By ANNE D'INNOCENZIO, AP Business Writer 54 minutes ago

NEW YORK - Wal-Mart plans to begin selling nearly 300 generic prescription drugs for a sharply reduced price, offering a big lure for bargain-seeking customers and presenting a challenge to competing pharmacy chains.
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The world's biggest retailer said Thursday that it will test its sales program, in which 291 generic drugs will be sold at $4 for a month's supply, in Florida. The drugs involved provide treatments for conditions ranging from allergies to high-blood pressure.

Selling generic drugs at prices that don't offer much if any margin for profit could serve two purposes for Wal-Mart: It could draw customers away from big pharmacy chains to Wal-Mart stores that offer a much wider array of products, and it could help Wal-Mart with an image problem stemming from its policies on health insurance for employees.

"We're able to do this by using one of our greatest strengths as a company — our business model and our ability to drive costs out of the system, and the model that passes those costs savings to our customers," Bill Simon, executive vice president of the company's professional services division, said in announcing the plan at a Tampa, Fla., store. "In this case were applying that business model to health care."

Wal-Mart Stores Inc. officials said the reduced price represents a savings to the customer of up to 70 percent on some drugs. The average monthly cost for a generic drug prescription is $28.74, according to the National Association of Chain Drug Stores. For branded drugs, that figure is $96.01.

Critics said the plan was a cover for Wal-Mart's failure to provide its employees adequate health care. They contend that the company's benefits are too stingy, forcing taxpayers to absorb more of the cost as the workers lacking coverage turn to state-funded health care programs.

The program will be launched on Friday at 65 Wal-Mart, Neighborhood Market and Sams' Club pharmacies in the Tampa Bay area and will be expanded to the entire state in January.

Simon wouldn't be specific about why Florida and specifically the Tampa Bay area was chosen for the rollout of the initiative, saying only that there was a need for it here.

The company said it plans to expand the program to as many states as possible next year.

Simon said the 291 generic drugs include "the most commonly prescribed drugs for the some of the most common illnesses that face Americans today, including cardiac disease, asthma, diabetes, glaucoma, Parkinson's (disease) and thyroid conditions."

Simon wouldn't give details on how much the plan is expected to cost Wal-Mart or the company's dealings with the drug companies involved.

The $4 prescriptions are not available by mail order and are being offered online only if picked up in person in the Tampa Bay area.

In a conference call with reporters, Simon said that the generic drugs would not be sold at a loss to entice customers into the stores, a strategy that has been used in Wal-Mart's toy business.

He said Wal-Mart is working with drugmakers to help them be more efficient, but added, "We are working with them as partners. We are not pressuring them to reduce prices."

Tampa Wal-Mart pharmacy customer Pat Sullivan praised the company's initiative. The retired Massachusetts police officer said $4 generic prescriptions are a tremendous help.

"I'm on disability and my benefits run out by the end of the month," he said. "It comes down to where do I go for a $100 prescription? I have no outlet other than to break a pill in half and take half today and half tomorrow."

The initiative — the fourth since last October that Wal-Mart has moved to improve health benefits — drew criticism from one of its most vocal critics, union-backed Wake Up Wal-Mart.

"While lowering prescription drug costs is a good thing, Wal-Mart cruelly ignores the fact that it fails to provide company health care to over half of its employees which leaves 46 percent of its workers children uninsured or on public health care," said Chris Kofinis, spokesman for Wake Up Wal-Mart, in a statement. "Wal-Mart needs to answer one very simple, but serious question — why not just improve the health care coverage of its employees?

Wal-Mart's recent moves to improve its health care included relaxing eligibility requirements for its part-time employees who want health insurance, and extending coverage for the first time to the children of those employees. Part-time employees, who had to work for Wal-Mart for two years to qualify, now have to work at the company for one year. This year, Wal-Mart also expanded a trial run of in-store clinics, aimed at providing lower cost non-emergency health care to the public.

Last October, Wal-Mart offered a new lower-premium insurance aimed at getting more of its work force on company plans.

