Not all $4 generic meds cost just $4by Curtis Gilbert, Minnesota Public Radio
Target and Wal-Mart, the nation's biggest discount retailers, have been trumpeting the nationwide rollout of their new prescription drug programs. Their pharmacies now charge only $4 for month-long supplies of an array of generic drugs. But in Minnesota, some of those drugs will cost more than $4. The companies blame a 70-year-old state law.
St. Paul, Minn. — If you want to get a month's worth of 40 milligram capsules of the generic version of Prozac at a Minnesota Target, it'll cost you not $4, but $20. On Target's list of 300 $4 generics that dosage of the anti-depressant is one of 30 has an asterisk next to it.
Other asterisks can set you back $5 or $11 or $15.
Minnesota Public Radio obtained the prices by checking with a number of Target pharmacies. Target representatives didn't return calls seeking comment for this story.
Wal-Mart charges more than $4 for 55 generic drugs in its program, but the huge retailer took a different approach than Target. Rather than have a bunch of different prices, Wal-Mart settled on two--$4 and $9.
"There are a couple of reasons," Wal-Mart spokesman Kevin Gardener said. "One is for consumer friendliness--to create less customer confusion around pricing, we chose to have just two distinct pricing tiers. The other is that at the $9 threshold, that cleared us of running into any issues with state statutes regarding pricing."
Wal-Mart and Target have to charge the higher prices in Minnesota because of a state law that dates back to 1937 and bears the boldface heading, "selling below cost forbidden." Several other states, including Wisconsin, have similar laws on the books. They're designed to prevent businesses from driving their competitors out of the market by setting prices so low they intentionally lose money on their sales. And in those states, Target and Wal-Mart are charging more for certain doses of some drugs.
Peter Wyckoff of the Minnesota Senior Federation says the higher prices won't hurt prescription drug consumers that much. He considers $4 prescriptions at Target and Wal-Mart to be only a small step toward lowering the cost of health care. Wyckoff said the bigger problem is brand-name drugs that don't have generic equivalents.
"Generics really on the whole are not the problem. It's great marketing; it's helpful to people. But people on the whole will not face catastrophic prescription drug costs because of generic drugs."
Target and Wal-Mart have a similar set of drugs in their $4 programs, but the drugs that will cost more in Minnesota aren't always the same. For instance, the pills that cost $20 at Target cost only $4 at Wal-Mart. And a lot of the drugs Wal-Mart is bumping up to $9, Target is keeping at $4.
Tim Gallagher, president-elect of the Minnesota Pharmacists Association says there's a lot of variation in the price pharmacies pay for generic drugs--and a lot of volatility.
"It all depends on what the drug is, what manufacturer you buy it from, what brand it is, who your drug wholesaler is, what your arrangement is with your cost of goods from your drug wholesaler," Gallagher said. "I mean there's drugs in recent history that went up 5,000 percent overnight."
Is it really fair to call it a $4 drug program, when some of the medications cost more than twice that?
Wal-Mart spokesman Kevin Gardner that question misses the point.
"The good news is that the majority of the drugs on the list, about 276 or so, are priced at $4," Gardner said. "And even at the $9 level, customers will still be saving significantly over what those generic drugs were priced at before."
Both Wal-Mart and Target have complete lists of the generic drugs in their $4 programs--asterisks and all--posted on their Web sites.
- Morning Edition, 11/30/2006, 7:50 a.m.