Uh -oh! here comes trouble!
Wal-Mart has announced that it will sell a range of some 291 generic drugs for $4 a month in Florida, including drugs for treating cardiac disease, asthma, diabetes, thyroid disease, glaucoma, and Parkinson's disease.
The plan hasn't been fleshed out yet, but it certainly puts a stick into the ant nest of pharmaceutical sales.
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.
It has to have the big drug chains in the US (CVS, Walgreens, etc.) scurrying for a response.
It certainly makes a train wreck of much of Medicare Plan D prescription plan, especially the insurers who carry it.
And it may well give a big push to generic drug companies at the expense of Big Pharma.
As Wal-Mart does at its best, this may trigger a major anti-inflationary pressure in the area where inflation is greatest, healthcare costs.
Hat tip. More.
Wal-Mart has announced that it will sell a range of some 291 generic drugs for $4 a month in Florida, including drugs for treating cardiac disease, asthma, diabetes, thyroid disease, glaucoma, and Parkinson's disease.
The plan hasn't been fleshed out yet, but it certainly puts a stick into the ant nest of pharmaceutical sales.
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.
It has to have the big drug chains in the US (CVS, Walgreens, etc.) scurrying for a response.
It certainly makes a train wreck of much of Medicare Plan D prescription plan, especially the insurers who carry it.
And it may well give a big push to generic drug companies at the expense of Big Pharma.
As Wal-Mart does at its best, this may trigger a major anti-inflationary pressure in the area where inflation is greatest, healthcare costs.
Hat tip. More.
4 comments:
I've heard that Target is thinking of following suit.
These two chains work on different types of marketing philosophies: discount vs quality.
Interesting to see what happens.
Eric
www.healthfranchise.info
Awesome! You got to love Wally World!
=After Market Release=
=All Financial News=
=All Healthcare News=
BENTONVILLE, Ark. September 22nd, 2006 — Wal-Mart Stores Inc. Chief Executive H. Lee Scott said in a statement released today that Dr. Peter Rost, M.D. has been hired to spearhead the company’s nation-wide push into the affordable drug distribution business which will eventually include both generic and branded drugs and healthcare services for customers and associates. The company is initially launching its innovative cost-saving drug business in the Tampa, FL area and focusing initially on a limited number of generic drugs. Dr. Rost, a well-known advocate of drug re-importation to expand access to drugs by reducing their price was hired due to his "knowledge of how to turn the established pharmaceutical manufacturing and distribution system inside-out to benefit customers, Wal-Mart’s primary focus.” said CEO Scott. After several highly secretive discussions between Wal-Mart executives and the controversial M.D. over the past several months, Scott stated, “We were all amply impressed with Dr. Rost’s passion to help fix Americas broken health-care system and to make life-enhancing drugs far more affordable to all Wal-Mart customers and associates." Dr. Rost was formerly Marketing Vice President at Pfizer, the world's largest research-based pharmaceutical company.
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