Wal-Mart expands drug discounts
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MARK AUSTIN THOMAS: Beginning today Wal-Mart will offer big discounts on generic drugs at its stores in Florida. That move comes four months ahead of schedule. The retailer also said it will bring those cheap drugs to other states by the end of the year. Amy Scott explores what Wal-Mart’s decision will mean for consumers and competitors.
AMY SCOTT: Florida customers will save an average 20 percent on certain generic prescriptions.
Retail analyst Richard Hastings says rather than lose money Wal-Mart will make it up in other departments.
RICHARD HASTINGS: It puts a little bit more money back into the pockets of their existing shoppers so they can buy stuff in the stores.
The move may pressure competitors to lower their prices. Target has already said it will match the discounts, but Hastings doesn’t expect pharmacy chains like Walgreens or CVS to take much of a hit.
HASTINGS: They have a much stronger loyalty based on the shopper profile that prefers a small store, easy to walk into and out of, and they have a lot of drive-through pharmacies.
Hastings says the trend could hurt independent pharmacists that don’t have the same buying power.
Wal-Mart had planned to start the Florida program early next year, but after selling 36,000 new prescriptions during a test in Tampa the company decided not to wait.
In New York, I’m Amy Scott for Marketplace.
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