Drug wars at the large chain stores

Big-box retailers like Wal-Mart and Target have entered a drug price war with each other, meaning lower prices for consumers, says FoxReno.com.

The effect has been widespread:

Wal-Mart's announcement that it was launching a test program to sell 291 generic drugs for $4 a prescription in the Tampa area set off a scramble among all pharmacy retailers.

Target matched Wal-Mart's offer immediately and K-Mart publicised its 90-day generics for $15.

Other regional supermarket stores like Giant Eagle of Pennsylvania and Meijer of Michigan even started offering a handful of generic antibiotics for free.

The benefit for consumers is striking the National Association of Chain Drug Stores say the cost of a 30-day supply of an average generic prescription drug was about $29.82 in 2005, compared with $101.71 for name-brand prescriptions.

The simple $4 price has also brought transparency to the retail drug arena. Until recently, when a drug's patent expired, pharmacies would charge as much as they liked for the generic version. One study found that the mark-ups would be as high as 4,000 per cent. For instance, in 2004, health economist Devon Herrick found that a 30-day prescription of Prozac's generic version, Fluoxetine, was selling in Iowa for $55, in some places in Florida for $43, in Virginia for $45, and at the discount wholesale club Costco Wholesale for $7.09.

"People are just not aware of these variations, and most of them don't compare prices," says Herrick, a senior fellow at the National Center for Policy Analysis. "Pharmacies take advantage of consumers' lack of knowledge and mark up prices substantially."

Source: Drug Wars At The Big-Box Stores, FoxReno.com, May 25, 2007.

For text: http://www.foxreno.com/money/13381568/detail.html

For more on Health Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=16

FMF Policy Bulletin/ 29 May 2007

Publish date: 08 June 2007
Views: 403

Health Care, Drugs, News

The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation. This article may be republished without prior consent but with acknowledgement to the author.

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