It’s going to be interesting to hear how the lynch mob of anti-corporate, “profit is evil” populists will slam Wal-Mart’s new generic drug program.
Starting next year, Wal-Mart will sell nearly 300 generic drugs at $4 a prescription – even if you’re uninsured. This will, through the ensuing competition, almost certainly lower health care costs for everyone (especially helping the poor).
At some point, expect all of the approximately 70 Colorado Wal-Mart stores – which includes Sam’s Clubs – to carry the affordable drugs.
“We’re not sure exactly when we will reach Colorado,” explains Kevin Thornton, a spokesman for Wal-Mart, though he expects the program to be nationwide by the end of 2007. “There shouldn’t be any issues that I am aware of, but we need to see if local laws, and so forth, will allow this. We’re going to make sure and do it right.”
Jeffrey Zax, an economics professor at the University of Colorado at Boulder who’s written on health care issues and cannot, by any reasonable standard, be called a right-winger, believes the plan is “unambiguously” positive.
“I don’t see any downside to it. I think it’s a terrific idea,” he tells me. “It’s hard to imagine what the downside there could be. … The only change will be that others will try and meet these prices.”
And how long did it take for the free market to kick in? Try one day. That’s when Target announced that “consistent with its long-standing practice to be price competitive with Wal-Mart,” it would “match Wal-Mart’s new, lower prices on generic drugs.” Kmart followed, hyping its own “$5-per-month generic drug plan,” claiming it was a “better value and time saver for customers.”
Zax wondered in our conversation whether Wal-Mart’s plan was a “loss leader” – a product sold below cost to stimulate other profitable items.
“No. No. No. We’re in business to make money, and this is certainly something we will be profitable on – and something our pharmaceutical partners will be profitable on,” explained Thornton. “This is a real example of what Wal-Mart does best, which is taking costs out of the system and passing the savings on to our customers.”
The second half of that statement is unadulterated company-line lingo. But it’s true. Wal-Mart, because of a bottom line and its size, can buy in bulk and sell cheap – cheaper food, cheaper air conditioners, cheaper toys, cheaper furniture and now cheaper drugs.
How important is this for the average consumer or the the lower economic wage-earner? Health care costs spiked an average of 9.6 percent a year from 2000 to 2004; a big part of which went to spiraling prescription drug costs.
How will all this play politically in Colorado? High drug prices and the overall wickedness of Wal-Mart are both talking points for Democrats. Last year, in fact, some Colorado Dems were pushing union-backed, anti-Wal-Mart legislation that might have driven the company (and thousands of jobs) out of the state.
After the bill’s defeat, Denver Dem Fran Coleman admitted that “maybe” she was a socialist and then went on to claim that companies like Wal-Mart “rape this nation, as far as the quality of life.”
The truth is that in one stroke, Wal-Mart has done more for this nation – and living standards – than a thousand third-rate legislators ever could.
What’s more, most American have no problem with Wal-Mart.
In a Pew Research Center national poll released last year, 65 percent of respondents had an overall favorable opinion of the Wal-Mart chain. That number is bound to go even higher now.
Disclaimer: Before you e-mail me … Nope, I’ve never taken a penny from Wal-Mart. In fact, I abhor the store: The mass of people, the endless rows of products and the 23,000 cashier lanes waiting for me, I find all of it disagreeable.
But until someone forces me to shop at Wal-Mart – or others to work there – it’s a great American story.
David Harsanyi’s column appears Monday and Thursday. He can be reached at 303-954-1255 or dharsanyi@denverpost.com.
Jim Spencer’s column, which normally appears inside this section today, will return soon.
