. It's a lame excuse either way.

 

[rchiu]

Originally posted by: BurnItDwn
They are cutting prices on a select number of generic drugs in a select market.
The generics they are cutting prices on are the ones that are already "cheap."

Sure getting a $10 drug for $4 would be great, but it won't affect the prices on most of the drugs. It just affects the generic drugs that have been on the market a long time that cost them pennies on the dollar anyhow. (example, "hydrochlorathiazide 25mg", probably costs them about $10 for a bottle of 1000) ...

Basicly, Walmart is taking a huge hit in the most profitable area of the pharmacy buisness.

It won't have a major impact on some, but it might be really helpfull for a decent number of people who are on maintenance meds that don't have insurance and are above the income threshold for assistance.


I applaud Walmart on this specific policy, as I think it will be good for communities as a whole.

Yeah, just like Walmart brought down the price and drive local mom and pop stores out of business.....

Do you know Walmart only carries 15%~20% prescription drugs that real pharmacies like Walgreens and CVS carry? Yeah, of course they can buy the most popular drugs in huge quantities and sell at a low price. Walgreens and CVS have to serve people with different illness by carrying wide variety of drugs and take a hit on larger inventory and more complex logistic system. Walgreens and CVS also hires top pharamacist and pay big bucks for them, while Walmart hires bunch of pharamacy technicians and don't even pay their health care.

Well, I hope people can see through what Walmart is doing, and hope real pharmacies like CVS and Walgreens stay in business and help the rest of us when we need a real pharmacy.

 

[beer]

Originally posted by: rchiu

Originally posted by: BurnItDwn
They are cutting prices on a select number of generic drugs in a select market.
The generics they are cutting prices on are the ones that are already "cheap."

Sure getting a $10 drug for $4 would be great, but it won't affect the prices on most of the drugs. It just affects the generic drugs that have been on the market a long time that cost them pennies on the dollar anyhow. (example, "hydrochlorathiazide 25mg", probably costs them about $10 for a bottle of 1000) ...

Basicly, Walmart is taking a huge hit in the most profitable area of the pharmacy buisness.

It won't have a major impact on some, but it might be really helpfull for a decent number of people who are on maintenance meds that don't have insurance and are above the income threshold for assistance.


I applaud Walmart on this specific policy, as I think it will be good for communities as a whole.

Yeah, just like Walmart brought down the price and drive local mom and pop stores out of business.....

Do you know Walmart only carries 15%~20% prescription drugs that real pharmacies like Walgreens and CVS carry? Yeah, of course they can buy the most popular drugs in huge quantities and sell at a low price. Walgreens and CVS have to serve people with different illness by carrying wide variety of drugs and take a hit on larger inventory and more complex logistic system. Walgreens and CVS also hires top pharamacist and pay big bucks for them, while Walmart hires bunch of pharamacy technicians and don't even pay their health care.

Well, I hope people can see through what Walmart is doing, and hope real pharmacies like CVS and Walgreens stay in business and help the rest of us when we need a real pharmacy.

Paranoid. 80% of americans have health insurance. That 80% will go where it is most convenient which is a corner store, not a walmart where it takes longer to park and walk than to get in and get out at most walgreens or CVS pharmacies. These generic pharms willl help those who can't get it anywhere else and don't have health insurnace.

 

[tommywishbone]

"... 80%... "

Links to back that number up please. Thank you.

 

[episodic]

Originally posted by: beer

Originally posted by: rchiu

Originally posted by: BurnItDwn
They are cutting prices on a select number of generic drugs in a select market.
The generics they are cutting prices on are the ones that are already "cheap."

Sure getting a $10 drug for $4 would be great, but it won't affect the prices on most of the drugs. It just affects the generic drugs that have been on the market a long time that cost them pennies on the dollar anyhow. (example, "hydrochlorathiazide 25mg", probably costs them about $10 for a bottle of 1000) ...

Basicly, Walmart is taking a huge hit in the most profitable area of the pharmacy buisness.

It won't have a major impact on some, but it might be really helpfull for a decent number of people who are on maintenance meds that don't have insurance and are above the income threshold for assistance.


I applaud Walmart on this specific policy, as I think it will be good for communities as a whole.

Yeah, just like Walmart brought down the price and drive local mom and pop stores out of business.....

Do you know Walmart only carries 15%~20% prescription drugs that real pharmacies like Walgreens and CVS carry? Yeah, of course they can buy the most popular drugs in huge quantities and sell at a low price. Walgreens and CVS have to serve people with different illness by carrying wide variety of drugs and take a hit on larger inventory and more complex logistic system. Walgreens and CVS also hires top pharamacist and pay big bucks for them, while Walmart hires bunch of pharamacy technicians and don't even pay their health care.

Well, I hope people can see through what Walmart is doing, and hope real pharmacies like CVS and Walgreens stay in business and help the rest of us when we need a real pharmacy.

Paranoid. 80% of americans have health insurance. That 80% will go where it is most convenient which is a corner store, not a walmart where it takes longer to park and walk than to get in and get out at most walgreens or CVS pharmacies. These generic pharms willl help those who can't get it anywhere else and don't have health insurnace.