But critics argue that Wal-Mart's coverage calls for a deductible that requires workers to pick up the first $1,000 in medical expenses, and the deductible rises to a maximum of $3,000 for families.

Wake Up Wal-Mart has called upon Bentonville, Ark.-based Wal-Mart to offer better health care coverage and higher pay to employees.

This past summer, Wal-Mart won a successful fight against a first-of-its-kind state law that would have required the retailer to spend more on employee health care in Maryland. A federal judge ruled in July that it was invalid under federal law. But other states are considering similar legislation aimed at the company.

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GO WALMART!

I refuse to cheer for Wal-Mart because I know they make decisions based solely on what will make money for Wal-Mart. They could care less if people get cheap drugs.

This seems like a good thing, but Wal-Mart decisions have a way of changing whole industries in amazing ways. I hope the other foot isn't dropping shortly behind this one.

Damn the bastards at Wal-mart and their evil money gougin... wait a minute...

Good on em'. If it works in the business plan and they make drugs cheaper for people, win, win.

If it brings down the costs of prescription drugs, then god bless 'em.

this is really interesting. i bet they chose florida because of the population of elderly.

it would be fantastic is this cascades into affordable Rx's for all...but i am understandably mistrustful of walmart's new association with big pharma.

I am as happy as anyone that prices are dropping, but I am always amused when people talk about how much drugs and treatments cost. People are willing to drop $100 for a TV, but not the $5 co-pay for a drug that cost countless dollars in research, testing, and production to produce. Since when should a commodity be free? If I was on their end, I would not produce a product that would not be profitable. That is how the system works.

luxury vs. necessity

People can refuse treatment and medication just as they can refuse to buy a new TV. In my experience, they often do forgo medicine in favor of TVs, cars, appliances, cigs, and sports tickets.

my medication is not a luxury, it is not something i choose, and my life is dependent on these medications.

and they are really fucking expensive.

And with the incredible amounts of research, testing, work, and production that goes into each one, I think they should be. I do not do research for free. I would not expect drug companies to make drugs for free. I would not expect to get my drugs for free either. It is ridiculous to me.

will you allow yourself to be happy for those customers who are now saving a bit of money for their prescriptions? is that ok?

*advises Mrs. PD to shift all of her prescriptions to WalMart*

Yeah, Walmart is a primary factor in the off-shoring of most of America's manufacturing capability. Ask Levi's jeans if you don't believe me. I'm not sure that kind of price pressure is a good thing is good thing for the pharma industry whose profits aren't very good.

page 2 of the playbook

eh, i'm sure someone is getting screwed somewhere along the line.

insightful rebutal.

My stepfather has been in the pharmacy/pharmacy management industry for 30 years.

I've been treated to some unbelievable extravagances courtesy of Phizer, Merck, etc. One time, we had a rooftop across from Wrigley Field rented out for us. 20 people, $16,000. Why? Because Phizer was trying to sell a drug to a management company. They blew $16,000 on a few familes of a potential client. That's a lot of money for something as silly as a baseball game.
I could tell you how I had another drug rep spend over $1000 on booze for 2 other people and myself this spring in ONE NIGHT. Why? They wanted to sell their drug to the same management company. So they toss $400 bottles of wine down the throats of whoever their potential client is hanging out with that night.

Don't tell me they can't lower prices. Seriously, give me a fucking break.

$5 for a co pay? when was the last time you took a prescription drug?

most co pay tiers are now $10, $25, and $40. when you take regular Rx's, it has to be part of the budget, not a few bucks that you might otherwise drop at starbucks.

like AS said, pharmaceutical comanies spend exorbitant amounts of money on entertaining doctors and other prospective clientele, and i have to pay for that. illness is not something i choose, i am at their mercy, as are millions of other people, and they take advantage of that and call it "supply and demand" and justify it by saying, "well we need to make a profit".

there is profit, and then there is exploitation.

Maybe Wal-Mart can spend some of the extra money coming in on some fucking health insurance for their employees. Scumbags. The nations largest employer and they treat their workers like shit.

Target's gonna match it!