http://biz.yahoo.com/rb/060921/retail_walmart_drugs.html?.v=16

Quote :

"Wal-Mart cuts generic drug prices to $4 in Florida Thursday September 21, 11:59 am ET TAMPA, Florida (Reuters) - Wal-Mart Stores Inc. (NYSE:WMT - News) said on Thursday it would slash prices on nearly 300 generic prescription drugs to $4 in the Tampa, Florida, area and expand the plan across Florida and other states next year. ADVERTISEMENT The world's largest retailer, which has been hit with accusations that it provides inadequate health care for more than a million U.S. employees, said the program would be available to customers and associates of 65 Wal-Mart pharmacies in the Tampa Bay, Florida, area starting on Friday. The plan will then be rolled out to the rest of Florida, home to many retirees on limited incomes, in January, and to as many states as possible next year. "It's a big market where there is a need," Bill Simon, executive vice president of the Professional Services Division for Wal-Mart, said of the Tampa area, home to many senior citizens and people without health insurance. Simon, speaking at a press conference held at a Wal-Mart store in Tampa, declined to say how much the program would cost, but said the company could make the changes due to its pricing and distribution strength. "We're in business to make money," Simon said. Shares of top drug chains were down sharply after Wal-Mart's announcement. Walgreen Co.'s (NYSE:WAG - News) shares were down 6 percent to $46.98 while CVS Corp. (NYSE:CVS - News) plunged 10 percent to $31.80, both on the New York Stock Exchange. Shares of Wal-Mart, a component of the Dow Jones industrial average (^DJI - News), rose 19 cents to $49.06 in early trading but were down 44 cents, or nearly 1 percent, to $48.43 by mid-morning. Wal-Mart said its program will be available to the uninsured and insurance will be accepted. Under the plan, a generic drug will cost $4 for up to a 30-day supply at commonly prescribed dosages, a small fraction of the price of most branded drugs. Wal-Mart, the world's largest retailer, is already well known for slashing prices on items ranging from food to toys, putting pressure on suppliers and competitors. If such a plan were to be rolled out nationally, it "could have major negative repercussions for existing and new generic pricing as it has in many of the categories in which Wal-Mart has entered," said David Maris, an analyst who covers generic companies at Banc of America Securities. Wal-Mart said that the plan covers 291 generic medications used for conditions such as allergies, cholesterol, high blood pressure and diabetes. The retailer also said that some antibiotics, antidepressants, antipsychotics and prescription vitamins are also part of the plan. Not all generics in each therapeutic category are included. The initiative could help jump-start Bentonville, Arkansas-based Wal-Mart's pharmacy business, revenue of which declined slightly in the most recent fiscal year. The lower priced generic drugs could help Wal-Mart beef up sales in other parts of its stores. "There's a huge benefit in that people buy other things in the store when they go in to pick up their prescriptions," said Sarah Henry, a retail analyst for Sovereign Asset Management, which manages $2 billion. "Wal-Mart has picked up on that and it's not only a nice-looking thing for Wal-Mart to do, but could potentially help shopping in other parts of the store." Henry noted that Walgreen and CVS can show same-store sales growth of 6 percent even when general merchandisers have sales growth of just 3 percent, indicating the pharmacy brings in repeat business. Wal-Mart's move comes as several major drugs are facing, or are about to face, competition from cheaper generics, such as Merck & Co. Inc.'s (NYSE:MRK - News) cholesterol fighter Zocor, which lost patent protection in June. Although generic medicines are cheaper, they are more profitable for pharmacies since the prices of branded drugs are tightly controlled by the major pharmaceutical companies that manufacture and sell them. "

Altruism can be profitable, and this is a big step in the right direction. Wal-Mart may be the only company with enough clout to put price pressure on Big Pharm. Hopefully this will help stabilize the rising prices of the most widely used prescription drugs.

9/21/2006 12:49:58 PM

Nope, wal-mart haters will complain about it putting local pharmacies out of business, screw the sick poor people.

9/21/2006 12:52:04 PM

do "local" pharmacies still exist?

