Saturday, January 21, 2006

A Blurb from Mom

Here's a forward from my mom, an ER nurse. She's been bitching about this for years now. I should post a story about the "national shortage" of the cheap medicine that happened when a more expensive one was just approved (same drug company, damn good marketing ploy, kick you in the face result).

Did you ever wonder how much it costs a drug company for the active
ingredient in prescription medications? Some people think it must cost a
lot, since many drugs sell for more than $2.00 per tablet. We did a search
of offshore chemical synthesizers that supply the active ingredients found
in drugs approved by the FDA. As we have revealed in past issues of Life
Extension, a significant percentage of drugs sold in the United
States contain active ingredients made in other countries. In our
independent investigation of how much profit drug companies really make,
we obtained the actual price of active ingredients used in some of the
most popular drugs sold in America.

The data below speaks for itself.

Celebrex: 100 mg
Consumer price (100 tablets): $130.27
Cost of general active ingredients: $0.60
Percent markup: 21,712%

Claritin: 10 mg
Consumer Price (100 tablets): $215.17
Cost of general active ingredients: $0.71
Percent markup: 30,306%

Keflex: 250 mg
Consumer Price (100 tablets): $157.39
Cost of general active ingredients: $1.88 Lipitor: 20 mg
Consumer Price (100 tablets): $272.37
Cost of general active ingredients: $5.80
Percent markup: 4,696%

Norvasc: 10 mg
Consumer price (100 tablets): $188.29
Cost of general active ingredients: $0.14
Percent markup: 134,493%

Paxil: 20 mg
Consumer price (100 tablets): $220.27
Cost of general active ingredients: $7.60
Percent markup: 2,898%

Prevacid: 30 mg
Consumer price (100 tablets): $44.77
Cost of general active ingredients: $1.01
Percent markup: 34,136%

Since the cost of prescription drugs is so outrageous, I thought everyone
should know about this. Please read the following and pass it on. It pays to
shop around. This helps to solve the mystery as to why they can afford to
put a Walgreen's on every corner.

On Monday night, Steve Wilson, an investigative reporter for Channel 7
News in Detroit, did a story on generic drug price gouging by pharmacies. He
found in his investigation, that some of these generic drugs were marked up
as much as 3,000% or more. Yes, that's not a typo.....three thousand
percent! So often, we blame the drug companies for the high cost of drugs,
and usually rightfully so. But in this case, the fault clearly lies with the
pharmacies themselves. For example, if you had to buy a prescription drug,
and bought the name brand, you might pay $100 for 100 pills.
The pharmacist might tell you that if you get the generic equivalent, they
would only cost $80, making you think you are "saving" $20. What the
pharmacist is not telling you is that those 100 generic pills may have only
cost him $10!

At the end of the report, one of the anchors asked Mr. Wilson whether or
not there were any pharmacies that did not adhere to this practice, and he
said that Costco consistently charged little over their cost for the generic

I went to the Costco site, where you can look up any drug, and get its
online price. It says that the in-store prices are consistent with the
online prices. I was appalled. Just to give you one example from my own
experience, I had to use the drug, Compazine, which helps prevent nausea in
chemo patients.

I used the generic equivalent, which cost $54.99 for 60 pills at CVS. I
checked the price at Costco, and I could have bought 100 pills for $19.89.
For 145 of my pain pills, I paid $72.57. I could have got 150 at Costco for $28.08.

I would like to mention, that although Costco is a "membership" type
store, you do NOT have to be a member to buy prescriptions there, as it is a
federally regulated substance. You just tell them at the door that you wish
to use the pharmacy, and they will let you in. (this is true)
I went there this past Thursday and asked them.

Sharon L. Davis
Budget Analyst
U.S . Department of Commerce
Room 6839
Office Ph: 202-482-4458
Office Fax: 202-482-5480
E-mail Address:


Blogger Diane Harrington said...

I have been a nurse for 27 years and people still die the same way they always have, some young some old. The medical profession likes to say they are helping people live longer but most of what I see is more time in nursing homes. It is pretty pitiful when I care for a 92 year old from a home on 30 different meds half of which are to control the side effects of the other half. Does any one who is 92 need Lipitor a cholesterol lowering drug which costs approx 168 dollars per month. Who cares what her cholesterol level is you have to die of something it is a natural event. Also speaking of cholesterol recent studies show it is not your cholesterol level that is the problem it is the inflammation in your blood vessels that makes them rough and causes plaque. However the drug companies have made billions off these meds along with the female hormone replacement that again made them tons of money and oops sorry it doesn't help your bones and causes cancer. I prefer to get my cancer the old fashioned way by smoking! My plan is when I go to a nursing home no meds at all for any condition no feeding tubes no hospitalization only comfort measures I refuse to let my end of life contribute to their profit line.Someone is getting wealthy in health care and it is usually the drug and insurance companies.

5:48 AM  
Blogger Jesse said...

OK WOW! Wow! And I have to agree with the whole dying thing, fine we live longer, but what about QUALITY of life? I mean what's the point?

Ok so I hate to defend the bad guys here, but I just thought that a counter arguement was necessary; having said that, don't forget the drug cos. bread and butter counter, they have to spend research dollars to get the drugs to market, plus the FDA approval costs, plus the cost of all of the failed drugs that never make it to market. OK so having said that, still what is that going to do, lower their profit margin by 1-2-3 orders of magnitude? As far as I can tell, that still won't put a dent into their margins...just my 2c worth.

1:00 PM  
Blogger geekedout said...

true. i haven't done a full financial analysis and i'm not trying to say anything about justifying their markups. what i am trying to do is show that the actual cost of materials is completely negligable. you're paying their rent, salaries, R+D, etc. now, the point is that with the 250million people with an average of 11 perscriptions per person (check this but that's the scary number i'm told), you've got about 25 billion sales that are nothing but profit. that should explain how they can spend billions on r+d, lobbying, huge profits, etc. that's the point.

8:27 AM  

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