Generic Retail Drug Pricing and States

5/28/2019

Buying generic versions of prescription drugs instead of their brand-name equivalents can significantly reduce overall prescription drug costs across the health care system. According to the IQVIA Institute, generics make up approximately 90% of all prescriptions but they are only a fraction of overall costs. Brand-name drugs make up the remaining 10% but account for 79% of all drug spending. Furthermore, IQVIA estimates that generic drugs saved the U.S. health care system $1.67 trillion from 2007 to 2016. Pharmacists can substitute a name-brand drug with a less expensive generic version when dispensing a prescription, depending on state law. Several factors determine whether a pharmacist can make a generic drug substitution: any difference in price between the two drugs, if the physician has blocked the substitution, patient consent and drugs that are approved as bioequivalent.

Read the full NCSL report published May 2019 describing state actions related to generic drug substitution.

$4 and Free Drug Programs by Large Chains Affected by State Laws

In mid-2006, a few retail chains, including K-Mart, launched a marketplace program offering $5 per month prices for a select list of widely used generics drugs. Then in October of 2006, Walmart announced a start-up program offering deeply-discounted $4.00 prices for a 30-day supply for a substanial list of generic prescription drugs. That program started in Florida and quickly expanded to 3,810 total stores in 49 states by November of 2006. Walmart annouced program with elected officials in 15 states from Alaska to Texas. That year the coverage list included 331 producted with 14 of the top 20 of prescribed medicated in the United States.

By early November 2006, the deep-discount offerings spread to other large national and regional chains. In 2007, Publix, began offering seven prescription antibiotics for free, in a 14-day supply. The free antibiotics are offered to customers regardless of their prescription insurance provider. At that time, Walgreens featured over 300 generics at $12.99 for a 90-day supply; others at $9.99 for a 30 day supply.  Unlike weekly specials, these low prices beamce a semi-permanent consumer feature. In April 2008 the King Soopers and City Market grocery stores owned by Kroger Company launched its own program for $4 generics; however, the Kroger Company has ceased offering its $4 generics. Since the surge in 2006, some retailers have ceased in operation, ended their generic discount offerings, or modified their formulary lists.

The consumer website GoodRx describes it this way: Around 2016, "prices for generic medications started to shoot up, and pharmacies began losing more money on these programs. CVS, a big player, opted to discontinue their savings program. After that, competing pharmacies no longer felt obliged to offer these savings, and many of them discontinued their programs or reduced the number of medications on their savings list."

December 2018:  Kroger Kicks Off Generic Drug Discount Program

The Kroger Co. has revived and launched a new program that enables pharmacy customers to get a range of generic prescription drugs free or at a discount. Called the Rx Savings Club, the program was developed with GoodRx, an online prescription drug price comparison service, and is being rolled out to Kroger Co. pharmacies nationwide this month. The club offers more than 100 common generic drugs in three tiers of savings, depending on the medication: free 30-day/90-day prescriptions, $3 30-day/$6 90-day prescriptions and $6 30-day/$12 90-day prescriptions. Over 1,000 other generics also are available at a discounted price under the program, which Kroger said provides up to an 85% savings. To access the Rx Savings Club pricing, customers must sign up for the program, which carries an annual fee of $36 for individuals and $72 for families. Up to six people are covered under one family membership. Source: Supermarketnews.com

Several wide-reaching and multistate programs are still operational, including generic pricing at Walmart and Walgreens.

  • Save with Drug Discount Programs-- Discounted generic prescription drug programs ($4 per 30-day supply or $10 per 90-day supply) are currently offered at several retail stores. According to Consumer Reports “4 out of every 10 Americans relied on these kinds of drug discount programs last year to find savings.” 6/18/18
  • Christi Davis Gallagher, the former senior communications manager for Walmart, said “Since its launch in September 2006, the program has saved Americans more than $1 billion.” Drug Topics, 12/19/16
  • The Walmart $4 generic prescription program provides generics at a lower price than Medicare Pricing; the $4 generics beat Medicare's co-pays 21 percent of the time, a study found. "It’s more evidence that patients cannot always rely on their health insurance to get them the lowest prices for their prescription drugs, said Dr. Joseph Ross of the Yale School of Medicine, who led the study. “Patients were paying more out of pocket when they were using their insurance than when they went to Walmart,” Ross said. “We did this study in part because of all the discussion about pharmacy gag rules.” The study published in the Annals of Internal Medicine,  NBC-TV News article by Maggie Fox, 7/23/18.
    • History: Walmart began its $4 generic pricing offering in 2006. (The NY Times, 9/21/06). In fall 2007, Walmart announced a line of common drugs for $9 a prescription, including treatments for ADHD and family planning. "In its first year, this program has already saved our customers over $610 million. The list of eligible drugs in this program represents nearly 40% of the prescriptions Walmart pharmacies dispense each year, and includes preventive medications as well as treatments for conditions and diseases in over 18 categories."  Walmart online statement, accessed 10/31/07.
  • Target's generic prescription pricing ceased when CVS Health acquired Target’s 1,672 pharmacies across 47 states in 2015. CVS/pharmacy has its own prescription pricing program.
  • BJ’s Wholesale dropped generic prices to match competitors; however, due to decreased profits it closed its pharmacies in 2007.  Pharmacy Times, 2/1/07.

