Wal-Mart Widens Drug Discounts, By ANN ZIMMERMAN, WSJ, May 6, 2008

In another expansion of its cut-rate prescription-drug program, Wal-Mart Stores Inc. said it will sell 90-day supplies of more than 300 generic drugs for only $10, taking aim at the burgeoning mail-order pharmacy business by undercutting their prices on some drugs and speeding delivery.

In addition, the Bentonville, Ark.-based retailer said it is adding a second pricing tier to the heavily discounted program for more-expensive medications geared toward women's health. It is adding $9 generic prescriptions for up to a 30-day supply on a handful of drugs for treating osteoporosis, breast cancer, menopause and hormone deficiency.

For instance, alendronate, the generic version of osteoporosis medication Fosamax, will be added to the list. Pharmacies in Wal-Mart Supercenter, Sam's Club and Neighborhood Market stores will offer 30-day prescriptions of alendronate for $9 and a 90-day supply for $24, compared with the previous price of $54 and $102, respectively, the company said. Tamoxifen, a breast-cancer treatment, will sell for $9 for a 30-day supply.

Wal-Mart for the first time is now selling over 1,000 over-the-counter medications at $4, including its private-label Equate brand versions of drugs such as Zantac and Claritin, as well as its Spring Valley private label prenatal vitamins. The price is about 50% lower than at many other national-chain drugstores and supermarkets, Wal-Mart said, citing internal research. The selection represents about a third of Wal-Mart's over-the-counter drug offerings.

Since launching its $4 generic prescription drug program in September 2006, Wal-Mart has seen pharmacy sales grow as a percentage of its overall sales. In the fiscal year to Jan. 31, health and wellness sales, including prescription and over-the-counter drugs, accounted for 9% of its U.S. sales of $239.5 billion, up from 8% two years before. Analysts estimate that drugs account for about half of those sales. The majority of the 350 generic drugs that Wal-Mart sells for $4 will be available at $10 for a 90-day supply.

Wal-Mart expects some competitors to again match these programs. Late Monday, Target Corp. said it plans to match all facets of Wal-Mart's discount prescription and over-the-counter drug plan.

Go to http://online.wsj.com/article/SB121002048022568563.html.

Looks like free enterprise is far more effective in lowering drug costs than any government program, which usually increases prices. Isn't the answer to pharmaceutical costs obvious? Or is Medicare Part D eliminating innovation and reform again?     

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Scary Forecasts by John Goodman, PhD, The Expert Who Explodes Medical Myths.

Today I'm going to let you in on a little secret about forecasting health care costs:  All the forecasters cheat.  Cheat?  Yes, cheat.  

There is nothing underhanded about it.  For people who read footnotes and appendices, the information is all there.  But for ordinary mortals, the projections you see are not what you think they are. 

But let's back up.  Why do you even care about forecasts of future health care spending?  The rational reasons are:  (1) to figure out what path we are currently on, (2) to decide whether the path is acceptable, and (3) if it is not acceptable, to figure out how to get off of it.  

Turns out, however, that the estimators at the Congressional Budget Office (CBO), the Centers for Medicare and Medicaid Services (CMS) and the Social Security/Medicare Trustees have already done tasks (1) and (2) and decided that the future is so terribly awful, they cannot possibly wait for you or anyone else to do task number (3).  

So what we get out of these agencies is not a real projection of the past into the future but one that has been tempered by ...the hope? ...the wish? ...the refusal to accept reality? ...or the fanciful belief that somehow, somewhere, in some totally unexplained way we will ...we must ...we have to ...get off the path we are on.  

For example, the Medicare Trustees, after acknowledging that health spending has been growing at a rate that is 2 to 3 percentage points above GDP growth, assume that the growth rate will decline to the GDP growth rate over the next 75 years.  The CBO, after acknowledging that health care spending per capita has been growing at a rate that is 2.1 percentage points faster than GDP per capita for the past 30 years, assumes much slower rates of growth for Medicare and Medicaid beginning in 2018 and thereafter.  

Will those changes occur?  Maybe.  Maybe not.  It still begs the question:  What path are we really on?  Note:  even after tempering, all the projections are bad.  However, a new CBO www.cbo.gov/ftpdocs/87xx/doc8758/11-13-LT-Health.pdf contains an untempered projection that implies that:  

• Within the next 50 years, by the time today's teenagers reach the retirement age, health care spending will crowd out every other program of the federal government.

• Well before that occurs, Medicaid spending at the state level will crowd out every other function of state government.  

To avoid this unpleasant outcome and keep all other programs in place, we will have to double the size of government!  A previous www.cbo.gov/ftpdocs/82xx/doc8295/07-09-Financing_Spending.pdf  estimates the needed tax rates at 66% for middle-income families and 92% for high-income families - assuming no increase in taxpayer resistance.  

That is the path we are on.  We will not get off of it with pen and ink. We will get off of it only with real reform. . .

John   

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John Goodman, President, National Center for Policy Analysis
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