Wal-Mart proposes new Rx drug pricing model

The world's biggest retailer, the USA's Wal-Mart, is examining ideas for identifying savings from the annual $200.0 billion US prescription drug bill. For the past eight months, the firm has offered a limited number of generic drugs at a flat rate of $4 per month's supply (Marketletters passim).

Lee Scott, Wal-Mart's chief executive, told the Financial Times that savings to customers were $290.0 million by April and that 30% of prescriptions were issued without using health insurance.

In the future, Bill Simon, Wal Mart's head of pharmacy, argues that the existing pricing model for prescription drugs can and should "be turned on its head." Speaking to the FT, Mr Simon explained that "we're trying to encourage [drug firms] to think about a 40-year brand at a $30 price point as being far more valuable than a six- or seven-year brand at a $100 price point."