WAL-MART ACCELERATES EXPANSION OF $4 GENERIC RX PROGRAM

Retail giant Wal-Mart is expanding its generic drug discount program to the entire state of Florida four months ahead of schedule and adding to the list of drugs included in the program, but one analyst is questioning the move's impact on the market.

Wal-Mart launched the program -- which offers up to a 30-day supply of certain generic drugs for $4 -- last month in its stores in Tampa, Fla. In addition to announcing a statewide expansion Oct. 6, the company said the number of covered drugs is now 314, up from the original 291.

However, the company "appears to continue to be cherry-picking low-priced and fairly immaterial generics," according to Merrill Lynch analyst Tom Gallucci. One example he cites is lovastatin, a generic version of the cholesterol drug Mevacor. Lovastatin represents only 10 percent of the statin market and "has been losing share," Gallucci said in an Oct. 5 research report. Furthermore, he said, Wal-Mart only included the 10-mg dose of lovastatin in its program, "the least prescribed dosage of this drug."

The drug discount will be available in all of Florida's Wal-Mart, Neighborhood Market and Sam's Club stores, owned by the same company. Wal-Mart has said it will take the program to as many states as possible next year. The covered medications make up nearly one-third of all the prescriptions currently dispensed by the retailer in Florida, Wal-Mart said.

Another large retailer, Target, immediately announced its stores would match Wal-Mart's generic drug discounts across Florida.