GENERICS: ONE YEAR LATER

Aug 13, 2007 12:00 PM, BY WENDY TOTH

The first anniversary of Wal-Mart's $4 generics program is approaching, and supermarkets report that service is an effective counter-measure


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Eleven monthly refills have passed since Wal-Mart Stores' disruptive decision to offer certain generic drugs for $4 per 30-day supply.

Generics: One Year Later

Although many supermarkets have matched the scheme or devised plans of their own, industry consequences are far-reaching.

For starters, supermarkets have learned that their biggest asset is personalized service.

“The expansion of $4 programs continues to influence a lot of the marketplace. However, we have taken the approach of explaining the value of the services we provide and the way we price to our customers,” said Donald Clark, vice president of pharmacy operations, K-VA-T Food Stores, Abingdon, Va. “We've been somewhat successful with that.”

Bi-Lo, Greenville, S.C., doesn't advertise $4 generics, but “if people said they were leaving because of the $4, we'd match the prices,” said Curtis Hartin, senior director of pharmacy. “We have no intention of being a low-price offering. We're going to be convenient and we're going to give personal service. Our customers are more than just numbers.”

Generally, Bi-Lo's pharmacists aren't trained to fill so many prescriptions in a tight time period that they can't get to know their customers. “[The Wal-Mart model] is a different model, and that's not the model that we're pushing,” Hartin said. In addition, most of the customers at Bi-Lo are insured, so the $4 plan isn't a huge savings over their usual co-pay, he added.

“We don't advertise being the low-price leader, because we're not.”

Still, the reaction of many customers when the Wal-Mart plan was introduced in each state was one of excited curiosity. “There were some customers that moved,” said Ron Peters, vice president, pharmacy, Minyard Food Stores, Coppell, Texas. “Because first of all, they thought they were going to get $4 on everything, which was not true.”

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