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TAMPA, Fla., Sept 22 (Reuters) Wal-Mart Stores Inc. , the world's largest retailer, said it would cut the prices of nearly 300 generic drugs to $4 per prescription starting in the retirement haven of Tampa, Florida.

The move, immediately copied by rival Target Inc. , slammed stock prices of drug retailers, with shares of No. 2 U.S. drugstore chain CVS falling 8.4 percent.

Wal-Mart characterized the program as ''part of its ongoing commitment to provide affordable health care to America's working families,'' but critics called it a public relations move by a giant retailer accused of gobbling up mom-and-pop stores, relentlessly pressuring competitors and suppliers with discounted prices and refusing to provide insurance for many employees, forcing them to rely on government health plans.

Still, some consumer advocates said the move might drive down drug prices in general, and shares of generic drugmakers also fell.

The $4 would save patients already using generics anywhere from less than a dollar to several dollars, depending on the drug, a fraction of the price of most branded drugs.

Wal-Mart said the price ''covers 291 generic medications that are commonly prescribed to treat conditions such as diabetes, cardiovascular disease, asthma, cold viruses and infection.'' It said the plan will be rolled out to the rest of Florida in January, and to as many states as possible next year.

''We estimate that the program will save the state's Medicaid program and Florida taxpayers hundreds of thousands of dollars annually,'' Wal-Mart said.

Pat Sullivan, a retired police officer from Massachusetts, told a Wal-Mart news conference in Tampa his pension often runs out before the end of the month, leaving him without money for his prescriptions.

''I have no outlet other than to break a pill in half and take half today and half tomorrow,'' Sullivan said in praising the plan.

FILLING THE DOUGHNUT HOLE Wal-Mart spokesman Dave Tovar said the company hoped to take advantage of seniors who signed up for Medicare's prescription drug program only to find out they must pay for some of their own drugs in what Democrats are calling ''the Doughnut Hole''.

''We hope that a lot of customers will take advantage of using this and if their co-pay is $7, they can come in and pay $4. We built this so that we will make a profit off $4 prescription drugs,'' Tovar said in a telephone interview.

Wal-Mart was encouraging customers to examine the list of available drugs on its Internet Web site and ask their doctors if they could switch.

''This decision by Wal-Mart hopefully will encourage more competition in the drug marketplace that will lead to lower drug prices overall,'' said Gail Shearer, health policy director for Consumers Union.

But some criticized the plan as falling short.

''I think the tragically missed opportunity is that it doesn't address the serious fact that Wal-Mart costs taxpayers $1.2 billion every year because so many of its workers are uninsured,'' said Chris Kofinis of wakeupwalmart.com, a project of the United Food and Commercial Workers union.

Maryland passed legislation this year requiring Wal-Mart to spend more on health care, and although a federal district judge struck it down in July, similar bills have been proposed in dozens of other states.

Target, which has faced increasingly stiff competition from Wal-Mart, said it would immediately match the drug prices in the Tampa Bay area as part of a long-standing practice of remaining price competitive with its larger rival.

But CVS said the 300 drugs are older generics that already have lower reimbursement rates from health plans and represent less than 0.5 percent of its total pharmacy sales.

''For customers who have prescription coverage, the average generic co-pay is relatively nominal,'' Matt Leonard, senior vice president of pharmacy at CVS, said in a statement.

Shares of Wal-Mart traded in a narrow range and closed at $48.46 on the New York Stock Exchange.

But shares of pharmacies, pharmacy benefit managers, generic drug makers and pharmaceutical wholesalers all fell, with CVS down 8.4 percent, Walgreen Co. down 7.4 percent and Rite Aid Corp. down 5 percent.

(With reporting by Jessica Wohl in Chicago, Maggie Fox in Washington, Deena Beasley in Los Angeles, and Lewis Krauskopf and Chelsea Emery in New York) Reuters DKS VP0655