SEATTLE - Wanda Neumen lived an all too typical American nightmare. She got sick, had to quit her job, and lost her health and prescription insurance.

"That's the whole problem. If you have a chronic illness and it's not being monitored it's only going to get worse," she said.

Wanda must have medication to keep her high blood pressure and diabetes in check, but the sky high costs without insurance were a tough pill to swallow.

"So maybe I wouldn't be able to eat or wouldn't be able to have a roof over my head or something," she said.

There are about 47 million Americans like Wanda - a desperate demographic and now a target market.

Issaquah -based Costco has teamed with a dozen pharmaceutical companies that manufacture some 7,000 drugs, pitting them against each other to provide the lowest price for Costco customers.

If you take a prescription to Costco, the pharmacist searches those 7,000 drugs to find one that has the same effects but costs less.

"The opportunity is really in educating the person about the lower cost alternative and then they choose which is the best med for them based on the price," said

So, the question is not just how, but why does Costco sell its pharmaceuticals at such low prices. Well, their motivations are not entirely altruistic.

Costco charges the uninsured $50 a year to take part in the plan.

Since the quiet rollout last July, the company has already seen 30,000 to 40,000 people enroll, giving Costco an important head start in a lucrative segment of the market that has been widely ignored.

Creating a program that is truly novel is the right way to provide benefits for these folks who don't have any other form of benefit.

But how does Costco's program rate against other retailers? We compared Costco's prices for five popular drugs - Diovan, Lunesta, Prevacid, Furosemide and Fluoxetine to four other pharmacies.

In every case, Costco was cheaper by hundreds of dollars - nearly a $300 difference between Costco and the most expensive retailer, Rite Aid.

To double check we took Wanda's list of six prescriptions to the same set of pharmacies.

Even with two $4 generics offered by both Target and Walmart, Costco comes out on top, beating mighty Walmart by almost $50.

Our analysis shows the Costco plan would save Wanda nearly $2,100 a year over the most expensive competitor.   

Costco executives say the average price saving per prescription is about $15. They do make you sign a form attesting that you do not have insurance.