Wal-Mart's Generics Hit Pharma Stocks

The retailer's move to offer many generics for $4 a prescription took a bite out of pharmaceutical stocks. And it's another salve for Wal-Mart's PR

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By Robert Berner

September 22, 2006 at 4:00 AM UTC

This article is for subscribers only.

When Wal-Mart Stores (WMT) disclosed on Sept. 21 that it will make 291 generic drugs available for only $4 per prescription, the news slammed many pharmacy retailers and generic drug stocks. The announcement also was one more step in the company's carefully orchestrated campaign to improve its image.

The Bentonville, Ark., retailer test program starts Sept. 22 at the 65 Wal-Mart, Neighborhood Market, and Sam's Club pharmacies in the Tampa Bay, Fla., area, and will be expanded to the entire state in January, 2007. The company added that it plans to take the program to as many states as possible next year. "Each day in our pharmacies we see customers struggle with the cost of prescription drugs," said Wal-Mart CEO H. Lee Scott, Jr., in a press release.