It must not be much fun to compete with Wal-Mart (NYSE: WMT) in the prescription drugs business. The world's largest retailer keeps dropping prices.
Today, Wal-Mart said it would extend its $4 generic drug program to include a number of additional treatments for "problems including glaucoma, attention deficit disorder, fungal infections and acne," according to MarketWatch. For other items like birth control pills, it will charge $9 against a national average of $30.
Wal-Mart says that the program will save consumers $600 million over the next year, with some of the savings being tremendous. While antifungal Lamisil cost an average of $337.26 one month ago, its generic equivalent, terbinafine, sells at Wal-Mart for $4 for a commonly dispensed quantity of up to a 30-day supply, the company said.
The low-cost drugs raise the question of whether Wal-Mart makes money on them at all. It may use the price points to drive traffic to its stores. If so, companies like CVS Caremark (NYSE: CVS) would watch their stock prices take a beating.
The generic prices also raise the issue of unfair competition. If Wal-Mart does offer the drugs at below cost, is it building an antitrust case for other companies?
The new pricing may be good for consumers, but that doesn't mean the government won't look into it.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
9-27-2007 @ 12:21PM
augie said...
Is this more imports from China.
9-27-2007 @ 12:53PM
roudy11z said...
The truly needy that can afford these $4 meds won"t care where it comes from as long as its fairly safe.I know #1 is probably "making lite" of the China thing of which I totally agree. It doe not matter what WMT's motive is with this since it will help so many people including myself.
10-05-2007 @ 1:53PM
taloncb said...
Ok be serious. It is illegal to import pharmacuticals from China. So that end's that particular asinine comment. In fact, the purpose is to bring consumers into the store for other items while there for the prescription. And it will work.
11-16-2007 @ 12:28AM
DERRINELS said...
well wel well wal-mart another bit your dust huh .when will wal-mart will learn it doesn't pay to sell crack which is what they are selling becouse they know this crap comes from china yet they lie and that will be their down fall.