NEW YORK ( Trefis ) -- We recently asked what the deal was with the 30-day and 90-day prescription plans and how Wal-Mart's new pharmacy prescription plan might impact Walgreens's ( WAG) stock. We decided to ask the same question for CVS ( CVS) stock, which we include here. In addition to Walgreens, CVS competes primarily with Rite Aid ( RAD) and Wal-Mart's ( WMT) pharmacy that offer 30-day and 90-day prescription plans to both insured and uninsured Americans.

What could these possibly mean to the pharmacies? Let us first take a look at some of the popular plans available in the market and the common features they offer the consumers.

Most Popular Pharmacy Prescription Plans

CVS Health Savings Pass offers same coverage of generics at a generous discount of 1 cent to Walgreens, i.e. at $11.99 for a 90-day supply, but it comes with a 10% discount on MinuteClinic services (clinics located at CVS retail pharmacies providing convenient and quality care for common illnesses and vaccinations) along with a $15 annual enrollment fee. Walgreens Prescription Savings Club covers over 400 generics at $12 for a 90-day supply along with a $20 per year enrollment fee.

Rite Aid customers have a choice of a 30-day supply of more than 500 generics for $8.99 or a 90-day supply for $15.99 for each prescription along with 10% discount on Rite Aid's own branded products and a 20% discount on other (uncovered) generics and branded drugs but with no annual enrollment fee. Wal-Mart leads the pack with its characteristically most price competitive offering, a $4 plan for a 30-day supply covering over 300 generics and without any membership fee.

The common features of all these prescription plans convey their very intent, which extends beyond providing affordable health care to Americans. Offering a prescription plan, in a subtle way binds the consumer to that pharmacy chain. An annual enrollment fee not only provides a significant incremental stream of revenues to the pharmacy chain but also ensures consumer loyalty for the duration of the plan.

While pharmacies offer plan members, prescription drugs at seemingly high discounts, often to the tune of 40% and above over the entire period, the consumers often purchase other drugs uncovered by the plans and other personal care products such as soaps, shampoos, etc. on their visits to the pharmacies which brings in additional sales.

Wal-Mart's Plan

So, while these plans serve as a medium for attracting traffic in pharmacy retail outlets, we believe the most significant component of the prescription plans is that it focuses solely on generics. Generics are lower-priced substitutes of branded drugs that are often rolled out after the expiration of their patents. While these cost much lower to the consumer, they also offer higher margins to the pharmacies and are a more profitable product for the pharmacy chains to sell.

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