Contact: Chris Kofinis (202) 486-6422

WAKEUPWALMART.COM STATEMENT ON WAL-MART’S PRESCRIPTION DRUG PUBLICITY CAMPAIGN

Background:

As reported almost a month ago in the New York Times and USA Today, Wal-Mart needlessly exaggerated the scope and benefits of its low cost drug plan that began in Florida. While Wal-Mart first stated that it planned to lower costs on “nearly 300 generic drugs,” in truth, there are only 124 separate medicines on the list.

In fact, Wal-Mart overstated the scope of its drug plan by nearly two-thirds. As the New York Times wrote, “The plan, which is said to cover 300 drugs, includes only about 124 separate medicines in various dosages, like 12 versions of the popular antibiotic Amoxicillin. It leaves out some popular drugs altogether, like the generic version of the cholesterol-lowering treatment Zocor.”

Worse still, Wal-Mart refuses to address the serious “Health Care Crisis” in its own stores, as well as the billions of dollars in cost it passes onto American taxpayers. Over 775,000 hard-working families of Wal-Mart workers have no company health care, with nearly half (46 percent) of the children of Wal-Mart workers with no health care or on public assistance. And, to add insult to injury, American taxpayers will spend an estimated $9.1 billion over the next five years subsidizing Wal-Mart’s health care costs.

The following statement is attributable to Paul Blank, campaign director for WakeUpWalMart.com:

"Lowering prescription drug costs is a good thing, but Wal-Mart still fails to provide company health care to over half of its employees costing taxpayers billions of dollars. Unfortunately, Wal-Mart’s announcement does nothing to address the serious health care crisis in its own stores and has no plan to help the 775,000 Wal-Mart employees and their families who are cruelly left uninsured.

In addition, Wal-Mart’s continued exaggeration of the size and scope of benefits of this new generic drug plan is needless and deceptive to consumers.

The American people and our elected leaders have the right to expect real actions and real promises from Wal-Mart, not more empty publicity stunts that are intended to repair the company’s faltering public image."

Fact Sheet: Wal-Mart’s “Empty” Publicity Drug Program Rolls into More States

Wal-Mart’s announcement of expanding its limited generic prescription program into 14 other states doesn’t change the basic facts: That while the announcement may net the company favorable headlines and editorials, digging deeper shows that the program itself offers little value to consumers

Smoke and Mirrors: Program of little value, low benefit

Wal-Mart’s List Includes Only 1 Percent of Generics on the Market, Less than 10 percent of Commonly Stocked Generics. The New York Times reported that more than 11,000 generic drugs are currently on the market, and other large pharmacies routinely carry more than 3,000 generics on their shelves. The number of drugs in the Wal-Mart program, which the company misleadingly represents as, “as 143 compounds,” represents only a tiny percentage of these numbers. [New York Times, 9/22/06; Generic Line, 10/4/06; Wal-Mart release, 10/19/06; News Observer (NC), 9/23/06]

Many Drugs on List are Generics of Ingredients Found in Common OTC Drugs Like Advil. Many of the drugs in the Wal-Mart program are the generic ingredients found in drugs common over the counter (OTC) drugs. Some of these include the generics for Advil, Alleve, Mucinex, Robitussin, Zantac, and Claritin. The New York Times reported, “some of the drugs covered, like generic ibuprofen, cost very little and may be currently available for less than $4.” [Wal-Mart Drug List, 10/5/06; New York Times, 9/22/06]

Financial Analyst: Wal-Mart “Cherry Picking Low-Priced and Fairly Immaterial Generics.” A financial analyst with Merrill Lynch wrote in an October 5th report that Wal-Mart “appears to continue to be cherry-picking low-priced and fairly immaterial generics.” The analyst gave the example of Wal-Mart’s program including a generic cholesterol drug that represented only a tiny share of all the cholesterol drugs prescribed, and that even then limiting its availability to a single dosage, which was “the least prescribed dosage of this drug.” [FDA News Drug Daily Bulletin, 10/17/06]

Financial Analyst Said Program Was of Little Significance. A Standard & Poor’s analyst said of the drug program: “It is not as significant as it first seems, in our opinion,” and expressed surprise that investors reacted noticeably to its announcement. [New York Times, 9/22/06]

Community Pharmacists Said Program Gave “Minimal Value to Patients.” The National Community Pharmacists Association called the program “a cynical attempt to gain maximum public relations value while providing minimal value to patients,” and noted, “Many older [generic] medications are on the list and newer, replacement [generic] medications that often work better or have fewer side effects are not included on the list.” In addition, NCPA CEO Bruce Roberts noted:

“Wal-Mart's original list included none of the generic statins used to treat high cholesterol. After much criticism, the company added the oldest one with the worst profile for side effects.” [Release, NCPA, 10/5/06]

Drugs on Wal-Mart List Already Have Co-Pays of $5 or Less. The Generic Line trade publication reported, “A CVS executive, meanwhile, said the drugs Wal-Mart is discounting ‘are all older generics that already have lower reimbursement rates for health plans,’ with a typical copay of less than $4 under many health plans, and a typical copay of $5 for Medicare recipients.” [Generic Line, 10/4/06]

Publicity Stunt or Diversion?

Wal-Mart Seeking to Counter News of Massive Wage and Hour Violations in Pennsylvania. Less than a week before Wal-Mart announced its drug program expansion, a Pennsylvania jury found the company guilty of $78 million in violations for making workers miss breaks and work later hours without pay. The news was a major blow to the retailers, who lost a similar case in California for $172 million less than a year prior. [Bloomberg, 10/13/06]

Wal-Mart Facing Similar Lawsuits in Vast Majority of New Drug Program States. Wal-Mart is being sued for similar wage and hour violations in 12 of the 14 states into which it is expanding its drug program. As of 2006, the company faces active lawsuits in Alaska, Arizona, Arkansas, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, Oregon, and Texas, according to the company’s own reporting.