Leader Blues

Saturday, October 21, 2006

TOP STORY >>Drug competition heats up

IN SHORT: A $4 prescription drug program Wal-Mart tested in the Tampa, Fla., area expands to Arkansas and 13 other states, but many competitors say they’ll match the program.

By JOAN MCCOY AND SARA GREENE
Leader staff writers

Some local pharmacists will compete with Wal-Mart’s lower prices for generic drugs, although at least one chain — Walgreens — said it will leave prices as they are.

On Thursday, Wal-Mart ex-panded a program offering $4 prescriptions for some generic drugs to 14 more states including Ar-kansas, two weeks after rolling out the low-cost program in Florida.

Wal-Mart first launched the program in the Tampa, Fla., area two months ago and expanded it to all of Florida two weeks ago in what it called an effort to save working Americans money on health care.

‘PREDATORY PRICING’
Wanda Burton, a pharmacist at Fred’s Discount Store, 428 S. James St. in Jacksonville, said she was not worried by Wal-Mart’s latest offer.

“A lot of people like us for our quick service and our convenient drive-through,” Burton said. The Wal-Mart Supercenter at 2000 John Harden Dr. does not have a drive-through pharmacy.

Fred’s is implementing a $4 generic prescription program at five of its stores in Tennessee. The company has 283 pharmacies throughout the South.

Longtime Beebe resident Becky Short said insurance provider Humana covers only a fraction of the cost of her prescriptions each month. If any of the medicines she takes are among the generics on Mal-Mart’s list, she will buy them there and save some money.

“If they have got any of the ones I buy, yes, I would use it,” Short said. “I’d go once a month.”

Pharmacist Lisa Self with The Medicine Shoppe in Cabot has mixed views on Wal-Mart’s new prescription plan.

“It will serve a need for patients who have no other resources for medications (because of price), but for others looking for more personalized service, they may not find it there,” Self said.

Pharmacists in Beebe were reluctant to talk openly about Wal-Mart’s new program that could cut into their business, but one pharmacist, who asked for anonymity, listed several possible problems for customers who leave the pharmacist who knows them for the cheaper generic drugs now available at Wal-Mart.

The pharmacist said customers who take a lot of prescription medicine, especially older customers, become accustomed to the appearance of the pills they take. The drugs selling for $4 at Wal-Mart could look different from what they take now and that could be confusing to some.

Also a concern is the possibility that a volume dealer like Wal-Mart might not be aware of all the different drugs a customer has purchased, increasing the chances of problems from drug interactions, the pharmacist said.

The pharmacist called the new program “predatory pricing” and said the motive is greed, not philanthropy.
Customers might go to Wal-Mart for the generic drugs that are possibly manufactured in China or India, the pharmacist said. But chances are they will shop while they wait.

“They didn’t become the world’s largest retailer by selling things at a loss,” the pharmacist said.

SENIOR SAVINGS
Critics, including rival non-chain pharmacies, say the plan covers only a fraction of a prescription drug market that includes about 8,700 generics approved by the Food and Drug Administration.

Wal-Mart’s plan covers a month’s supply of 143 drugs in a variety of dosages and solid or liquid forms. There are 24 categories of medication on the list to treat diabetes, cholesterol, asthma and colds. There are also anti-psychotic drugs and anti-depressant medicines found on the list. The company says the drugs represent 25 percent of prescriptions that it currently dispenses nationwide.

A 30-day supply of medication is the amount the doctor prescribes. For example if a doctor recommends taking a pill three times a day, a 30-day supply would include 90 pills.

The news of the $4 generic pharmaceuticals spread fast as Wal-Mart officials touted savings not only to their pharmacy customers but also to those states’ Medicaid programs, although Dan Vogelman, a Wal-Mart spokesman, had no projected estimates as to the savings.

“It’s a constant price,” Vogelman said. The program will be permanent, he added.

The savings could immediately affect more than 470,000 uninsured Arkansans. For example, a $75-prescription for a 30-day supply of a medication would only be $4, if it were one of the 314 generic drugs included on the Wal-Mart and Sam’s Club Prescription Program list.

Asked why the prescription program did not begin in Wal-Mart’s home state, Vogelman responded, “Tampa had the population demographics, including senior citizens obviously and the uninsured. It was a really good laboratory test site.”
Senior citizens factored heavily into Wal-Mart’s new prescription program. Vogelman says many of them fall into the “doughnut hole” found in Medicaid Part D.

“They’re covered for prescription costs up to $2,250, but between $2,250 and $5,100, seniors may have to pay 100 percent for prescriptions,” Vogelman said.

FOLLOW THE LEADER
Kmart already offers a 90-day supply of selected generic prescriptions for $15 at its 1,100 pharmacies nationwide. By getting a 90-day supply, customers are saving time and money by not having to visit the store every 30 days for a refill, a Kmart spokesman said. At the time of the Florida announcement, Minneapolis-based Target Corp., the country’s No. 2 discounter behind Wal-Mart, said it would match its rival’s lower prices in Florida.

CVS Corp., based in Woonsocket, R.I., referred to a statement it issued when Wal-Mart began the Tampa trial. CVS said at that time that co-pays for most generics were already low and that the chain “has always provided its customers with very competitive pricing.”

Union-backed WakeUpWal-Mart.com said Wal-Mart was just trying to deflect attention from criticism that it provides skimpy health care plans for its more than 1.3 million employees.

MORE REACTION
“This is a public relations stunt meant to drive foot traffic. Most people will find their prescriptions do not fall under the $4 plan,” said Charlie Sewell, senior vice president of government affairs at the National Community Pharmacists Association. The NCPA says it represents about 24,000 non-chain pharmacies.

In response to Wal-Mart’s plan, Walgreens Drug Store issued a press release stating that it “will not” match Wal-Mart’s prescription plan based upon several reasons.

A press release at Walgreens’ website referred to Wal-Mart’s pricing as a “limited price promotion” in response to the “increasing number” of senior citizens choosing their stores to frequent.

Wal-Mart’s program was extended to Arkansas and the following states: Alaska, Arizona, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas and Vermont.

(Peggy Kenyon of The Leader and The Associated Press contributed to this report.)