Is The "Wal-Mart Effect" Slowing Drug Inflation?

The inflation rate for prescription drugs—currently at 1 percent for the past 12 months—is at its lowest ever recorded in the past three decades, and some are speculating that Wal-Mart’s popular $4 generic drugs program is helping drive the costs down across the market.

It’s the only area of health care that hasn’t risen sharply, says the New York Times, and it’s at least in part because more consumers are turning to generic drugs, and because new generic versions of popular drugs are coming out. But there’s also speculation that Wal-Mart’s $4 generic drug program, which it launched last year, has helped. For one thing, it’s prompted competitors like Target and Kmart to offer or expand their own discount programs. But it may have also helped drive market prices down. One Labor Department economist said he noticed a dramatic drop in generic drug prices after the $4 plan was launched.

Earlier this month, Wal-Mart announced that they’d offer their employees 2,400 $4 generic drugs, over 2,000 more than what they sell to the public. The Labor Department economist says the drop could be a one-time phenomenon unless the big discounters expand the number of drugs they offer. Nobody knows whether or not that will happen, but Wal-Mart has said that later this month “it may make an announcement regarding its generic drug program for consumers.” In the meantime, look at our earlier post on how to find the cheapest drugs.

“Helped by Generics, Inflation of Drug Costs Slows” [New York Times]
(Photo: Getty)

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