Kroger, Safeway strike back against Walmart/Humana Part D drug plan

MINNETONKA, Minn. — Could the economy and the bare-knuckles competition that now defines pharmacy retailing lower the price bar even further for widely used generic drugs? It’s already happening.

Walmart upended the low-price end of the pharmaceutical market four years ago when it launched a widely imitated, much-publicized blanket price point of $4 for many of its generic prescription drugs. Over time, $4 has become the de facto price standard for multisource generics at many outlets. But two major developments in recent weeks threaten to upend the uneasy status quo that has existed in prescription discounting over the past two or three years.

Ironically enough, Walmart itself is the source of the new upheavel. In late September, the company announced a new, steeply discounted prescription drug plan to serve seniors enrolled in Medicare Part D. The plan, launched in partnership with insurance provider Humana and marketed as the Humana Walmart-Preferred Rx Plan, will offer enrollees monthly premiums below $15 and co-payments as low as $2 on some generic prescriptions.

First to fire back directly are two of the nation’s biggest supermarket chains. In late November, Kroger and Safeway announced the launch of a new, low-price prescription plan for Medicare Part D beneficiaries, in partnership with UnitedHealth Group.

Called Pharmacy Saver, the new program is a collaboration among Kroger, Safeway and United’s Prescription Solutions affiliate. It will allow members to purchase some scripts for $2 for 30- and some 90-day supplies. It applies to hundreds of prescription drugs, including 8-of-the-10 generics most commonly used by UnitedHealthcare Medicare plan members.

For Kroger and Safeway, the program, available to Part D recipients in January, marks a direct counterpunch to Walmart’s low-price strategy. On a larger scale, the $2 co-pay could further shift the definition of a low-priced generic in the broader market. It remains to be seen whether the launch of Humana Walmart-Preferred Rx and Pharmacy Saver will trigger more moves among pharmacy chains.

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