Health Care Reform In Aisle 2

In its latest move to win over sick and sniffling Americans, Wal-Mart yesterday announced that it is testing $4 generic drugs, which will cover nearly 300 commonly filled prescriptions. It's no accident that Wal-Mart chose Florida, known for its price-sensitive retirees, to test the plan. It will start in the Tampa area and spread statewide in 2007.

The announcement jolted stock prices of rivals CVS, Rite-Aid, and Walgreen's, as well as that of Wal-Mart, on fears that a drug price war could hurt profits. On Thursday night, Target said it will match Wal-Mart's generic drug prices in the Tampa Bay area. But industry watchers say Wal-Mart's aggressive plan is just the latest example of how determined retailers are to become their customers' No. 1 health partner.

This week, for example, CVS announced completion of its acquisition of MinuteClinic, a rapidly expanding chain of health clinics. So far, 75 of the 93 clinics are located inside CVS stores. Wal-Mart has said it expects to have 50 such clinics in place by the end of 2007. And this week, Rite-Aid announced that it plans to open three in-store health care clinics offering medically supervised treatment for weight control, in partnership with Lindora.



Perhaps the boldest move yet came Wednesday from Target, when it announced it would open eight self-branded clinics in stores in the Minneapolis area. (Target had partnered with MinuteClinic until it was acquired by CVS.)

The trend is so pronounced that it already has its own trade magazine. Retail Clinician predicts that while there were about 200 in-store clinics early this year, there will be 800 clinics by year end, with 3,000 in place by 2007. Both the American Medical Association and the American Academy of Family Physicians have issued guidelines for the clinics, which are typically staffed with nurse practitioners or physician's assistants, and don't require an appointment.

"The drug store of the future likely will be incomplete without one," said Retail Forward, a management consulting firm, in a recent report.

How quickly are consumers embracing the idea of squeezing in healthcare while picking up dog food and a gallon of milk? Consider this: Yesterday, CVS kicked off its flu vaccine season, and will offer 4,500 clinics at its CVS, Osco and Sav-On stores. Last year, in 3,200 clinics, it dispensed 240,000 vaccines.

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