How can Wal-Mart Pharmacy afford to sell all generic prescriptions for $4?

Question

I have a generic prescription that costs $40, and now they are saying that they can sell it to me for $4?! How can they do that?

Answer 1

Part of it might be that they are buying large amounts directly from the manufacturer (no middleman to raise the costs).

But another part of it might be that it is a "loss leader"...Wal-Mart is deliberately selling these prescriptions for less money than it costs them just to get you to set foot inside their store.

They are counting on the fact that while you are waiting for the pharmacist to process your prescription and count out the pills, you will take some time to look around the store and maybe buy some other stuff. Even with their low prices, they will make up for what they have lost on the medications.

This can be illegal in some states, but even where it is illegal, it is unethical, driving other pharmacies out of business in the long run.

Answer 2

I'm a pharmacy assistant in the UK i can tell you how it works here and i suspect its along the same lines there. When a person comes into our pharmacy with a prescription there is a charge for the prescription per item £6.65 times say 3 items the prescription cost is £19.95. If those items are a POM (prescription only medication) then you have to pay the full charge. If however say 2 of those items are general sales items say 36 paracetamol that we sell for £0.55 and Lactulose which we sell for £2.65 then we inform the customer that they can purchase said items for £3.20 and just pay for the one POM item at £6.65. We don't feel the need to over charge people when the items are already on sale on the shelf for a much smaller charge. I suspect Wal-Mart work on the same principal. Hope this somehow helps you understand why.
Really its nothing to do with them being a big company and buying in bulk. All pharmacies get there medications ordered from the same groups of suppliers. I work in a single store that is not part of a chain and we still get the generic drugs for the same price large stores do.

Answer 3

The drugs on that list are the cheapest drugs. These are drugs per tablet whose true cost is measured in pennies. In fact, a number of those drugs are more expensive at Wal-mart than at other pharmacies.
The Wal-mart bait is limited to only certain drugs and dosages. The drugs on the list are old drugs i.e. glyburide, hydrochlorothiazide.

Answer 4

You haven't figured out how the pharmaceutical companies have conspired to rip off the sick yet? Wal-Mart can buy drugs cheaper because they buy so much (so could the government) and they are passing along the savings as well as a bit of self promotion (can't blame them for that). Enjoy it while it lasts, you won't see anything like it again until medicine industry is nationalized. (National Health Care)

Answer 5

they can't....and they won't long term.

Most of their "4 dollar" precriptions were 7 or 8 dollars earlier.

Consider a quick number crunch:

Scenario 1
'Pie in the sky analysis' of perfect efficiencies and no hidden costs. I'll even exclude drug costs!

Number of Rx's a pharmacist and 3 techs (the most efficient ratio) can fill in an hour would be 50. You have the cost of the label and container. Let's say they cost 25 cents .

That means $3.75 per prescription profit assuming the drugs cost NOTHING. That equals 175 dollars per hour. Now subtract out the prevailing salary at Walmarts where I live for one RPH and 3 techs (about 90 dollars excluding beneifts, payroll taxes, and everything else....just salary). That leaves 85 dollars per hour. Seems like Walmart is going to be making money. Right? Wrong!!

Scenario 2;

The number of presciptions that an RPH and 3 techs can fill AND SELL, and discuss the medications with patients in one hour is closer to 40. Which equals 160 dollars per hour.

Now subtract out fixed costs per prescription (labels, bottles, fixed-costs of hardware etc., toner cartridges yada yada yada) and you get a cost of about 40 cents. That leaves leaves 144 dollars per hour.

Now subtract out salaries, taxes, insurance, 401k matching, and all the other perks and the combined salary costs per hours are closer to 100 dollars per hour.

That leaves 44 dollars profit per 40 prescriptions. Or a drug cost of about $1.10 per prescription. With the limited quantities that they allow it is probably about right. The net effect, after paying for eveything in the Pharmacy.....Walmart itself makes NO money.

It has already resulted in much bigger lines at the Walmart across the street, and many of their 'regular' customers with traditional insurance have made the trip across the street to see me. So far they all been great people that have been loyal to Walmart.....until now.

I LOVE WALMART and their 4 dollar generics!

Now about your paying 40 dollars earlier for something that is 4 now......obviously you were screwed! I hope it wasn't us that sold it too you. How embarrsing would that be!!

Answer 6

I will relate something that happened to me recently. I was in between health insurances and did not have coverage for prescriptions.

Usually I do the three month thing thru insurance. You order your scripts thru a mail order place. They send you 3 months supply. This was covered by my insurance. I called my local pharmacy for a price and they quoted me $348.68 for ONE MONTH of this medication. When I had insurance and ordered THREE MONTHS supply of the same medication, it cost me $60.00.

HOW DO YOU LIKE THOSE APPLES? (That is something my grandma used to say to make a point)

Does that show you what the mark up is on drugs in our country? And how do really sick people make it, you ask? They don't and our government sucks big. (Grandma wouldn't have said that one, that was me making a point.)

Answer 7

Because They Buy In Such Big Bulk Supplies...The More of Something you buy the Cheaper you get it..When we order Drugs for our Shelter Dogs The More We buy The Cheaper We get Them.Just Imagine How Much Walmart Orders!

Answer 8

To be honest that is all it is worth.

Walmart always put other Mom & Pop stores out of business so they are making more money than most companies.

They purchace in BULK--
Many Pharmacutical companies are over charging the consumer

I will not change to Walmart--my co-pay for Generic is only $5.00 and delevered to my front door..

Answer 9

theirs are made of sugar...

sorry - any product purchased in bulk has a significant savings factor- they may sell you your prescription for $4.00 but they hope to make 90 dollars from all the other stuff you buy when you are in their store.