9/21/2006 12:54:16 PM

this is good in itself. i still don't like their heavy-handed (and oftentimes questionably legal) anti-union practices.

[Edited on September 21, 2006 at 12:55 PM. Reason : dur]

9/21/2006 12:55:36 PM

i'm in that area

9/21/2006 1:05:06 PM

That's going to help cubans who abuse the prescription drug program byyyyy?

9/21/2006 1:48:45 PM

So will Florida become the new Canada for purchasing and redistribution?

I like the fact the article mentioned this not going nation-wide. Wonder how much people they had to talk to first to get this approved?

9/21/2006 3:44:48 PM

it's only florida for the initial period

"The plan will then be rolled out to the rest of Florida, home to many retirees on limited incomes, in January, and to as many states as possible next year."

9/21/2006 3:48:36 PM

Man the town I live in has like 10 small pharmacies that compete with Wal-mart, Target, Wal Greens, etc. I have no idea how they stay in business (nor do I care if they stay in business), but if wal-mart can sell $4 generics, then the little guys better figure out how to match that or they'll be gone.

9/21/2006 4:23:22 PM

you know, it takes a lot of money to develop new drugs.

9/21/2006 4:56:15 PM

If they really wanted to cut healthcare costs in america, they could provide their employees with a real benefits plan so they didn't go to the emergency room everytime they have a cold.

9/21/2006 5:02:55 PM

so insted of admiting that they are trying to do something good you just attack them on some different point?

9/21/2006 5:04:03 PM

God damnit. This sucks for local pharmicies.


I really do hate walmart.

9/21/2006 5:44:34 PM

after they put every small pharmacy out of business, they will be free to jack up the price as they see fit.

9/21/2006 7:50:56 PM

^ in general that is what people try to do, but people have been saying this about wal-mart for over a decade now and they have not shown that to be the case.

Basically walmart is just a complete dick to manufacturers and other businesses with their penny pinching techniques, but they have not shown to be a threat to the consumer and thats how they dodge so many antitrust suits...

9/21/2006 8:05:21 PM

Quote :

"you know, it takes a lot of money to develop new drugs."

Of course, since the vast majority of innovative drugs come from the NIH, it's federal funding that pays for those drugs.

The pharmaceutical companies then just buy the rights from the NIH (at ridiculously low prices--which is definitely a fault of the NIH) then turn around and sell them at huge markups.

9/21/2006 8:08:10 PM

what the hell would you know about it? it's not like you are a biomedical engineer or anything

9/21/2006 8:24:53 PM

Quote :

"^ in general that is what people try to do, but people have been saying this about wal-mart for over a decade now and they have not shown that to be the case."

Wal-Mart can't do it because they know someone like Target or K-Mart will come in behind them and steal their business.

Quote :

"Of course, since the vast majority of innovative drugs come from the NIH, it's federal funding that pays for those drugs. The pharmaceutical companies then just buy the rights from the NIH (at ridiculously low prices--which is definitely a fault of the NIH) then turn around and sell them at huge markups."

You have no fucking clue what you are talking about. NIH does NOT develop drugs. THey do research on effects of chemicals, drugs, etc. My wife is a Veterinary Pathology resident. She's done work for NIH and a couple of pharmaceutical companies (been published a few times now). Companies like Glaxo, Aventis, Pfizer, Novartis, etc. do the developing and innovation in drugs. Government agencies like NIH do the research on effects of some of those drugs, components, and other compounds. For example, my wife's publication from NIH work was how 2-Butoxyethanol (chemical used in various solvents) applied to rats cause conditions that mirror the effects of Sickle Cell Anemia and may be used for an animal model in drug development. Her mentor did the research that first brought to light the possible problems with ephedra/ephedrine in suppliments. They do not develop drugs though. Pharmaceutical companies do contract out to NIH/NIEHS and other contract labs research work like the effects of chemicals and drugs (and it sure as hell isn't cheap) simply because there is too much for it all to be done in-house.

9/21/2006 10:50:58 PM

Quote :

"do "local" pharmacies still exist?"

um yes

9/21/2006 11:04:36 PM

Quote :

"after they put every small pharmacy out of business, they will be free to jack up the price as they see fit. "

care to show an example of this EVER happening in the US market economy? feel free to use any market, any company, I'm betting you can't.

