Friday, September 22, 2006

Reaction to Walmart's move

Target has decided to match Walmart's price in Tampa - St. Petersburg, Florida, where the $4 generic drug price pilot begins today. CVS and Walgreen's, drugstore chains which have the most to lose from Walmart's move, seek to minimize the move claiming that the price cut extends only to a subset of older generics. Here's the drug list.

Marketwatch reports that analysts do not see the move hurting PBMs or generic drug manufacturers. The Washington Post provides an interesting overview of the move, observing that

Tovar, the Wal-Mart spokesman, said that the $4 price is available to anyone, but that Wal-Mart will try to collect insurance on prescriptions for people with prescription-drug coverage. However, some insurance contracts stipulate that pharmacies will not be paid the full cost of a drug unless customers pay the full co-payment the insurer requires.

Tovar said Wal-Mart will still allow insured customers to pay $4 per prescription, even if that is less than the co-payment required and even if that means Wal-Mart will not be paid any money by insurance companies.

Mohit Ghose, a spokesman for America's Health Insurance Plans, which represents providers of insurance of all types, including for prescription-drug coverage, said the typical co-payment for a generic prescription is $5 to $15. He said it is unclear how the Wal-Mart plan will affect insurance coverage.

The Post also had an illuminating report on the government's regulatory reaction to the e. coli outbreak in packaged spinach.

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