UPDATE 3-Wal-Mart expanding its low-priced drug program

(Adds analyst comment, updates stock price)

By Nicole Maestri

NEW YORK, May 5 (Reuters) - Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) expanded its low-priced drug program, saying on Monday that it is now offering more than 1,000 over-the-counter items for $4 or less and selling some 90-day generic prescriptions for $10.

It also increased the number of women's medications that it offers at a discount.

"We expect that today's extension will generate additional pharmacy volume for the company, especially given the current weak consumer environment and rising health-care costs," wrote Uta Werner, a retail analyst with Sanford C. Bernstein & Co, in a research note.

In 2006, Wal-Mart began selling some generic drugs for $4 per monthly prescription in Florida, and it quickly extended the program to all its U.S. pharmacies.

Last year, it added more medicines to the program and said in September that $4 prescriptions accounted for nearly 40 percent of all prescriptions filled in its Wal-Mart, Sam's Club and Neighborhood Market pharmacies.

The world's largest retailer said pharmacies at its U.S. discount stores, Neighborhood Markets and Sam's Club warehouse locations is now filling prescriptions for up to 350 generic medications, like diabetes drug metformin and asthma drug albuterol, for $10 for a 90-day supply.

It also expanded the number of women's medications it offers for $9, adding drugs to treat osteoporosis, breast cancer and hormone deficiency. It is selling alendronate, the generic version of the osteoporosis drug Fosamax, for $9 for a 30-day supply or $24 for a 90-day supply.