How long before the health insurance companies looking to save a dime - requires you to get drugs from Wal-mart or other 'lowest price sources'. . .

 

[Strk]

Originally posted by: tommywishbone
"... 80%... "

Links to back that number up please. Thank you.

80% insured is still 60 million people who are uninsured; hardly anything to brag about. The actual number, I believe, is around 40 million.

 

[BurnItDwn]

Originally posted by: episodic

Originally posted by: beer

Originally posted by: rchiu

Originally posted by: BurnItDwn
They are cutting prices on a select number of generic drugs in a select market.
The generics they are cutting prices on are the ones that are already "cheap."

Sure getting a $10 drug for $4 would be great, but it won't affect the prices on most of the drugs. It just affects the generic drugs that have been on the market a long time that cost them pennies on the dollar anyhow. (example, "hydrochlorathiazide 25mg", probably costs them about $10 for a bottle of 1000) ...

Basicly, Walmart is taking a huge hit in the most profitable area of the pharmacy buisness.

It won't have a major impact on some, but it might be really helpfull for a decent number of people who are on maintenance meds that don't have insurance and are above the income threshold for assistance.


I applaud Walmart on this specific policy, as I think it will be good for communities as a whole.

Yeah, just like Walmart brought down the price and drive local mom and pop stores out of business.....

Do you know Walmart only carries 15%~20% prescription drugs that real pharmacies like Walgreens and CVS carry? Yeah, of course they can buy the most popular drugs in huge quantities and sell at a low price. Walgreens and CVS have to serve people with different illness by carrying wide variety of drugs and take a hit on larger inventory and more complex logistic system. Walgreens and CVS also hires top pharamacist and pay big bucks for them, while Walmart hires bunch of pharamacy technicians and don't even pay their health care.

Well, I hope people can see through what Walmart is doing, and hope real pharmacies like CVS and Walgreens stay in business and help the rest of us when we need a real pharmacy.

Paranoid. 80% of americans have health insurance. That 80% will go where it is most convenient which is a corner store, not a walmart where it takes longer to park and walk than to get in and get out at most walgreens or CVS pharmacies. These generic pharms willl help those who can't get it anywhere else and don't have health insurnace.

How long before the health insurance companies looking to save a dime - requires you to get drugs from Wal-mart or other 'lowest price sources'. . .

Episodic ...
Insurance companies don't pay retail price ... they pay AWP + cost.
AWP is "average wholesale price", cost is a fee that the third party sets when negotiating with pharmacy chains.
I believe the fee can vary from chain to chain, but the AWP is a standard number for each NDC.


beer...
Yup, I fully agree with you on that. I actually have been a Walgreens employee for the last 10 years, I spent about 5 years as a pharmacy tech and then went over to IT (currently I'm in a "batch admin" supporting the central production pharmacy servers. I am not an official spokesperson, and I don't think I'm supposed to release any potentially proprietary information, but I will say that a good amount over 80% of the prescriptions that are filled are covered by a third party (insurance or medicaid.) Also, Even when I worked in the pharmacy, Walmart's prices have always been lowwer in general. Sure we had some where ours was priced lowwer, but in general, they set their prices lowwer. Walgreens (and I'm sure CVS as well as other "corner drugstores") get customers mostly due to convenience and generally better (or often "faster") service (though I have witnessed some less than optimal service in my days in the pharmacy.)

rchiu...
Walgreens and CVS are both doing very well right now. While Walgreens guys like me may poke fun at CVS from time to time, we do understand that competition is a good thing overall. The $4 prescriptions will help some people (the ones who are uninsured that don't qualify for medicaid or medicare RX benefits. Walgreens has a program called "Senior Dividends" that has been nationwide for sereval years now. It benefits Senior Citizens who don't have any third party coverage. This program credits 10% of the retail price of ALL prescriptions that they purchase to gift cards that they can use on any merchandise in the store. Seniors are generally better off with the Senior Dividends then the $4 prescriptions in most cases, assuming merchandise is also being picked up. I don't know what CVS has similar to that, but given their growth and customer base, I'm sure they have some good programs too.



EDIT:

See the link below to get the exact list of drugs that they are discounting.
There isn't a huge selection, and the generics they listed mostly cost less than $10 for a package of 1000.

List of drugs available here as PDF file

 

[rchiu]

Originally posted by: BurnItDwn

Originally posted by: episodic

Originally posted by: beer

Originally posted by: rchiu

Originally posted by: BurnItDwn
They are cutting prices on a select number of generic drugs in a select market.
The generics they are cutting prices on are the ones that are already "cheap."

Sure getting a $10 drug for $4 would be great, but it won't affect the prices on most of the drugs. It just affects the generic drugs that have been on the market a long time that cost them pennies on the dollar anyhow. (example, "hydrochlorathiazide 25mg", probably costs them about $10 for a bottle of 1000) ...

Basicly, Walmart is taking a huge hit in the most profitable area of the pharmacy buisness.

It won't have a major impact on some, but it might be really helpfull for a decent number of people who are on maintenance meds that don't have insurance and are above the income threshold for assistance.


