Kmart Pharmacy Lowered Its Prices. Why Don't Others?

Until last year, Kmart Pharmacy offered a discount generic drug program. After paying a few dollars to join, you could get a 30-day supply of dozens of common meds for $5 or $10 and a 90-day supply for $10 or $30.

But by last December, the company shifted to a new approach, simply lowering the retail price across the board on more than 500 prescription meds, said a Kmart spokesman, Larry Costello. CR's secret shoppers found, for example, that a 30-day supply of generic Lipitor dropped from $242 to $35, and a month's supply of generic Plavix went from $184 to $35.

Costello said the new pricing would help the increasing number of people enrolled in high-deductible health plans, which often don't cover prescription drugs until a person spends at least $1,300 toward their deductible, and those on Medicare who fall into the dreaded "donut hole," a gap in coverage that occurs after their total drug costs for a year reach $3,750. 

Even with the lower prices, Costello says pharmacists are instructed to help find less expensive alternatives or discounts for people who need extra help.

The move to an "everyday low price" model for Kmart Pharmacy may have also been related to a whistle-blower lawsuit brought on by a former Kmart pharmacist that alleged Kmart overbilled the federal programs Medicare, Medicaid, and Tricare for certain medications compared with what it charged cash-paying patients who paid less when using its discount generic drug program. Kmart settled for $32.3 million with the U.S. government in December 2017. (The whistle-blower received $9.3 million.)  

Costello says Kmart's everyday low pricing model was implemented to make prices clearer to consumers. "We cannot speak for pricing models of other pharmacies," he said. "We have tried to make ours as transparent as possible."

CR shoppers can testify that shopping around for prescription drugs can indeed save you money. But it can also be confusing, unpredictable, and potentially expensive.

To find out whether a shopper would be charged the "cash" or retail price or be offered discounts, we sent shoppers to stores near our Yonkers, N.Y., headquarters earlier this year to actually fill several prescriptions for 30 tablets of 10mg of generic Lipitor (atorvastatin).

At one CVS store, our shopper was charged the full retail price of $135—and no discount was offered. But at another nearby CVS, the pharmacist took out a smartphone, checked GoodRx.com—a website that offers discounts on prescription drugs—and downloaded a coupon that dropped the price to $49.

At Walgreens, pharmacists in two locations looked up discounts for shoppers, getting the quoted retail price of $151 down to $37 at one store, while a second shopper paid $23 after a pharmacist there checked several discounts before landing on a low-cost discount card.

And at two nearby Rite Aid stores, one pharmacist charged the shopper $127 after a $20 discount, while the pharmacist at the second used a combination of discounts to get the price all the way down to $18.  

A Rite Aid spokesperson said the company couldn't explain the different experiences our shoppers had without talking with the staff at both locations. And the company would not comment on whether the chain could simply lower its cash prices.

A CVS spokesman, Michael DeAngelis, told us that it recently introduced new tools for pharmacists to help consumers with CVS/Caremark coverage get the lowest possible prescription prices, such as flagging consumers who could benefit from 90-day prescriptions or lower-cost generic alternatives, and alerting pharmacists if there is a lower-cost alternative. Such cost-saving measures will be rolled out to the public throughout the year.