9/22/2006 6:42:48 AM

Quote :

"You have no fucking clue what you are talking about. NIH does NOT develop drugs. THey do research on effects of chemicals, drugs, etc. My wife is a Veterinary Pathology resident. She's done work for NIH and a couple of pharmaceutical companies (been published a few times now). Companies like Glaxo, Aventis, Pfizer, Novartis, etc. do the developing and innovation in drugs. Government agencies like NIH do the research on effects of some of those drugs, components, and other compounds."

No, the research isn't always done at the NIH, but NIH funding has paid for basically ALL innovative drug development over the past 15-20 years.

If you look at the compounds that have been developed in-house by pharmaceutical companies during that time frame that have hit the market, they're essentially all copycat drugs in the same class as existing meds.

And of course, the new ones are virtually never tested head-to-head against the cheaper existing versions, because that would most likely show that they are no more effective.

9/22/2006 6:51:16 AM

what i kind of wonder is why did they pick such an random number $4. I am sure its not random any ideas on that.


The actual use of this program will be noticed once they start releasing which drugs they cover. it will all depend on how many people use these drugs, or if there gonna just make this a pr/token move. they could always just pick a drug that only helps 10 people but get a pr blitz from it.

either way this is just one more piece of evidence that i need to love walmart even more. Now that i actually have a study in my hands that shows they reduce inflation by themselves...

9/22/2006 7:07:16 AM

Heard on the radio this morning that Target plans to follow Wal-Mart's example.

9/22/2006 7:29:34 AM

so they slash their prices... great.

but i can guarantee they arent the ones who have to bite the bullet...

who are they scammin' to make up the difference? the suppliers? the customers?[i]

and yep, definately sucks for the local guys. whatever happened to quality of service over economies of scale?

9/22/2006 7:54:41 AM

"quality of service" ?????????


they put pills in a fucking bottle


there are machines that can do that more efficiently than ol' Rufus down at the Rx, and it's not like the dude behind the counter didn't go get the same education Rufus did, either


nor is price cutting a bad thing in the long run. it prevents consumers from going to canada to get the same product they were going to buy, because they're getting it at a FAIR RATE at home and not getting price gouged for it. For a business student, you of all people should understand that. Walmart puts pressure on the distributor to get a lower price, cutting into profit margins but expanding the consumer base overall to compensate. Fellow retailers follow suit because they'll get left out in the cold by the consumer if they don't. They only group that gets "hurt" is the pharm. manufacturers/distros because they have to cut their massively exorbitant profits to stay solvent


so what in the goddamned fucking gay christ jesus are you even spouting off about?

[Edited on September 22, 2006 at 8:07 AM. Reason : you probably dont even understand half of whats going on]

9/22/2006 8:01:54 AM

i think its funny, all the rage directed at the very people whom you depend on to keep you alive and kicking

biting the hand never looked so stupid

9/22/2006 8:18:38 AM

good lord. they have 65 wal marts just in the tampa area?

why arent they ROLLING BACK prices somewhere besides the rich person retirement capital? surely there is a demand for prescriptions there, but i dont think the demand for CHEAP prescriptions is that high (obviously even people above the poverty line have demand for cheap stuff, but you know what i mean)

but this going to eventually (soon) cover most of the US, right?

even if they are used for good, walmart's "powers" really fuck with me. the power to put the squeeze on the huge huge huge bottomless money pharma industry. walmart is a beast. i always shop at the mom and pop places!!!1

9/22/2006 8:19:25 AM

Travis, it's one of america's richest markets.... BUT



who's there?



Old Jews.



Where would you kick off a program that you wanted to be successful? Where it would be an out of the park home run, right? Old people need medicine, and Jews are thrifty. It's win-win for Walmart, because they can both justify and stress-test the program all in one roll-out.


[Edited on September 22, 2006 at 8:35 AM. Reason : ahaha that's about as offensive as I can be today I think]

9/22/2006 8:35:06 AM

Quote :

"they could always just pick a drug that only helps 10 people but get a pr blitz from it."

