Retail pharmacies' generic price war draws customers

Generics are generally a high-profit area, but lately retail pharmacies have been pretty aggressive in lowering their generic prices. Each pharmacy is trying to undercut their competitors and draw business to their own pharmacy. Wal-Mart kicked off the competition in 2006 when it began selling many generic prescriptions at $4 for a month's worth of drugs, and since then, it's been all-out war between large pharmacy players.

Walgreens, CVS and Rite Aid have all been introducing, or marketing heavily, their respective discount programs for customers, and they are seeing results. The competition is beginning to affect customers' decisions about where to shop for medications, no doubt helped along by the worsening economy.

So far, the fight among the retail pharmacies is not affecting the bottom line for mail-order pharmacies like Medco Health Solutions and Express Scripts. Apparently most patients either go for mail-order or retail, and then the competition is among similar models.

To learn more about the competition:
- read this Kaiser Daily Health Policy Report piece