Walmart vs. Big Pharma

Insider has the “scoop”: on Walmart’s decision to sell generic drugs for $4 per 30 day supply.

It seems to me that the 800-pound gorilla is trying to help its neighbors while still making money. Making money is still definitely at the top of the priority list, but maybe helping neighbors has climbed a few notches. At any rate, this is going to put a lot of pressure on brand-name makers, and, if this idea catches on (especially if pharmacies, who have been caught with their pants down, start to make competitive moves), it could eventually have ramifications on drug development.

Right now, brand name drugs enjoy a few years on market while still under patient, and then generic drug competition pushes the price down. The brand name makers can still make money on the drug, but it’s scaled way back. Now, it just might go to zero.

Drug development is a risky prospect in a risk averse environment. This development (which, as a consumer, I see as positive) is going to make the risk a bit higher. I wonder how we as drug developers are going to respond.

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2 Responses

  1. I lke the pressure on big pharma, though i am no fan or customer of wal-mart. The cost of developing all sorts of exotic cures drives up prices of all drugs and plays into the american notion of a pill for everything.

  2. I’m certainly very curious to see where this all goes. There are pressures at all ends, and with firms like Apotex making shrewd moves to get generics on the market before patents run out, and Medicare D, this ought to change the face of the pharma industry.

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