• by Aaron Baar , February 25, 2009

No industry, it seems, is safe from economic fallout. Consumers are even looking to cut costs on their prescription drug spending, to the tune of about 3% less. 

"The two drivers behind this are--they're switching to lower-cost generics, and they're cutting back on how much of a drug they're using," Jason Moy, a manager at Kurt Salmon Associates, tells Marketing Daily. As the recession continues, Moy says, more pharmaceutical retailers will hammer home the price messaging.

According to the research, 20% of consumers cited price as their reason for filling prescriptions at a different retailer, compared with 16% in 2009. Accordingly, Wal-Mart--which has been heavily marketing its discount drug program--has seen its customer base grow 9% over the past year. (Nearly half of Wal-Mart's pharmaceutical customers cited the company's $4 for generics price program as a reason for filling prescriptions there.)

"A lot of their competitors have similar programs. But Wal-Mart has been better at getting the message out there," Moy says. "They've gotten it much more embedded in the consumer's mind. That's not surprising because it fits with their overall message."

Along the same lines, the KSA survey indicates that Target could have an opportunity before it. Customers have an affinity for the brand, but may not be aware that the company's prescription programs are competitive with Wal-Mart.

"They're similarly positioned as a discount and mass chain. And they have a similar program," says Peter Shia, a partner at KSA. "Given the success of Wal-Mart in getting the message out, we would expect Target to do that."

Despite the decreased spending and greater interest in generics, convenience is still the main factor when it comes to filling prescriptions, Shia says. As in real estate, location is a significant factor, which is why Walgreens and CVS are maintaining their market share, he says.

"The vast majority of people are still buying on convenience," Shia says. "When you're sick, you want to get your prescriptions filled quickly."