Large Retail Chain Programs

The following table and links are intended only as examples for policymakers; other retail and commercial locations may have comparable offerings. NeedyMeds, a national nonprofit focused on health care programs, publishes a larger national list for public reference. Here is the organization's list. NCSL does not endorse or promote any products or sales locations.

2018 Nationwide: Store Name Program Name Program
Costco Costco Member Prescription Program Estimated savings between 2% and 40%, calculated at the time of sale
Kroger Kroger Rx Savings Club

Free 30-day/90-day prescriptions

$3 30-day/$6 90-day prescriptions

$6 30-day/$12 90-day prescriptions

Over 1,000 other generics also are available at a discounted price under the program, which Kroger says provides up to an 85% savings.

Rx Outreach Rx Outreach Medications Generic medications in this list are priced between $5 and $20. Price varies based on medication, formulation, dosage and quantity. Contact program for more information.
Walgreens

Walgreens Prescription Savings Club

(Annual membership is $20 for individuals or $35 for families. Sign up online or enroll at a local Walgreens Pharmacy.)

$5, $10 or $15 for 30-day supply; $10, $20 or $30 for 90-day supply (price for a generic drug is based on its tier and whether it is a 30-day or 90-day supply)
Walmart Walmart's Prescription Program $4 for 30-day supply, $10 for 90-day supply

 

 Regional Retail Chain

 Program Details 

States/ Exceptions

Giant Foods,
Stop-and-Shop

$3.99 for 30-day supply; $9.99 for 90-day supply

DC, MD, VA. Northeast region

H.E.B.

$4, $8, or $12 for 30-day supply; $10, $20, or $30 for 90-day supply |  Rx Price List

TX

K-Mart

Generics $5 for 30-day supply; $10 or $15 for 90-day supply  |  K-Mart's generic Price list 

K-mart Prescriptions Savings Club $10 enrollment fee;

Limited store locations due to company downsizing, 2016-2018.

Meijer

Select free prescriptions: antibiotics, Metformin, Atorvastatin Calcium, and prenatal vitamins  | Quantity limitations apply

IL, IN, KY, MI, OH, WI.

Publix

$0 for 14-day supply of antibiotics; $0 for 90-day supply of blood pressure and diabetes; $7.50 for 90-day supply

7 states: AL, FL, GA, NC, SC, TN, VA.

Rite Aid

$9.99 for a 30-day supply; $15.99 for a 90-day supply |  Rx Savings Price List

 

Free to join; available at Rite Aid pharmacy locations

Sam’s Club

5 Prescriptions available for free. Over 200 for $4 per 30-day supply; over 400 for $10 per 30-day supply |  Extra Value Drug List

Free: Donepezil, Pioglitazone, Escitalopram, Finasteride and Vitamin D2 50,000 IU* not available in all states

Available to Sam’s Club Plus Members

Stater Bros

$4 and $8 for 30-day supply; $10 and $12 for 90-day supply |   Rx List

CA

TOPS

Starting at $3.99 for 30-day supply and $9.99 for 90-day supply; Pricing broken into tiers- 15 tiers available |   Rx List

NY, PA, VT

Walgreens

Rx Drug List with "over 400" medications:

30-day supply: $5 (tier 1), $10 (tier 2) or $15 (tier 3); 90-day supply: $10 (tier 1), $20 (tier 2) or $30 (tier 3)

Discounts on more than 8,000 medications

49 states and Puerto Rico

Prescription Savings Club Member fee required: $20/year individual; $35 families/year.

