Generics

The fallout from Wal-Mart's $4 generics campaign could be much more dramatic than we thought. A new study from the Wall Street Journal Online and survey firm Harris Interactive predicts that not only will Wal-Mart-style cheap generics attract customers to stores, they could potentially shift long-term U.S. prescribing and purchasing patterns. Dirt-cheap generics seem very …

Tons of good PR, more high-margin pharmacy business and a truckload of new customers eyeing your rock-bottom prices on socks and light bulbs--what's not to like? Apparently happy with the progress of its $4 generic drug program in Florida, Wal-Mart is rolling the program out on a much larger scale, expanding it to 1,264 stores in Alaska, Arizona, Arkansas, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas and Vermont. Wal-Mart has …

Perhaps responding to the blizzard of industry and consumer PR, Wal-Mart has decided to expand its $4 generic prescription program from a small pilot in the Tampa Bay, FL area to the entire state of Florida right away, rather than waiting for January 2007 for the rollout. With the statewide rollout, Wal-Mart has expanded the list of $4 generics to include 314 drugs, including oncology drug Megestrol and cholesterol …

Big changes in Rhode Island's Medicaid formulary are raising big concerns among mental health advocates. The General Assembly authorized the state Department of Human Services to create a preferred drug list that would limit the drugs covered by Medicaid and switch patients to generics whenever possible. The DHS sought public feedback in a hearing last week. Advocates for the mentally ill pleaded to exclude mental-illness medications from the new regulations. A preferred drug list could …

The New York Times reports on compliance programs that are designed to get patients to stick to their drug regimens. These are both good for the patients' health and for pharmaceutical company profits, as many patients do not take all their prescribed drugs properly--especially for conditions for which symptoms are not obvious such as high-blood pressure. Several companies like McKesson and subsidiaries of manufacturers such as Pfizer Health Solutions have call centers …

The Zitter Group released a report which questions the gains considered likely from consumer-driven health plans. While acknowledging that CDHPs will likely have a positive impact by encouraging the use of generics and promoting more responsible attitudes among healthcare consumers, the report by analyst John Sheehan concludes that plans are likely to "remain a niche offering rather than becoming a dominant player." One unintended consequence of the trend may be to indirectly increase …

In a web exclusive for Health Affairs, Tennessee Blue Cross Blue Shield President Vicky Gregg discusses the lessons of her non-profit's continued financial success and the meltdown of the TennCare experiment. The CEO's interview with economist James Robinson touches on two key healthcare stories: the controversy over the profitability of non-profits and the issue of Medicaid reform.

On pricing: "There was a considerable pushback to the …

San Francisco-based pharmaceutical wholesaler McKesson appears to be finally righting itself after a difficult five years following its disastrous purchase of IT vendor HBO. The company reported earnings of $167 million for the second quarter, about twice what it earned in the same period last year. Analysts say much of McKesson's recent success has come as a result of its core business: the distribution of prescription drugs to hospitals and pharmacies. Sales for the company's …

These appear to be halcyon days for the big PBMs. Their various mergers and IPOs are completed, there are more and more drugs coming off patents enabling them to save more money by using generics and the Medicare Part D drug coverage gives them a whole new market among seniors. By yesterday, the share prices of the big three--Medco, Caremark and Express Scripts--were up more than 50 percent for the year so far, with Express Scripts stock up more than 150 percent.

But today Medco …

Next summer health plans and doctors are likely to start pointing patients in need of a statin away from Pfizer's Lipitor and toward a generic version of the far-less expensive Zocor, which is made by rival Merck. That is something Pfizer hopes to avoid. The drug company is pulling out all the stops to convince doctors and insurers that taking at risk patients off its cholesterol drug is a very bad idea. Will Pfizer be able to convince customers that its medicine is worth the extra …