I applaud Walmart on this specific policy, as I think it will be good for communities as a whole.

Yeah, just like Walmart brought down the price and drive local mom and pop stores out of business.....

Do you know Walmart only carries 15%~20% prescription drugs that real pharmacies like Walgreens and CVS carry? Yeah, of course they can buy the most popular drugs in huge quantities and sell at a low price. Walgreens and CVS have to serve people with different illness by carrying wide variety of drugs and take a hit on larger inventory and more complex logistic system. Walgreens and CVS also hires top pharamacist and pay big bucks for them, while Walmart hires bunch of pharamacy technicians and don't even pay their health care.

Well, I hope people can see through what Walmart is doing, and hope real pharmacies like CVS and Walgreens stay in business and help the rest of us when we need a real pharmacy.

Paranoid. 80% of americans have health insurance. That 80% will go where it is most convenient which is a corner store, not a walmart where it takes longer to park and walk than to get in and get out at most walgreens or CVS pharmacies. These generic pharms willl help those who can't get it anywhere else and don't have health insurnace.

How long before the health insurance companies looking to save a dime - requires you to get drugs from Wal-mart or other 'lowest price sources'. . .

Episodic ...
Insurance companies don't pay retail price ... they pay AWP + cost.
AWP is "average wholesale price", cost is a fee that the third party sets when negotiating with pharmacy chains.
I believe the fee can vary from chain to chain, but the AWP is a standard number for each NDC.


beer...
Yup, I fully agree with you on that. I actually have been a Walgreens employee for the last 10 years, I spent about 5 years as a pharmacy tech and then went over to IT (currently I'm in a "batch admin" supporting the central production pharmacy servers. I am not an official spokesperson, and I don't think I'm supposed to release any potentially proprietary information, but I will say that a good amount over 80% of the prescriptions that are filled are covered by a third party (insurance or medicaid.) Also, Even when I worked in the pharmacy, Walmart's prices have always been lowwer in general. Sure we had some where ours was priced lowwer, but in general, they set their prices lowwer. Walgreens (and I'm sure CVS as well as other "corner drugstores") get customers mostly due to convenience and generally better (or often "faster") service (though I have witnessed some less than optimal service in my days in the pharmacy.)

rchiu...
Walgreens and CVS are both doing very well right now. While Walgreens guys like me may poke fun at CVS from time to time, we do understand that competition is a good thing overall. The $4 prescriptions will help some people (the ones who are uninsured that don't qualify for medicaid or medicare RX benefits. Walgreens has a program called "Senior Dividends" that has been nationwide for sereval years now. It benefits Senior Citizens who don't have any third party coverage. This program credits 10% of the retail price of ALL prescriptions that they purchase to gift cards that they can use on any merchandise in the store. Seniors are generally better off with the Senior Dividends then the $4 prescriptions in most cases, assuming merchandise is also being picked up. I don't know what CVS has similar to that, but given their growth and customer base, I'm sure they have some good programs too.



EDIT:

See the link below to get the exact list of drugs that they are discounting.
There isn't a huge selection, and the generics they listed mostly cost less than $10 for a package of 1000.

List of drugs available here as PDF file

I know Walgreens is doing well, I happen to work at Walgreens 🙂 and jumped on the employee stock purchase plan when the stock was down after the news.

The only thing I want to get people to think about is if absolute cheaper price is the way to go for a healthcare system. I want to point out how Walmart arrived at those low prices, how they cut corners and how they focus on older and popular generic drugs to reduce their inventory and logistic costs.

Remember, pharmacy business is nothing to Walmart, they can afford to cut corners and cut price in the drug business to bring customer in for their other retail business. But if the average consumer don't see through what they are doing, and bite into their media hype on how they cut drug price to benefit the consumers, consumer will end up having a low grade mass retail store focusing only on price and cutting cost instead of their well-being as their major wellness solution provider.

 

[ProfJohn]

Originally posted by: rchiu
I know Walgreens is doing well, I happen to work at Walgreens 🙂 and jumped on the employee stock purchase plan when the stock was down after the news.

The only thing I want to get people to think about is if absolute cheaper price is the way to go for a healthcare system. I want to point out how Walmart arrived at those low prices, how they cut corners and how they focus on older and popular generic drugs to reduce their inventory and logistic costs.

Remember, pharmacy business is nothing to Walmart, they can afford to cut corners and cut price in the drug business to bring customer in for their other retail business. But if the average consumer don't see through what they are doing, and bite into their media hype on how they cut drug price to benefit the consumers, consumer will end up having a low grade mass retail store focusing only on price and cutting cost instead of their well-being as their major wellness solution provider.

That sounds a lot like a corporate response line, did you read that off some e-mail? 😉

I worked at an inner city Walgreens, sucks to have to go out and check on your car during lunch hour to make sure it and its radio are still there.

BTW: I worked at Target as well and there pharmacists are just as concerned about the well being of its patients as Walgreens, CVS or any other drug store. It is not the people at the user level making decisions that affect the quality of health care, it is the people sitting in a fancy office counting beans that make those decisions.