Walmart /
Neighborhood Market

$4 for 30-day supply; $10 for 90-day supply: Price List online  |  Certain drugs including ADHD, heart, family planning prescriptions sell for $9 and $24.

49 states (except ND); prices higher in CA, HI, MN, MT, PA, TN and WI.

Wegmans

Includes over 100 drugs |  $4 for 30 day supply; $10 for 90 day supply | Generic price list

5 states: MD, NJ, NY, PA, VA.

Weis

$4 for 30-day supply; $9.99 for 90-day supply |  Rx List

MD, NJ, NY, PA

Winn-Dixie

$4 for 30-day supply; $10 for 90-day supply |  Rx List

AL, GA, FL, LA and MS

*Select Drugs including but not limited to Women’s and Men’s Health prescriptions available at higher prices, see individual programs for more information

All store data are subject to change without notice; NCSL is not responsible for information on listed third-party web sites.

Unfair Practices Acts May Prohibit Excessive Discounts in Some States

Some existing laws termed Unfair Practices Acts banned certain types of  so-called"predatory pricing."  For example, a 1937 Colorado law prohibits retailers from selling below cost. As a result, several national programs have excluded a number of drugs from the sales programs operating in individual states. The laws cited are in:

  1. California (Cal. Business and Professions Code §§1700017043)
  2. Colorado (Colo. Rev. Stat. §6-2-101, et seq.) 1937; Amended April 2007 - see below * 
  3. Hawaii (Hawaii Rev. Stat. §481-1)
  4. Minnesota (Minn. Stat. §325D.04)
  5. Montana (Mont. Code Ann. §§30-14-201, 207, 209)
  6. Pennsylvania (Pa. Cons. Stat. tit. 73 §201-1, et seq.)
  7. Tennessee (Tenn. Code Ann. §47-205-203)
  8. Wisconsin (Wis. Stat. §100.30)
  9. Wyoming (Wyo. Stat. §40-4-107)

 

In addition, National Community Pharmacists Association interpreted laws with similar effects in:

  1. Arkansas (Ark. §4-88-107)
  2. Idaho
  3. Kentucky
  4. Louisiana (La. Rev. Stat. Ann. §51:422)
  5. Maine
  6. Maryland
  7. Massachusetts
  8. North Dakota (has no operational discount programs as of 1/07)
  9. Oklahoma (Oklahoma Unfair Sales Law, 1949)
  10. Rhode Island
  11. Utah
  12. West Virginia

Failed- Connecticut (SB 442 introduced in April 2017)- Right to Enforce AntiTrust Laws

Colorado Decisions

On Nov. 3, 2006, a jury decision by the U.S. District Court in Colorado concluded that grocery stores (in particlar King Soopers) violated the state's Unfair Practices Act by selling gas below cost via a frequent-customer 10-cent a gallon discount program, and ordered the program to be discontinued. According to court documents, the jury said the grocery chains should pay monetary damages. Case citation: Parish Oil Co., Inc. et al v. Dillon Company, Inc; 1:05-CV-00081-REB-PAC. Colorado legislature enacted HB 07-1208, signed April 16, 2007, intended to allow such sales as long as they are not intended for "injuring competitors and to destroy competition."*

In April of 2008, a three-person panel of the U.S. Court of Appeals ruled that the grocery store chain did not violate the statue because the price of groceries required to qualify for the gasoline discount was more than the discount on gasoline. See 10th Circuit court decision: Appeal from the U.S. District Court for the District of Colorado Parish Oil Co., Inc. et al v. Dillon Company, Inc

*Example:  Colorado Statutes: Unfair Practices Act
Amended by HB 07-1208, April 16, 2007; as written in the Colorado Revised Statutes 2016:
     §6-2-105 Unlawful to sell below cost. “It is unlawful for any person, partnership, firm, corporation, joint stock company, or other association engaged in business within this state to sell, offer for sale, or advertise for sale any product or service for less than the cost of the product or service with the intent to both injure competitors and destroy competition and where the likely result of such sale would be the acquisition or maintenance of a monopoly. A vendor who violates this section is guilty of a misdemeanor..." 
    §6-2-113 Selling below cost. “…in all sales involving more than one product or service and in all sales involving the giving of any concession of any kind, the combined total selling price of all products or services shall be compared to the combined total cost of all products or services involved in the sales to determine whether the vendor or distributor is selling below cost”

Additional Resources