Did you only read the bold parts?

"Wal-Mart said that the plan covers 291 generic medications used for conditions such as allergies, cholesterol, high blood pressure and diabetes. The retailer also said that some antibiotics, antidepressants, antipsychotics and prescription vitamins are also part of the plan. Not all generics in each therapeutic category are included."

9/22/2006 8:41:28 AM

Quote :

"No, the research isn't always done at the NIH, but NIH funding has paid for basically ALL innovative drug development over the past 15-20 years."

No, NIH has not funded innovative drug development. If anything the research pertaining to drug development at NIH is funded by the pharmeceutical companies and not NIH. The drug companies fund researchers at NIH, contract labs, and universities to do their dirty work as I said earlier. For example, my wife's residency and PhD is being paid for by Aventis. Work she did at NIH was funded by Glaxxo. NIH does not develop drugs and they certainly aren't footing the bill for pharmeceutical companies.

Quote :

"If you look at the compounds that have been developed in-house by pharmaceutical companies during that time frame that have hit the market, they're essentially all copycat drugs in the same class as existing meds. And of course, the new ones are virtually never tested head-to-head against the cheaper existing versions, because that would most likely show that they are no more effective."

Yes, a number of drugs are copycats. Most notably the big sellers, like acid reflux and heartburn medications, are simple alterations to the inactive compounds and they are able to get a new patent because they can find some way of saying the digestion rate has dffered. But that is more an indictment against the insurance and patent systems than it is the drug companies. You don't have to get the "latest and greatest" drug, especially when there is little difference.

9/22/2006 10:54:48 AM

I'll be happy to pull up some data when I get home (I'm stuck in the med center today).

Here's a quick example, though, on Taxol:

Quote :

"The recent attempt by NCI to determine a fair price for Taxol illustrates the primitive nature of NIH efforts in this regard. Taxol was discovered, manufactured and tested in humans by the National Cancer Institute. NCI gave Bristol-Myers Squibb (BMS) a Cooperative Research and Development Agreement (CRADA) that assigned to the firm the exclusive rights to commercialize all NCI past and future Taxol research. BMS, the NCI's favorite partner in drug development, paid nothing for the CRADA and will pay the government no royalties on its Taxol sales."

The NCI (a division of the NIH) developed this drug.

http://www.cptech.org/pharm/pryor.html

Another example, AZT:

http://lists.essential.org/pipermail/pharm-policy/2000-June/000215.html

AZT was discovered by researchers using NCI funding, then applied to HIV/AIDS by NIH researchers.

[Edited on September 22, 2006 at 11:16 AM. Reason : ]

9/22/2006 10:56:43 AM

^^^... No i read the whole article. What i meant was in general terms. Instead of pickinng heart medication for things such as blood pressure, for example, lets say they pick one that is for (i am no med student) people who have heart arrythmia, with a certain type of blood, and a certain ancestory. What i was basically saying was they made broad general statements and the majority of the drugs may not be for the big ticket diseases. NOT SAYING THIS WILL HAPPEN more speculation and wanting to know what others thought

9/22/2006 11:38:07 AM

Man, I can't wait until this comes up here, and I'm able to get me some $4 allegra.

And maybe some $4 adderall.

9/22/2006 12:04:42 PM

Quote :

" The plan, which starts in the Tampa, Florida area on Friday, "caused an overreaction" in Walgreen and CVS shares, analyst Patricia Baker wrote in a research note. Shares of CVS, which has the most drugstores in the United States, plunged nearly 8.4 percent on Thursday and shares of Walgreen, the largest drugstore chain in terms of revenue, fell 7.3 percent. "We believe the impact to their operations will be much less significant than feared," Baker wrote. She said that customers who pay with cash, rather than through insurance, seem to be the most likely users of such a plan, and represent a small fraction of the chains' customers. Late on Thursday, CVS said that the drugs Wal-Mart plans to sell for $4 are already low-cost and that cash sales represent less than 0.5 percent of its total pharmacy sales. [...] Baker also said Wal-Mart's plan could be largely a reaction to the Medicare Part D drug plans now in effect. "Those seniors that, as a result of gaining drug coverage under the plan, welcome some freedom of choice with respect to determination of where to fill their scripts, have or might transfer files to community pharmacy from mass merchants," she wrote. "(Wal-Mart) is over-indexed on uncovered Americans and has the most to lose in respect to a shrinking cash pay segment.""

