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Published: Winter, 2006; Vol 8, Num 4

 


 

Wal-Mart’s public image took a battering in 2006, but the announcement of its new $4 prescription drug program this fall apparently restored some of the luster. How good is the program, though, and what does it mean for Laborers and their families?

The $4 Bait

“The program will be of limited benefit to most people,” says the LHSFNA’s Health Promotion Division Director Mary Jane MacArthur. “The first question is whether your drugs are even on the list. For instance, among the many generic drugs prescribed for high cholesterol, Wal-Mart offers only one for $4.”

In the United States, the Food and Drug Administration (FDA) has approved 11,487 brand-name and 8,730 generic drugs for sale. Of these, Wal-Mart selected 143 different generic drugs (1.6 percent of generics and 0.7 percent of all drugs) for its program, although, due to differences in dosage, 331 total offerings appear on the list (http://i.walmart.com/i/if/hmp/fusion/Floridagenericdruglist.pdf). Many on the list, however, are older generics that are no longer commonly prescribed. For example, the lone cholesterol medication, lovastatin, is the oldest statin on the market, first introduced in 1987.

“The next question is your dosage,” MacArthur continues. Doctors specify the amount of a drug that patients must take. Drugs on the Wal-Mart list are offered in specific dosages, and many are available only in a single dosage. For instance, “the cholesterol drug offered at $4 is available in just one dosage,” says MacArthur. “Even if your doctor happens to prescribe that drug, it won’t help you unless you are prescribed a 10 milligram dosage.”

Further, for all drugs and dosages on its list, Wal-Mart is selling 30-day supplies – and only 30-day supplies – for $4. However, some drugs on the list – antibiotics, for instance – are frequently prescribed in less than 30-day amounts, so their inclusion may be misleading at best. 

Good Corporate Citizenship?

The program began with much fanfare on a trial basis in Florida in September. It attracted wide attention because soaring prescription drug prices in recent years have been a hot topic among health care economists and consumers alike. With its huge population of senior citizens, Florida was the ideal test market. According to Wal-Mart, it filled 88,235 new prescriptions in the first ten days of the test. Based on that response, the company accelerated its plan to expand the program to other states, planning to reach all by January 31. Meanwhile, feeling the pressure, Target announced that it would match Wal-Mart’s program in all states where the two companies compete. Other pharmacy retailers have been more cautious.

Before details of the program became clear, many commentators thought it might prove a real service to health care consumers. It now appears that it is nothing more than an advertising ploy to draw more customers into the stores. Once there, customers may decide it is easier to buy from Wal-Mart than go to another pharmacy, even if their drugs are not among the low-cost options on the list. Or, they may be enticed to buy other products in the store. Because prescription drugs are such a significant portion of retirees’ budgets, the ad campaign seems particularly unfair and manipulative of senior citizens. 

After the expanded program was announced, WakeUpWalMart spokesperson Chris Kofinis renewed a broad criticism of the company’s employment practices which include a heavy reliance on part-time workers who do not qualify for health insurance. He said, “Wal-Mart must address its own health care crisis, because the fact is all the low-priced drugs in the world won’t help the 775,000 Wal-Mart workers and families that are left cruelly uninsured.”

Other observers raised the possibility that Wal-Mart’s program could, in time, force small-town pharmacies to close, due to the effects of sustained price competition. That pattern was common in the early decades of Wal-Mart’s development when its large discount operations forced local hardware, dry goods and grocery stores to close, leaving Wal-Mart with a near monopoly in both retail sales and employment in many small communities.

While Wal-Mart planned its announcement to make a big splash, offering generic drugs at a reduced price actually is not new. Kmart has had a program in place since early 2006, and its list of generics is comparable to Wal-Mart’s. The Kmart program originally offered a $15 co-pay for a 90-day supply of medication – requiring one trip to the pharmacy every three months instead of every month as with Wal-Mart’s program. In the wake of Wal-Mart’s announcement, Kmart began offering customers the option of getting drugs on its generic list in 30-day supplies with a $5 co-pay or continuing at $15 for a 90-day supply.