Ever since Wal-Mart and its competitors started selling prescription medicines for $4 each, the annual inflation in drug costs has dropped – and is now at the lowest rate in three decades.
In July, Wal-Mart launched the low cost prescription drug plan, offering a month’s supply of 140 different generic medications for $4. The medicines are used to treat and manage conditions including allergies, cholesterol, high blood pressure and diabetes.
Wal-Mart’s competitors quickly responded with lowered drug costs, and the drug cost inflation rate is now 1 percent for the past year.
During 2005, drug costs were rising at a rate of 4.4 percent. Total spending on drugs rose 8 percent last year as the number of prescriptions continued to grow.
Economists believe the slowing rate of drug cost inflation is caused by two things: people using more generic drugs and the discounted prices offered by the nation’s chain stores.
According to the Kaiser Family Foundation, the average brand name prescription costs more than three times the average generic: $111, compared to $32.