http://tinyurl.com/lh3b3

[Edited on September 22, 2006 at 12:54 PM. Reason : ]

9/22/2006 12:54:04 PM

Quote :

"No, NIH has not funded innovative drug development. If anything the research pertaining to drug development at NIH is funded by the pharmeceutical companies and not NIH. The drug companies fund researchers at NIH, contract labs, and universities to do their dirty work as I said earlier. For example, my wife's residency and PhD is being paid for by Aventis. Work she did at NIH was funded by Glaxxo. NIH does not develop drugs and they certainly aren't footing the bill for pharmeceutical companies."

To continue beating what I think is a dead horse:

http://www.citizen.org/documents/ACFDC.PDF

is a fascinating report. A couple of notable bits:

Of the top 50 selling drugs from 1992-97, the development of 45 of them was federally funded.

In a study of the five top selling drugs in '95, the NIH had provided 55% of the funding leading to their discovery (foreign academic institutions also accounted for 30%).

Any of this should be obvious if you even think about it from a business perspective. The established pharmaceutical companies have zero interest in dropping money into the risk-filled process of developing a new drug. Instead, once (publically-funded) studies have shown a likely benefit, the drug companies jump in to snap up the patent.

and this:

Quote :

"You have no fucking clue what you are talking about. NIH does NOT develop drugs."

is patently wrong. All you have to do is peruse the NIH website and you'd discover that the NIH has a TON of research involved in drug development.

[Edited on September 22, 2006 at 4:26 PM. Reason : ]

9/22/2006 4:21:26 PM

Quote :

"Big Pharm"

that sounds like a rapper

9/22/2006 4:56:34 PM

Sent this in PM initially but will post it too...

I think perhaps both of us were a bit over-zealous in attribution of credit in regards to research to either side. I forgot about the work NCI specifically does even though I have friends who work there. NIH does involve themselves specifically in the "big threat" issues, like cancer, AIDS, and flu-du-jour but even then their involvement is not 100% funding nor 100% of the research by any means. NIH does much more in way of funding than it does in-house work for the vast majority of pharm work and this is simply so they can have influence as to what drugs are pushed (not to mention that a good chunk of the money they dole out in funding is not just tax payer dollars but their portion of royalties). When I think pharmaceuticals I tend to lean to the commerical variety (allergy, acid reflux, athritis, etc.), in which case the NIH does pretty much step aside, which is why I was so far to the other end of the spectrum from what you were saying. Regardless, the NIH does have to pass drugs off to companies at some point because they are not in the busness of production, marketing, distribution, etc.

I thought this was a pretty good report from the NIH about handling of research funding, patents, royalties, and such:
http://www.nih.gov/news/070101wyden.htm

Quote :

"is patently wrong. All you have to do is peruse the NIH website and you'd discover that the NIH has a TON of research involved in drug development."

There is a big difference between "developing drugs" and having a hand in research or funding.

Here is what NIH had to say:

Quote :

"It is important to note that while NIH's federally funded research has contributed in a substantial, dramatic, yet general, way to advances in medicine and biology, the direct contributions to a final therapeutic product as a consequence of the Bayh-Dole process is limited and difficult to determine. This is due to many factors. First, the technologies developed in basic research laboratories are nascent, requiring extensive further development. Second, not all technologies arising from NIH funded research lead to therapeutic drugs; indeed, new chemical entities that could lead to therapeutic products are hard to discover, as pharmaceutical and biotechnology companies can attest. Third, the likelihood that a compound will reach the market is very low. Consider the following statistics: for one drug to be approved by the FDA, a company typically needs to screen between 5,000 and 10,000 compounds. Of these, an average of 250 compounds survive pre-clinical testing, only five compounds are approved for clinical testing, and only one succeeds in obtaining FDA approval10. Fourth, development and production of a FDA-approved therapeutic drug occurs, on average, eight to twelve years after a license is signed, and a license offers no guarantee that a product will ever reach the market. Given this lag time, most investigators and universities are unaware when licensing milestones are reached unless they have a very active license-monitoring program or until they receive royalty payments pursuant to the license agreements. "

In other words, "Yeah, we get our dicks wet, but we aren't the baby's daddy."


