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Wal-Mart’s $4 generics: A great deal — for Wal-Mart

February 20th, 2007 · 2 Comments

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Wal-Mart’s $4 generic drug plan has earned the mega-retailer a lot of good PR. But is the program all it claims to be?

Wal-Mart states that it provides “over 300 different generics available for $4 per prescription fill or refill (up to a 30-day supply).”

If you take a closer look at the drugs actually offered under the plan, technically Wal-Mart does offer 314 different drugs — but this includes different dosages of the same drug. If you don’t count different dosages, the plan only offers 143 drugs.

Sounds like another example of Wal-Mart’s infamous loss-leader gimmickry to us. Perhaps ElectroGeek sizes it up best:

The whole $4 generic drug plan appears to be nothing more than a fantastic marketing gimmick by marketing executives at Wal-Mart which was used in an effort to lure elderly customers back away from Walgreens. Wal-Mart appears to be deceiving the American public by not disclosing the full details of their $4 generic drug plan. Their only intention is apparently to get you in the door, up sell you to the regular prescription price and have you shop throughout the store.

Adds a commenter on ElectroGeek’s blog:

The deal is to get older seniors in the store, get the prescription, tell the customer to shop a while then come back. They delay the customer, them when the script is finally ready, many of the elderly simply pay the extra cause they are tired and do not want to be embarassed etc etc.

Some Wal-Mart competitors, such as Costco and Target, followed suit with their own $4 plans. But Costco has already discontinued its program, stating that “the cost of pharmacists at Costco, the bottle and maintaining records did not amount to $4, which is why the company ended up losing money with the plan.”

This would seem to indicate that Wal-Mart is making little, if any, money from the $4 generics — and a lot more from the people they draw into the store. The fact that Wal-Mart will not fill these prescriptions online or over the phone supports this argument.

Tags: Wal-Mart drug plan

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