Wegmans extends offer of free cholesterol drug

For consumers, free is usually good. When the freebie might help you avoid a heart attack, that's usually better.

Retail grocery store competition is fierce, and Wegmans is trying to get an edge by giving away - yes, free - a generic version of what was the world's best-selling drug, the cholesterol medicine Lipitor.

Based in Rochester, N.Y., Wegmans has several stores in the Philadelphia area. Jo Natale, Wegmans' director of media relations, would not say how many new customers the program had generated, but the company decided to extend the offer at least through the end of 2013 after first planning to end it in April.

A prescription is still required for atorvastatin, the generic name for the brand-name Lipitor, made by Pfizer Inc. The medicine would have sold for $67.88 for 30 tablets and $191.08 for 90 tablets in 2012 if the customer had no insurance to offset the cost.

Grocery stores often use a loss leader, a product priced low enough to lead customers to the store. Even if the company loses money on sales of the advertised product, it will profit from sales of higher-priced items.

Groceries with pharmacies have used that approach with some prescription medicine, hoping customers also buy other medication and groceries.

"When grocery stores do a loss leader, it's usually milk or something that appeals to a large segment of customers," said Barbara Kahn, director of the Jay H. Baker Retailing Center at the University of Pennsylvania's Wharton School. "Secondly, Lipitor is such a well-known brand, and you might have some that are reluctant to leave the brand-name version. But free is definitely a way to incent people to change. That is pretty innovative."

ShopRite, which has locations in the Philadelphia region, offers seven diabetic drugs free with a prescription as well as antibiotics.

Wegmans, ShopRite, and Walmart have some generic drugs available for $4 for a 30-day supply. Some are available for 90 days for $10.

Like Wegmans, the Midwestern chain Meijer also offers free atorvastatin with a prescription.

Wegmans' Natale said her company did not view the free atorvastatin as a loss leader in the usual sense because it watches competitors' prices and strives to be consistently low with all its prices.

"We're giving it away, so it is a loss, but loss leaders are often short-term price decreases," Natale said. "This dovetails with our mission of helping people live better lives through healthy living."

Pfizer, which is based in Manhattan and has a facility in Collegeville, held 58 percent of the market for statin drugs with Lipitor and had $8.2 billion in revenue in 2011, according to IMS Health, a health-care technology and information company. But Lipitor lost exclusivity in the U.S. late in 2011 when its patent expired. Now several companies make generic versions, which are the chemical equivalent, and the combined sales have passed those of Lipitor. Wegmans buys from Apotex Inc.

Beyond numbers, Wharton's Kahn said, Wegmans has an easier time making feel-good claim with cholesterol medicine than other loss-leader products.

"Compared to a six-pack of Coke, this is a healthier option," Kahn said, "It lends itself to saying that you care about your customers."