$4 generic prescription drugs at Walmart and Target

I don't understand why the drug companies would go for this. Nothing makes them have to sell these drugs to Wal-Mart for so cheap. They set their own price. They have tons of drug stores to distribute through already in place. Doctors have to prescribe these medicines. Isn't $4 like 10 times lower than what the drug would have sold for anyway? A lot of people affected by this in the news like to say that medication takes like 50% of their income, so I must assume that $4 generic prescription is quite radical.

My question is, how do the pharmaceutical companies make money doing this?

I just don't see room for the growth they would need to make this opportunity feasible or worthwhile.

Drug company won't even make $4, they would sell it to their wholesaler for like $2.50 or something, no? Because Wal-Mart is going to get a big chunk of the markup, they always will in any channel.

I can see long term maybe, why a drug company would do this. Short term I don't see how they would stay in business.

If someone can explain the economics of this, that would make things simpler.

Maybe there is a conspiracy in all of this? The way I have thought about this, first you have more people taking medications in general, more illegal use of prescription drugs, just more rampant medication use. In fact it could become rampant and cause all sorts of uneasiness. It is easy enough to get a prescription for anything. Doctors love to give out prescriptions, especially psychologists. Couldn't these psychological medications have some hidden agenda in this? They can really mess people up, especially young people.

Also, won't this put huge pressure on pharmacies, especially small pharmacies? I mean this could cause a lot of unemployment, and be the start of some economic crash.

So you put the whole country on generic prozac, and cause pharmacies all over to close down, which may lead us closer to economic chaos? Hmm lol. This is my first conspracy theory! Please talk about it here.

Here's a thread that addresses this issue.

www.abovetopsecret.com...

This post is an exceptional contribution to the subject.

www.abovetopsecret.com...

I think drug companies charge them full price and the stores just loose money.

Meijer to give away some prescription antibiotics for free all of wicth I think is
great.
news.yahoo.com...










[edit on 2-11-2006 by slayerfan]

This relieves poltiical pressure to massively overhaul the pharm industry,
so even if they'll make less money or possibly even lose money, it lets their high profit drugs stay untouched. Most of these $4 prescriptions are for older drugs. They're not giving away their latest and greatest at this discount. Plus, I'm not so sure they even lose money. Mass producing these types of drugs isn't very expensive. Most of the cost in drugs is tied to the R+D, not actual manufacturing costs. I'm sure even the regular prices on a lot of these medicines is less than $20.

Not all generic drugs will be sold at this price, only a fraction of them that are fairly cheap anyway. They probably aren't making any money on these $4 drugs, but people with a lot prescriptions probably have prescriptions that aren't on the list that the stores will make money on, plus it gets people into their stores to buy other stuff.

Sure Wal-Mart and Target may lose money on the drugs they sell for $4.00. But both figure this deal will lead people into their stores to spend money on other things which will more than make up the loss on prescription drugs. For those of you who doubt this, LOOK AT YOUR LOCAL SUPERMARKET!!! Everyweek they have an Item, They think people want at a price where they may lose money, but guess what?? They are betting on the majority of people, doing the rest of their shopping at the store. Where they make back that loss plus more.

Yes you will get the "SMART" people who will only buy what is on sale. But you will get a larger majority, who go for the 1 or 2 items and do the rest of their weekly shopping. This is where the store makes it's money. Believe me,, after spending 10+ years working in a grocery store, the store is not going to offer a promotion were they lose money. Can it happen, YES! And if it does, they will think twice about offering something for a loss again. But they are betting on the majority of the people coming in to purchase the "loss" will spend money on other things. This is where they make up the difference.

While most consumers come into a store feeling they are going to save "X" dollars on the sale items. What they don't realize, is that they are paying more for the everyday items they pick-up there along the way for the convienence. No store is going to go out and suffer a loss (Possibly a big one) unless they make their money back some other way.

Here is the perfect example....With Thanksgiving coming up, stores will be willing to sell TURKEYS at a loss. Why? They are betting on you will do the rrest of your Holliday g there for convience. While you may be saving, say 20-30 cents per pound on a turkey. You are paying that much more, on everyday items like milk and bread. While the competitor may have a slightly to somewhat higher price on turkeys, their everday prices on milk and bread,,, etc. are a good bit lower.

While a lot of marketing figures goes into this, if a store/chain losses big, they will not do this again. A smart shopper will know where they get the best deal on everything they need. And as long as they have the time, they will go to store and store, and buy what is on sale and save money. But if they are looking for convienence,, then the store will not lose out.

I am sure that all of the generic drugs that Walmart and Target are selling for $4.00 are drugs that cost less than that wholesale. A lot of generic drugs are very cheap to manufacture and these are the drugs they are offering. They are not offering the newer generics for this price, nor or they offering the name brands that cost so much due to all of the advertising and marketing that the companies spend to get Drs to prescribe these drugs and people to want to buy them. They may not be making a large amount of money on these drugs, but I am sure they are not losing any either. The K-Marts in our area have been offering about 150 different generic medications for $15.00 for a 90 day supply. These large super chains could not and would not take that kind of loss. Consumers should not delude themselves into thinking these chains are doing them any favors. They are just making less on prescriptions than some other stores are.

Generic drugs mean they are open for any drug company to make. The little pill that used to sell for five bucks a pop can now be made by any drug company that can sell them for a nickel a pill. Basicly the patent ran out and anyone can make them now.

Wal-mart has a serious edge here as well. They move into a community and sell everything as cheaply as possible and even lose money. All the other stores take up the slack and the corporation still makes tons of money. Once Wal-Mart has run every other competitor out of business the store than marks up the price and the store becomes profitable.

The prices on their goods very from store to store. My first computer came from Wal-Mart. I first priced one out in the suburbs where there wasn't much choice of where to shop and then went into town where the competition was more fierce. The in town store computer was 100 dollars cheaper.

If you learn to think like them, you can save mucho money.