Tuesday, April 7, 2009

Generic drug cuts escalate price war

One of the nation's largest drugstore chains ratcheted up a price war Thursday, offering deep discounts on generic prescriptions amid national concern about the spiraling cost of healthcare. Drugstore giant CVS Caremark Corp. announced it would sell 90-day supplies of more than 400 medications for $9.99 and offer discounts for cash-paying patients at its in-store medical clinics.

The price war was unleashed by Wal-Mart Stores Inc., the country's largest retailer, a few years ago. Since then, many grocery stores have followed suit. The price competition makes generic drugs just about the only healthcare bill that isn't escalating. Now savvy shoppers can buy many prescriptions for less than laundry detergent, face cream or a pound of deli meat. Retailers can't make much, if any, profit off the cut-rate generics. But that doesn't mean they won't make money off the customers. The stores are using generic prescriptions as loss leaders to bring people in. And cheap drugs do drive other purchases.
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