With Discount Generics, Chains Take Bigger Medical Role

Apr 21, 2008 12:00 PM, By Dan Alaimo Editor, Nonfood Strategies dan.alaimo@penton.com


         Subscribe in NewsGator Online   Subscribe in Bloglines

Generic prescription drug promotions are apparently here to stay. They have become so prevalent and expected in many places that they may eventually stop being regarded as temporary price reductions.

When Wal-Mart began its $4 program in the fall of 2006, there were many skeptics, as well as competitors who hoped it would soon go away.

No such luck. While the three major drug store chains have stayed on the sidelines, many supermarket chains, as well as Target, have joined the fray with programs offering $4 prescriptions or free antibiotics.

Just recently, Kroger completed the chainwide rollout of its $4 generics program, in the process becoming the second-biggest in the country, with its 1,900 pharmacies. Over 300 generic medications are covered by the program, with a 30-day supply. Family planning drugs are priced at $9.

Other supermarkets with discount generics or free antibiotics include Giant Eagle, Hy-Vee, Meijer, Martin's, Bashas', Schnucks and Publix.

Initially, the programs were designed to help those without insurance, but as costs rise, patients are frequently weighing a $4 monthly script against their insurance co-pay. A discussion of generic drugs offered by the local supermarket or mass merchant store is now part of many consultations with physicians.

A patient will ask the doctor: “You have been prescribing this drug, but my co-pay just went up. Can we look at something similar on my supermarket pharmacy's list?”

As a result, supermarkets have unexpectedly entered the conversation between customers and their medical professionals. With retailers looking for ways to tap the health and wellness trend, this is significant.

It indicates something those in the grocery industry have long known: They can be key players in helping customers manage their health.

What about profit? Retailers must evaluate the increased store traffic and pharmacy business against smaller margins. The cost of the drugs themselves is relatively small. Even at $4, the retailer can make money. The bigger outlay is the cost of dispensing the prescription, estimated by industry sources at about $10.

But with the success of Wal-Mart's program, and the entry of more supermarket competitors, there is an inevitability to these programs. For example, Wal-Mart said recently that the $4 program has increased its market share of the generics on the list, and resulted in over $1 billion in consumer savings.

The question remaining for the grocery trade — especially in view of its focus on health — is what does it do next? After the offer brings more customers into the store, how do they increase food and nonfood sales, particularly of items that might relate to the patient's condition?

Also, what pharmacy programs can be offered to further help individuals and gain their loyalty? How can pharmacists become more involved with their patients? And what local tie-ins can be created with the medical community to increase awareness of the generic drugs offer? Providing the list to a community's doctors in an easily accessible form might be a start.

The generic drug programs open a new world of possibilities to those willing to embrace them. In time, retailers will learn more about their new role and how to build on it.

Subscribe / Renew to Supermarket News

Supermarket News

The most reliable source of industry news and insight...in print and online.

Most Viewed News

Read More News

Upcoming Events

Foodservice Conference and Explosition: July 25-27, 2008, Produce Marketing Association, Portola Plaza Hotel and Monterey (Calif.) Marriott Hotel; 302.738.7100.

Pharmacy & Technology Conference: Aug. 23-27, 2008, National Association of Chain Drug Stores, San Diego Convention Center; Phone: 703-549-3001.

View All Upcoming Events

Refresh: A Whole Health Blog

Bob Vosburgh

Bob Vosburgh:

Read More Refresh

Articles by Market
Retail/Financial
Marketing
Health & Wellness
Ethnic/Specialty
Nonfoods
Produce
Bakery
Meat
Deli
Center Store
Beverage
Technology & Logistics
Research
Resources
Profiles & Rankings
Webinars
Whole Health Blog

Back to Top

Subscribe to SN

Latest Cover

IRI Fast Trends

Not much remains the same in the food-distribution industry, whether it's the marketing of supermarket departments, the advent of new formats or rapidly changing consumer preferences. See what's changing now in the latest IRI Time and Trends report.

SN Daily Update

newsletter image

The food trade’s leading daily news service. Register Here

Vote For
Category
Excellence

Your input is needed for Supermarket News’ supplier Category Excellence Awards. Choose suppliers doing the best job of filling retailers’ needs in various categories. The deadline for all feedback is July 25, 2008.

Jobs/Classifieds

View All Classifieds

Premium Content

Supermarket News 
Brushing Up

Raising the Bar

The GS1 DataBar can change the way retailers manage coupons and perishable

Supermarket News 
Brushing Up

Brushing Up

With drug stores and mass merchandisers eroding supermarkets' market share of oral care, food retailers can't afford to ignore the ever-changing kids'

Supermarket News 
Sharper Image

Sharper Image

Resets, piled-high displays and new flavors keep cheese sales spreading throughout the store

Supermarket News 
Show Stoppers

Show Stoppers

With a team of almost 60 retailers, brokers and manufacturers volunteering time over six months to create the International Dairy-Deli-Bakery Association's Show & Sell Center

Supermarket News 
Stacking Up

Stacking Up

Variety and visual appeal remain the foundation of produce merchandising, but retailers find design, sampling and signage can build better connections with shoppers.