PRICE COMPETITION PROMPTS BJ's TO DROP PHARMACIES

The first major casualty of the retail industry's ongoinggeneric drug price wars appears to be BJ's Wholesale Club, a171-unit warehouse store chain that has announced plans toclose down its in-store pharmacies due to shrinking profitmargins. BJ's opened its first pharmacy less than 5 years ago.It followed the lead of Wal-Mart, Target, and other majorchains by slashing prices on prescriptions for hundreds ofgeneric drugs to $4 last fall.Although industry analysts citeda variety of factors in the chain'sdecision to abandon its pharmacy operations, depressed profitsdue to the generic prescription price competition may havebeen the final straw for BJ's.

The closure of all 46 in-store pharmacies was estimated tohave been complete by February 3, 2007. A spokesperson forBJ's said the company would not comment on the decision todisband the pharmacy. In a conference call with investors lastweek, however, Interim Chief Executive Officer Herb Zarkin saidBJ's prescription business was not growing. "It just didn't makea lot of sense for us to keep putting the investment in," he said.