I wrote this article on the impact that Wal-Mart’s (WMT) brilliant (I think it’s a stroke of genius) actions will have on CVS (CVS) and Walgreens (WAG) – which is not much, unless grocery stores will follow WMT’s lead, possibly diminishing my “convenience” argument.
I failed to mention in the article that at times insurance co-pay for generic drugs will exceed $4 that Wal-Mart is offering. In my experience most copays for generic run at about $5-$10. So will consumers want to go to Wal-Mart to save from $1 to $6 on generic copay. I’d bet that a very small minority would. The brilliance of WMT’s action is that neither WAG or CVS can follow its strategy otherwise they’ll jeopardize reimbursement rates from the insurance companies.
Wal-Mart actions were not really focused on WAG or CVS since most of their customers have insurance, they were directed towards the uninsured consumers. A bigger question, will insurance companies try to exert pressure on pharmacy retailers to follow WMT’s pricing â€“ they may try but I don’t believe they’ll be successful.
(see original article for position disclosure)