Wally World is finally doing what the majority in Congress prohibited Medicare from doing -- forcing competitive bids
Retailers’ big cut in drug prices is good medicine for U.S.
The move will help millions of Americans.
Already, Target Corp. has said it will match Wal-Mart’s new price for nearly 300 generic drugs, which is as little as $4 for a 30-day supply.
Wal-Mart and Target have the efficiencies of scale to withstand losses or lower profits on drug sales, and they have the bulk-buying power to command price cuts by generic-drug manufacturers.
Whether this will hurt those manufacturers is debatable. Critics say Wal-Mart squeezes the profit margins of its suppliers mercilessly. The company says it is working with 30 participating drug manufacturers "as partners" to help the suppliers cut their own costs.
The head of the Generic Pharmaceutical Association says Wal-Mart’s plan won’t affect members much.
The power of bulk buying is perhaps the most important lesson of all in Wal-Mart’s initiative. Unfortunately for America’s senior citizens, its benefits were lost on a Congress that denied seniors such price advantages. Lawmakers prohibited Medicare from negotiating with drug companies for its prescription-drug program.
The pharmaceutical industry doesn’t want to see lower drug prices, and its lobbying clout won the prohibition on negotiation, ensuring that Medicare patients pay more than they otherwise would have to. Fortunately for the people who depend on the drugs on Wal-Mart’s list of 300, Congress can’t prevent giant retailers from getting the best prices for their customers.
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