Wal-Mart’s Generic Drug Program: The Communications & Policy Implications
Earlier this week, Wal-Mart announced that it would sharply reduce the price of generic medications it offers to as little as $4 for a 30 day supply. Wal-Mart’s move has already had a profound influence on the stocks of pharmacy retailers and generic drug companies. However, despite Wal-Mart’s size, some are saying that the program will have a limited impact on the overall marketplace.
There are also policy and communications implications of this move. Most importantly:
It Will Bolster Wal-Mart’s Image: The move may gain Wal-Mart some supporters in the influential elderly population who will benefit from having access to inexpensive medications — especially those on fixed incomes. BusinessWeek reports that the generics program is part of a “carefully orchestrated” campaign to improve its image and brand. Action always counts much more than a soundbite and this program will earn the company some much-needed goodpress.
Will This Impact The Healthcare System? Right now the Wal-Mart program is focused on generic drugs. What would happen if Wal-Mart decided to reduce prices for routine healthcare? PBMs are not very happy about the deal because it may reduce their market share and negotiating power. Overall, Wal-Mart’s move illustrates the power of a global business to change the rules of the game in healthcare.
For more coverage of this issue, please see:
-The Health Business Blog: Can Wal-Mart Save The American Healthcare System?
- 24/7 Wall Street: Implications Of Wal-Mart As A Drug Dealer
September 24th, 2006 at 8:21 pm
Fard,
Good point about communications issues, but I think Business Week overdoes the PR angle. I posted two analyses on my blog:
http://drugchannels.blogspot.com/2006/09/wa-marts-generic-pricing-will-trigger.html
http://drugchannels.blogspot.com/2006/09/reconsidering-wal-mart-but-just-little.html
Adam
September 25th, 2006 at 12:11 pm
Adam:
Thanks for your posts, they are very interesting and informative. I think that Wal-Mart made this move for business reasons. However, I also think that it does not look bad from a communications perspective. If you’re seen as helping lower the price of prescription drugs that makes you look good. And, most Americans won’t be digging as deeply into the details of the program as we will.
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May 6th, 2008 at 10:27 am
Three cheers for Wal-Mart. And now they’ve started selling 3 months of those generics for $10. Wow! For my other meds that aren’t generic I use the prescription discount card that I found at http://www.rxdrugcard.com. Low membership fee. Drug prices posted to check before you join.