The Wal-Mart Health Plan

Upscale items in Dallas, followed by a political victory in Chicago. And now, cheap drugs in Tampa. In its latest move to drive store traffic and make nice with politicians Wal-Mart has adjusted their highly criticized health plan.

“They are doing something that may be good for consumers, but they don’t have altruistic motives,” said Patricia Edwards, a portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle. “They are capitalists. They still need to make a profit.”

Analysts have said the risks to Wal-Mart are slim because profit margins on most of the drugs already are low, and the program could help the Arkansas-based retailer address an image problem stemming from its policies on health insurance coverage for employees.

“We’re able to do this by using one of our greatest strengths as a company _ our business model and our ability to drive costs out of the system, and the model that passes those costs savings to our customers,” he said at a Tampa Wal-Mart. “In this case, we’re applying that business model to health care.”

Beginning Friday, the company will offer 291 generic drugs for $4 per prescription at 65 Wal-Mart, Sam’s Club and Neighborhood Market stores in the Tampa metro area. The company said it hopes to expand the program statewide by January–and, should it prove successful, to other states later in 2007.

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