BENTONVILLE, Ark. — Wal-Mart Stores is experiencing share increases of medications included in its highly publicized $4 generic prescription, according to Sandy Kinsey, the retailer's pharmacy divisional merchandise manager.
Along with driving share, the $4 prescriptions saved shoppers $1 billion as of Feb. 29, Kinsey said at Information Resources Inc.'s Reinventing CPG & Retail Summit in Kissimmee, Fla., this month.
Kinsey did not elaborate on the level of the share increases. A spokeswoman declined to reveal further details about Wal-Mart's pharmacy share of market.
Wal-Mart pioneered the $4 generic prescription concept in 2006. Kroger, Target, Giant Eagle and other retailers have followed suit.
Bill Bishop, chairman of consulting firm Willard Bishop, Barrington, Ill., described the effort as a savvy move that has had a big customer impact, while building profits.
“It reinforces [Wal-Mart's] price reputation, which builds share,” he said.
The model altered the economics of the overall pharmacy business because it forced other companies to compete, he added.
Kinsey said the $4 prescriptions are especially beneficial to the 16% of Wal-Mart shoppers classified as “Price Value” shoppers, meaning they have the lowest incomes, are in the poorest health, and often are uninsured and have skipped medical treatment due to cost concerns; the 29% who are “Brand Aspirationals,” those with the second-lowest income and can suffer from hypertension despite their relative youth; and the 11% who are “Price Sensitive Affluents,” mostly Baby Boomers who might have skipped medical treatment due to cost concerns.
The Price Value and Brand Aspirationals comprise about half of the 47 million Americans without health insurance, according to Kinsey.