Generics Programs Duel in St. Louis

DAN ALAIMO

ST. LOUIS — Supermarket competition with discounted generic prescription programs has been accelerating across the country, most recently here and in Southern California.

In the past month, Schnucks Markets here and Dierbergs Markets, Chesterfield, Mo., have gone head to head with similar programs, while Stater Bros. Markets, San Bernardino, Calif., has launched a program that competes with the Ralphs banner of Kroger Co., Cincinnati, and the Vons stores of Safeway, Pleasanton, Calif.

All compete with mass merchants Wal-Mart Stores, Bentonville, Ark., Target, Minneapolis, and Kmart, Hoffman Estates, Ill., while Walgreens, Deerfield, Ill., also has a 90-day program. So far, Shop n' Save in St. Louis and Albertsons-Savon in Southern California, both divisions of Supervalu, Eden Prairie, Minn., have not established generics programs, according to their websites.

Schnucks, Dierbergs and Stater Bros. all offer 30-day supplies of generics in the program for $4 and 90-day supplies for $10. Schnucks has over 300 medications on its list, in addition to more than 50 antibiotics that are provided free to patients in 21-day supplies. Dierbergs has over 350 drugs on its list, while Stater has more than 300.

“We launched the free antibiotic program last October and the customer response has been overwhelming,” said Mike Juergensmeyer, group vice president of fuel and pharmacy at Schnucks.

He described the discount generics as “Phase 2” of Schnucks' program. “Through a lot of negotiations, and by bringing the products in through our own facility, we've been able to drive some costs out of the supply chain. So we felt that this was the opportune time to launch an additional program.” The retailer will add drugs to the program “as we are able to drive additional costs out,” he said.

Schnucks is supporting the effort with radio, television, print and direct-mail ads, as well as in-store and on its website, Juergensmeyer said.

“[Pharmacy] is a very competitive industry. We have been watching the $4 generics for a while. Our advantage is, we have a $4 program very similar to most of the other retailers, but we also have the added impact of the free generic antibiotics,” he said.

“We believe this $4/$10 generic plan gives us some significant competitive advantages,” said Greg Guenther, Dierbergs' director of pharmacy. “Many insurance company plans offer attractive savings to subscribers who obtain their medications through mail-order, and our pharmacies have felt the impact of those programs.

“Now we have a competitive answer for direct-mail prescriptions. For many customers, and many medications, our generic program is going to offer a significantly better option to save, and it's going to be more convenient than direct mail.”

Another competitive advantage at Dierbergs is that some retailers offering discount generics, like Walgreens, require customers to pay a fee to obtain a card first, Guenther noted. Most supermarket programs, like Schnucks', do not require this, although some others ask for a loyalty card.