Wal-Mart

(WMT) - Get Report

plunged the pharmacy sector into a debilitating price war Thursday.

Shares of

CVS

(CVS) - Get Report

and other drug store chains tanked.

The selloff started after Wal-Mart said it will sell a month's worth of generic drugs for $4.

The Bentonville, Ark., retail giant said the move covers nearly 300 generic drugs in the Tampa Bay, Fla., area. Wal-Mart plans to expand the offering to the entire state in January and the rest of the country later.

"Each day in our pharmacies we see customers struggle with the cost of prescription drugs," said CEO H. Lee Scott Jr. "By cutting the cost of many generics to $4, we are helping to ensure that our customers and associates get the medicines they need at a price they can afford. That's a real solution for our nation's working families."

Wal-Mart said its pricing plan represents a substantial discount to list prices on covered generic drugs.

Wall Street read that as a notice to flee the pharmacy aisle. CVS plunged 9%,

Walgreen

(WAG)

dropped 6% and

Rite Aid

(RAD) - Get Report

lost 5%.

The trading was furious and the selloff steep. CVS lost nearly $3 billion in market value in trading that amounted by 11:30 a.m. EDT to quadruple its daily average volume.

Among pharmacy benefit managers, which mail discounted drugs in bulk to customers,

Medco

(MHS)

,

Caremark

(CMX)

and

Express Scripts

(ESRX)

each sank at least 3% Thursday.

Wal-Mart dropped 41 cents to $48.46.