PHOENIX -- Fry's Food and Drug here, a division of Kroger, launched a prescription discount program at the end of March.
The new Rx Advantage Program provides discounts for customers with no health insurance and anyone paying cash for prescriptions, according to the company. To receive pharmacy discounts, customers must present a Fry's VIP Club Card.
There are no claim forms, deductibles, pre-existing condition exclusions or age restrictions in the Rx Advantage Program, Fry's said in a statement.
"With the prices of prescription drugs continuing to soar, Rx Advantage allows us another opportunity to offer lower prices," said Mike Donnelly, president, Fry's Food and Drug. Close to 20% of people in Arizona have no health insurance, he said.
Executives at Fry's and Kroger could not be reached for comment. From the company's Web sites, it was not apparent if the program would be extended to other divisions.
"The benefit [of a discount prescription program] is that the retailer is seen as being really helpful in getting to that segment of the market that is not covered by insurance," said Roy White, vice president of education for the New York-based Educational Foundation of the General Merchandise Distributors Council, Colorado Springs, Colo. "There's a halo effect here in that Kroger is stepping up to provide an answer, a relief to a segment of the population that doesn't have coverage."
In addition to looking good to the world at large, the program will pull more prescription customers and their dollars into the store, making it a win/win all around for the retailer, he pointed out.
While some retailers are reluctant to give up their margin on prescriptions through such discount programs, there comes a point where it's a competitive advantage, said Bruce Kneeland, vice president of special projects, Chain Drug Marketing Association, Novi, Mich.
"If you don't give the cash-paying customer the discount in your stores, your competitor will," he said.
The strength of this type of discount program, Kneeland pointed out, is that the retailer is providing the noninsured consumer access to the same prescription pricing that a larger company or employer would get from a pharmacy benefit manager.
According to a local news report, Safeway, Bashas', Albertsons-Osco, Walgreens, and CVS all offer some kind of prescription discount program for customers. Many of them have a fee attached, however, and some are Medicare cards.