The program which starts today at 65 of the company stores in Tampa, Florida, is expected to include all of Florida by January 2007. Company officials say the entire U.S. should see the same pricing by the end of 2007.
Health care industry analysts say the program has the potential to transform the $230 billion prescription drug business the same way Wal-Mart has transformed and dominated other industries, such as groceries and toys.
While proponents of the mega chain say this has resulted in lower consumer prices, critics says there have also been negative effects. They cite a large number of competitors being forced out of business and many firms being driven to cease operations in the United States, often bringing their businesses to countries with low wage costs, in order to compete price wise for Wal-Mart contracts.
While all prescription drugs sold in the United States must have Food and Drug Administration approval, critics say some developing countries do not have the ability to produce a consistent quality product. They also say the possibility of terrorists contaminating a shipment of medicine to the U.S. exists.
Wal-Mart did not disclose where the generic medicine it is selling is being made, but all Wal-Mart pharmacies come under FDA regulations.
"This $4 program represents real savings for working families," announced William S. Simon, Wal-Mart executive vice president for professional services. "Wal-Mart is taking this step so that our customers and associates (employees) can get the medicines they need at prices they can afford. Our customers tel us all the time that prescription drug costs are forcing them to make tough decisions."
Generic drugs last year accounted for 56 per cent of all prescriptions filled. They have the same active ingredients as their brand name counterparts but are considerably less expensive.
Wal-Mart says the $4 price is not a loss leader. They say they will still make money on the sales, but the company will not say whether it negotiated a deal with drugmakers, wholesale suppliers or both to make the deal profitable.
