Wal-Mart Takes Mail-In Rx Program Nationwide

Walmart perscriptions

Looks like Wal-Mart Stores is shaking up the $254 billion prescription-drug business again. The company, which began testing a mail-in prescription program last spring, says it will now expand the program across the country, offering a 90-day supply of many generic medicines for just $10.

The move allows Wal-Mart to gain market share even in areas where it doesn't have stores, and leaves it well-positioned to compete in the "cost-plus" segment of the market, says Adam J. Fein, founder of Pembroke Consulting, a management consulting firm based in Philadelphia that specializes in the pharmacy business. That means it can make deals with individual employers to provide mail-order drugs, no matter where employees live. Wal-Mart struck such a deal with Caterpillar earlier this year.

Like the $4 generic-drug revolution the chain unleashed back in September 2006, he says, the new program "seems to be directed at people who are either uninsured or underinsured, who have greatly benefited from the generic price wars."



The effect of those prices on chains like CVS and Walgreens, he says, hasn't been as much as one might expect. "For consumers who have very good insurance from their employer, the $4 generic hasn't made a significant difference from what their copay would be, and about 95% of people who get prescriptions at these chains have third-party insurance."

The biggest losers, he says, will be supermarkets and independent pharmacies.

While the offer covers about 300 generic prescriptions for $10 each, it also provides access to 3,000 other affordable brand and generic prescriptions with free mail delivery. "Generics account for about 15% of all retail prescriptions, but represent about 30% of retail dollars," says Fein, who also blogs about the economics of pharmacies at "Mail pharmacies are best-suited for maintenance medications, the ones people take day in day out -- blood pressure medications, for example, or those that treat cholesterol, as well as psychiatric drugs."

This latest move solidifies Wal-Mart's position as an industry game-changer. "Until 2006, pharmacies did not compete on price. Now, it's making these prescriptions available beyond its geographical boundaries, which is important -- Walmarts are not very conveniently located for many shoppers, especially in urban areas," he says. "This gives them a very significant competitive advantage."

2 comments about "Wal-Mart Takes Mail-In Rx Program Nationwide ".
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  1. Howie Goldfarb from Blue Star Strategic Marketing, September 17, 2009 at 9:57 a.m.

    I asked my retired parents why they don't use a mail in service. Their response and my own observation: They said they save zero money using a mail in service. I also realized that two retired people with not a lot of time obligations like most folks their age....use going to the Rx as a way to occupy their time. In fact I have noticed a lot of activities I would find time consuming for myself they enjoy because it actually takes up some of their time.

  2. Janis Moore from Consumers Union, September 17, 2009 at 12:01 p.m.

    I am filling a prescription for a friend who is visiting her parents in Maine. Her Dr (here in NY) wanted to change one of her prescriptions. There is a WalMart at every exit off 95 in Maine, but they refuse to take my friends insurance card (Oxford) to fill the scrip at one of their stores up there. So how would anyone with an insurance plan that is not national (ie Aetna) benefit from Wal-Marts mail in service?

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