Walgreens vs. Reality

Happy New Year!

I hope you all were able to enjoy some nice downtime with your families. I was once again fortunate enough to be on a beach that lacked wi-fi access. You can see my massive disappointment in the photo.

Let’s kick off 2009 with a good pre-holiday Wall Street Journal article that you may have missed: Pharmacies Fight Tough Battle on Generic Prices.

The article discusses “what some consider a generic-drug price war.” Yep, I am one of those “some” and am quoted in the article. No surprise to you, dear reader, if you saw CVS Escalates the Generic Price War in November.

But spare a thought for the poor chain executives who must convince shareholders that there is no price war. Walgreen's (WAG) senior vice president of pharmacy pooh-poohed the price war idea and then said: “I think that the pricing is competitive within certain therapeutic categories, and I think what you see is all of the retailers promoting their competitive price.”

Really? Then why did pharmacies have *no* promotion of prices until Wal-Mart (WMT) made its move? Why did Walgreens initially state that it would not match Wal-Mart’s “promotional drug pricing” but then switch course? (See “Walgreens Reacts” in Walgreens’ $4.33 Surrender to Wal-Mart.) Why is Giant Supermarkets now giving away generic antibiotics? Why is Walgreens now emphasizing cost-efficiency instead of growth?

On a related note, I think that I am not going bald. I think what you see is that I am follicly challenged.

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FYI, there is some sad news in the blogosphere. Peerless pharma news junkie Ed Silverman is hanging up his T-1 over at the Newark Star-Ledger’s Pharmalot. Check out his eloquent goodbye and leave him a note. Ed will be moving to Elsevier Business Intelligence, which publishes The Pink Sheet and other pharma titles. Best wishes, Ed!