[Edited on September 22, 2006 at 5:11 PM. Reason : .]

9/22/2006 5:03:04 PM

awwww, now kiss and make up

9/22/2006 5:04:43 PM

The key part of that is:

Quote :

""It is important to note that while NIH's federally funded research has contributed in a substantial, dramatic, yet general, way to advances in medicine and biology, the direct contributions to a final therapeutic product as a consequence of the Bayh-Dole process is limited and difficult to determine."

Bayh-Dole is the new act. The repercussions of this won't be seen for many years.

Quote :

"When I think pharmaceuticals I tend to lean to the commerical variety (allergy, acid reflux, athritis, etc.), in which case the NIH does pretty much step aside, which is why I was so far to the other end of the spectrum from what you were saying."

Very true. The NIH's most prominent work has been in chemotherapeutics for cancer and HIV--these have made some wonderful advances. On the flip side, pharmaceutical companies are reaping the profits of these drugs.

[Edited on September 22, 2006 at 5:21 PM. Reason : ]

9/22/2006 5:15:45 PM

did a TWW argument just come to a peaceful resolution???

9/22/2006 9:29:48 PM

yo how much does generic propecia cost at walmart if you just wanted to pay for it straight up with no insurance?

9/22/2006 9:48:58 PM

AndyMac - you'd still have to drive 30 minutes out of town to get it, even if it did make it 'up here'.

9/23/2006 12:04:34 PM

Once Wal-Mart has screwed all the local guys, they will jack the prices like you wouldn't beleive. So, I think Wal-Mart will garner the good PR, then quietly raise the prices.

The Government DOES give grants and funds research in some classes of drugs, mainly those for which there is not a large market. These are called Orphan Drugs, and are subsidized by the gov because there's not a lot of profit in them. Examples of this can be some Chemo drugs, Anti-Parasitics, and some AIDS drugs.

Pharma companies are developing drugs for profit. Each new drug that comes to the market costs a Pharmaceutical Company about $900 million. One in three drugs released to the market recovers all it's development costs. Many of the markets that the pharma companies sell to have goverment mandated price controls (example: Canada), so they can only really make their money back in the US and select other market.

9/23/2006 8:23:53 PM

Quote :

"Once Wal-Mart has screwed all the local guys, they will jack the prices like you wouldn't beleive. So, I think Wal-Mart will garner the good PR, then quietly raise the prices."

again, care to show an example of this EVER happening in the US market economy? feel free to use any market, any company, I'm betting you can't.

9/23/2006 9:49:42 PM

It turns out K-Mart has had a $5/month generic plan since May, but nobody knew because it's fucking K-Mart.

http://tinyurl.com/kt42w

[Edited on September 24, 2006 at 2:13 AM. Reason : ]

9/24/2006 2:13:01 AM

Quote :

"again, care to show an example of this EVER happening in the US market economy? feel free to use any market, any company, I'm betting you can't. "

Gas stations used to do it all the time. The feds actually busted up the Esso corporation because they would move into a town, and drop the prices because they had huge buying power and could stand the loss in few towns. Once all the locals went out of business, Esso would raise prices and rip off the community. So, there's an example. Enjoy.

9/24/2006 8:18:24 PM

Quote :

"Travis, it's one of america's richest markets.... BUT who's there? Old Jews. "

yeah i forgot about the time i spent in miami. i ate matzo till i popped!!1

9/24/2006 8:55:36 PM

http://www.usatoday.com/money/industries/retail/2006-10-19-walmart-drugs_x.htm?csp=34

10/19/2006 9:11:44 AM

oh no

they act all corporationy

10/19/2006 9:42:33 AM

How long until Google buys Wal-Mart?

10/19/2006 9:43:57 AM