Wal-Mart to sell 300 drugs for $4

WASHINGTON — Retailing giant Wal-Mart, known for forcing prices down to dominate nearly every market it enters, said Thursday that it would sell nearly 300 generic drugs for $4 per prescription, whether or not a customer has insurance.

By using its might as the nation's largest retailer and its ability to force suppliers to cut prices to the bone, the company will begin the $4 price program in its 65 stores in the Tampa, Fla., area today, in all of Florida in January, and in as many other states as possible by the end of 2007. The $4 is for a typical monthly supply of medicine, and included on the Wal-Mart list are generic versions of many popular prescription drugs, including the antibiotic amoxicillin and the heart and blood-pressure treatment lisinopril, sold under the brand names Prinivil and Zestril.

Health-care industry analysts said the program has the potential to transform the $230 billion prescription-drug business the way Wal-Mart has transformed other industries, including groceries and toys, where its aggressive pricing has forced some competitors out of business and allowed it to dominate entire categories of merchandise.

Minneapolis-based Target Corp., the country's No. 2 discounter behind Wal-Mart, said it would match its rival's lower prices in the Tampa Bay area immediately. Health-care costs rose an average of 9.6 percent a year from 2000 to 2004, and a large component of the increase was the price of drugs, which rose an average of 11.4 percent a year in that time. Inflation during that period was around 2.6 percent a year. Though the increase in drug prices has been slowing in recent years, largely because of the wider use of generics, it has still outpaced inflation.

Wal-Mart executives, criticized by labor unions and consumer groups that say the company shortchanges its employees on pay and health care, said they started the program to help families and retirees, especially those on Medicare. They said at news conferences and in telephone calls Thursday that they see these groups struggling daily at the company's pharmacies to pay for medicine.

"This $4 program represents real savings for working families," said William Simon, executive vice president for professional services at Wal-Mart. "Wal-Mart's taking this step so that our customers and associates can get the medicines they need at prices they can afford. "

Mark McClellan, administrator of the federal Centers for Medicare and Medicaid Services, said he did not think the Wal-Mart offer would siphon beneficiaries from the Medicare drug benefit, known as Part D.

What the Wal-Mart plan does provide, he said, is a way for Medicare recipients to save more money after they reach the "doughnut hole." That's the point at which an individual's yearly drug costs reaches $2,250, and Medicare ends its subsidy. After that, a beneficiary has to pay $3,600 out of pocket before government subsidies kick in again.

Material from The Associated Press is included in this report.