Let's see if Jimbo's take on drugstores changes today

[TonyM]

Walmart's $4 generic drug announcement put a whooping on CVS, Walgreens and Riteaid. On the upside the lines should be shorter at those stores.

[TonyM]

So far he says it's just a blip...let's see how this progresses.

[zyzzyva57]

Be leary with anything drug related with Cramer

He is weak in this area

His forte is technology

Wal-Mart's move does point out what can happen in any sector suddenly

Remember how in early September energy stocks seemed like no-brainer winners

Keep this in mind vis-a-vis Google, "GS," amd Sears Holding

Technically in life, this is called ______ happens

[TonyM]

Agreed, however energy was a no brainer for me back in May, but I went to the well one time too many. $4 generic drugs do not have a Winter season coming up though, and Islamic extremists aren't likely to influence the price either. It's definitely not something you can really plan for, but I've always thought pharmaceuticals were risky due to sudden announcements (Vioxx, etc)

The thing with GS is quite disappointing.

[zyzzyva57]

Your take is so correct! The FDA out of left field can wallop the best of em, along with the lawyers, and now your worse nightmare in business: Wal-Mart comes charging in.

With energy, I am waiting to see if after the Nov elections the Nigerian rebels or the sun coming up will be enough once again to drive the oil traders back into frenzy mode

[TonyM]

Yeah I think that Jim may not be looking at the whole picture here; Walmart has put thousands of small businesses out of business by undercutting them on price, now they are going after bigger game, with the added benefit of "pin action" sales; what will those people be doing while they wait for the prescription to be filled? Why shopping of course, and just in time for the holiday shopping season too, can you say loss leader?

I think Walmart may also cause problems for Apple's new movie gimmick; Walmart will likely exert pressure on the studios for a better price than Apple gets, or risk not having their movies carried at all, Walmart has a lot of leverage with it's vendors, imho. (hence $4 generic drugs)

[zyzzyva57]

The core problem with Wal-Mart is it putting up those unfriendly feeling superstores on every corner

This though was an excellent move by Wal-Mart to increase traffic and increase good will

I can remember what life was like before Wal-Mart and these super terrific small merchants over charged like heck! I have no special regards for them! Sorry, but Normal Rockwell paintings make you dream a dream that lived, sucked!

CVS and Walgreen also hold no special regard for me, because they overcharge

[spanky]

Whether Cramer is actually strong on his evaluation of pharma or not, he has definitely made the call in the book and on the show that competition should be avoided since it can wreck a great little monopoly/duopoly. If this actually takes off, it can wreck the WAG and CVS numbers.

However, CNBC did point out that this pilot program primarily sold drugs that were not very expensive in other places. It may have a limited effect if it keeps the selection small.

If the program expands and takes on the really expensive meds, the bottom could fall out for WAG, CVS and any other "discount" pharmacy. Definitely something to keep on the radar scopes.

Spanky

[Billionaire Boy]

Could this affect the price of PFE at all?

[Amnion]

The thing with GS is quite disappointing.

i must have missed something, what is the GS thing that is disappointing?

[TonyM]

i must have missed something, what is the GS thing that is disappointing?

I was referring to Jim's buy on Friday, buy on Tuesday, sell on Thursday, then buy on Wednesday advice for Goldaman Sachs. He advised sellling on Thursday since it was now up about $13 and was at the top, then said on Wednesday at Boston College that it was easily going up another $50 in 6 months...buy,buy,buy.

[metalheadrr3]

I think it's a good time to look at drugstores. 95% of Rxs are filled with insurance, which means those people aren't going to switch since they won't save any money. The remaining 5% are those who don't have healthcare coverage and pay out of pocket. The $4 rate only applies to certain generics [like perscription strength tylenol and such]. So I seriously doubt that it's going to have the impact that the market is expecting. I believe Walgreens has already come out saything they don't expect it to impact anything nor do they plan on matching the prices.

[TonyM]

Using logic I'd agree with you, however I think the average "low end consumer" reads the headline and flocks to Walmart and while he/she is there does some additional shopping. Target matched their move and if Walgreens, CVS, et al see some market share loss they will likely follow suit if they are able. I think Walmart's play is somewhat similar to 7-11's pr play on Hugo Chavez and Citgo; it doesn't really mean much, but it will get those low end patriotic consumers patronizing 7-11 because they are perceived as American, even though they are Japanese owned.

Walmart isn't really making a difference in the consumers pocket, but it's a great pr move because they realize that the average american (imho) believes what he/she hears from the mainstream media, and what they hear is $4 and Walmart...and they have $4.

Disclaimer: I fill my Rx at CVS, and will continue to do so; I only go to Wally World for ammo...it's dirt cheap.

[zyzzyva57]

http://www.thestreet.com/_tscs/funds/madmoneywrap/10311391.html

[metalheadrr3]

Disclaimer: I fill my Rx at CVS, and will continue to do so; I only go to Wally World for ammo...it's dirt cheap.

I'm glad to hear that because I work at CVS and I've had discussions with both of our Pharmacists about this. And that's their view as well. I agree that it will possibly cause some people to shift, but if someone changes their perscription and it's not $4 [even though it was never supposed to be] they are going to pitch a fit and leave. Even if it is, those are generally people who probably do most of their actual shopping at Walmart anyway.

Not only do I work at a CVS but I have the extreme luxury of working in one near section-8 housing and trailer homes [in the south no less]. So I definetly see plenty of the low end of the spectrum.