Wal-Mart expands drug discounts

Amy Scott Oct 6, 2006
HTML EMBED:
COPY

Wal-Mart expands drug discounts

Amy Scott Oct 6, 2006
HTML EMBED:
COPY

TEXT OF STORY

MARK AUSTIN THOMAS: Beginning today Wal-Mart will offer big discounts on generic drugs at its stores in Florida. That move comes four months ahead of schedule. The retailer also said it will bring those cheap drugs to other states by the end of the year. Amy Scott explores what Wal-Mart’s decision will mean for consumers and competitors.


AMY SCOTT: Florida customers will save an average 20 percent on certain generic prescriptions.

Retail analyst Richard Hastings says rather than lose money Wal-Mart will make it up in other departments.

RICHARD HASTINGS: It puts a little bit more money back into the pockets of their existing shoppers so they can buy stuff in the stores.

The move may pressure competitors to lower their prices. Target has already said it will match the discounts, but Hastings doesn’t expect pharmacy chains like Walgreens or CVS to take much of a hit.

HASTINGS: They have a much stronger loyalty based on the shopper profile that prefers a small store, easy to walk into and out of, and they have a lot of drive-through pharmacies.

Hastings says the trend could hurt independent pharmacists that don’t have the same buying power.

Wal-Mart had planned to start the Florida program early next year, but after selling 36,000 new prescriptions during a test in Tampa the company decided not to wait.

In New York, I’m Amy Scott for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Need some Econ 101?

Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.