$4 generics deal: 55 "too cheap" drugs withdrawn

18 December 2006

Wal-Mart, the world's largest retailer, has been forced to withdraw 55 drugs from its $4 per month generic prescription drug offer (Marketletters passim) in nine states. A spokesman for the retailer, David Tovar, told the New York Times newspaper that "these states have low-cost laws and we wanted to be in compliance." Local laws in the states in question prohibit the sale of goods below cost as "loss leaders." Wal-Mart stated that the relevant drugs would be priced at $9 for a monthly supply.

Responding to questions about the profitability of the $4 drug offer the executive vice president of the Professional Services Division for Wal-Mart, Bill Simon, said: "it can only be in our program if it is profitable. That's why we do not have the newer, more expensive conversions."

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