Free antibiotics at Publix

Publix is going Wal-Mart one better by setting the retail price of seven commonly prescribed generic antibiotics at $0. That’s right, free. It’s not even going to bother billing the insurance companies of patients who have insurance. (Maybe they’d have to collect a co-pay, which would spoil the purity of the program?)

It’s an interesting idea, which should make people think twice about whether insurance coverage for prescription drugs is really such a good idea. Widespread existence of Rx insurance has led to huge disparities in drug pricing, undermining the working of the market.

August 7, 2007

3 thoughts on “Free antibiotics at Publix”

  1. I have worked on several initiatives that give patients free generic drugs. The key is helping them (and often more importantly MDs) understand when generics are available and how often they can be used.

    I have seen payors with generic fill rates in the high 70% range while most companies are in the 50% range (best case).

    A $0 generic at the POS is just another loss leader strategy. They have taken a prescription that costs them $1.00 and given it away for free. Great marketing. Since their cost to fill is a fixed cost, it may help them capture some new market share.

    I would hope they bill the insurance companies or the patient would have an incomplete patient profile. In case any of those antibiotics have a drug-drug interaction, that would be a problem.

    I am not sure I get the jump to not having insurance coverage for prescriptions. I will have to think on that one.

  2. Thanks, George. Interesting info.

    Regarding not having coverage for Rx, the thinking goes like this: with many drugs so cheap it’s not worth the bother of doing the processing. Competition by retailers is more effective at driving prices to consumers down than negotiations done by insurers or PBMs with pharma companies.

    Insurance makes sense for high ticket items but not for cheap stuff. Admittedly it is not so straightforward with drugs, considering that branded drugs and biotech products can get into the “major” category.

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