Now is a great time to drive lower generic drug costs. This is nothing new for most retailers.

August 31st, 2009

It is no surprise to anyone that prescription drugs are one of the fastest growing health care costs in the United States.

This author was watching a television commercial the other night that indicated that as many as 61 million Americans last year did not refill their prescriptions on time.

The company was touting a service capable of filling prescriptions on file for customers automatically and then calling the customers to come pick it up. This would be a great service for me, as I always wait until the last day when I am about to run out. However this does not answer the problem of consumers that can not afford to fill their prescriptions on time if at all.

In trying to research the above inforamtion, I came across a survey from the Kaiser Family Foundation called The Kaiser Family Foundation health tracking poll that indicated of their survey respondents who admitted that they have delayed or put off care due to cost, over one-quarter admitted to failing to fill a prescription. Worse, 18% said that they had cut their pills in half, a practice not

The United States pays the highest prices in the world for brand-name drugs. Retailers have been dealing with this issue for years and have come up with a variety of strategies and programs in order to save their consumers money.

During September of 2006, Wal-Mart announced that it would make nearly 300 generic drugs available for only $4 per prescription for up to a 30-day supply at commonly prescribed dosages. The Wal-Mart plan later drove other retailers to create programs of their own. Target, Meijer, Wegmans, Costco and K-Mart and others have since announced similar generic plans. The Wal-mart program since its inception has grown to over 1,000 over the counter medications and claims to have saved consumers over $1 billion.

One way retailers have been able to drive down their costs with generic drugs and other over the counter medications, is to hold the drug manufacturers and other distributers accountable by purchasing their generic drugs through the non biased use of e-negotiation tools such as reverse auctions. Many retailers are not aware of the very large number of suppliers capable of bidding on their business. With the down economy, these suppliers are very anxious for new business.

History indicates that generic drug events can drive savings in some cases that are greater than thirty percent. Events can be held for dozens of suppliers and hundreds of products at one time and left open for days if not weeks in order to collect pricing prior to the final price compression. The fact is that major pharmaceutical companies use these tools regularly in order to drive down their costs and so should retailers.

Ask your solutions provider how many suppliers they can provide for your sourcing needs?

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