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The high price of drug prescriptions

Discussion in 'General Topics & Support Issues' started by vene, Apr 27, 2005.

  1. vene

    vene New Member

    I received this in the Ten Lives Club e-mail:

    How much does it cost a drug company?

    Interesting info re: Costco & Sam's club near the bottom.

    The women who wrote this email and signed below are Federal Budget Analysts in
    Washington, D.C.

    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 State 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 chart 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 Percent markup: 8,372%
    Lipitor 20 mg
    Consumer Price (100 tablets): $272.37
    Cost of general active ingredients: $5.80 Percent markup: 4,696%
    Norvasec 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%
    Prilosec 20 mg
    Consumer price (100 tablets): $360.97
    Cost of general active ingredients $0.52 Percent markup: 69,417%
    Prozac 20 mg
    Consumer price (100 t! ablets) : $247.47
    Cost of general active ingredients: $0.11 Percent markup: 224,973%
    Tenormin 50 mg
    Consumer price (100 tablets): $104.47
    Cost of general active ingredients: $0.13 Percent markup: 80,362%
    Vasotec 10 mg
    Consumer price (100 tablets): $102.37
    Cost of general active ingredients: $0.20 Percent markup: 51,185%
    Xanax 1 mg
    Consumer price (100 tablets) : $136.79
    Cost of general active ingredients: $0.024 Percent markup: 569,958%
    Zestril 20 mg
    Consumer price (100 tablets) $89.89
    Cost of general active ingredients $3.20 Percent markup: 2,809%
    Zithromax 600 mg
    Consumer price (100 tablets): $1,482.19
    Cost of general active ingredients: $18.78 Percent markup: 7,892%
    Zocor 40 mg
    Consumer price (100 tablets): $350.27
    Cost of general active ingredients: $8.63 Percent markup: 4,059%
    Zoloft 50 mg
    Consumer price: $206.87
    Cost of general active ingredients: $1.75 Percent markup: 11,821%
    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, Sam's Club and
    other discount volume stores consistently charged little over their cost for the generic drugs. I went to the discount store's website, 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, Comparing,
    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 another discount store for $28.08. I would like to mention that although these are 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.
    I am asking each of you to please help me by copying this letter, and passing it into your own email, and send it to everyone you know with an email address.
    Sharon L. Davis
    Budget Analyst
    U.S. Department of Commerce
    Room 6839
    Office Ph: 202-482-4458
    Office Fax: 202-482-5480


    Robert F. Gilgan
     
  2. Shineillusion

    Shineillusion New Member

    Well, I won't comment on the price gouging that pharmacies may be guilty of, (I say may, because there's an awful lot that goes into determining how much a product must be marked up in order for the business to turn a profit) but I gotta say, there is a whole lot more than the price of the ingredients involved in determining the final price of a drug, especially a name brand drug versus a generic.

    Manufacturing costs are pretty high. The facilities are huge, and must be maintained in pretty strict order. The ultraviolet lights alone cost a bundle. Then there's the cost of the equipment; some of which is amazingly complicated, difficult to maintain, and must be sanitized daily, and broken down, completely washed and sterilized after each batch run. Employees in production areas may have to wear haz-mat suits, and even the ones who don't wear haz-mat suits must wear building dedicated uniforms, special shoe covers, hair nets, face masks and sometimes 'bunny suits'. Every time they leave the production area (for breaks, lunch, etc) they have to throw away the protective clothing, then re-suit before they enter the production area.

    I used to work for Pharmacia-UpJohn, and did all those sanitizing/sterilizing duties. The site I worked at consisted of over 300 different buildings, and took up enough acreage to make a small city, and there are a LOT of people working there...people who must be paid, get benefits such as medical insurance, and must be covered for workmans comp. Because of the chemicals used and drugs manufactured, security was a high priority. Especially after 9/11. All of these things cost money, and those costs get figured into how much they charge for their products. The company isn't printing money in the basement, you know. They have to get it from marketing their products.

    Another cost that drives prices up is liability insurance. Look at the recent spate of law suits relating to Vioxx. Those law suits, frivolous or not, cost the manufacturers incredible amounts of money. And those costs get passed on to the consumer.

    But by far the highest component in the cost of a name brand drug is research and development. Drug companies spend billions on research and developing new drugs. Some of that research doesn't pan out, and a new drug never hits the market. But those that do have still cost the drug company a phenomenal amount of money just to develop. Then there are the costs clinical trials to demonstrate that the drug works, and hopefully is safe. By the time a drug is approved for market, the amount of money spent to get it there is astronomical.

    When you add up ALL the manufacturing costs, research and development costs, business operation costs, the mark up on drugs is far, far lower than the huge percentages suggested.
     
  3. honeybears

    honeybears New Member

    I understand Shine where you are coming from on the actual cost the mfg charges because of everything you stated, but I had no idea pharmacies marked up their prescriptions like that. I would like to see the comparison of what the cost the pharmecist paid for it and what they are charging the consumer, because they way the article is comparing is like comparing apples to oranges concept
     
  4. vene

    vene New Member

    I used to work in an x-ray office and people are always complaining about the high cost of x-rays (those without insurance). For example a simple chest x-ray could be $52. I consider that cheap. My boss has to pay for the workers, equipment, lease of the office, insurance, and the radiologists. It's the same with drug companies.
    Shineillusion, what you say make a lot of sense.
     
  5. DeLaUK

    DeLaUK New Member

    $52 for an x-ray? A human x-ray???? that is cheap, last animal hospital I worked at, granted it was an ER so is generally higher priced than daytime but on the x-rays we were comparable, in some cases cheaper than day hospitals, ours started at $80 for one view. I have no idea how much the film costs to actually make it but I do know that the hospital cost on the film is expensive.
     
  6. Mary_NH

    Mary_NH New Member

    I heard just this morning that pharmaceutical companies are spending BILLIONS/year on their recent advertising blitzes.
    We are paying for that unnecessary cost too. I don't mind paying research but I don't enjoy paying higher prices for their ads.
    That is a HUGE cost they are passing along to the consumer
     
  7. vene

    vene New Member

    $52 is for people without x-ray coverage for a 1v chest x-ray. It's much higher for those with. :roll: Our Kodak films were $2 per sheet at cost.
     
  8. elizavixen

    elizavixen New Member

    Like shineillusion said. There are a lot more costs that go into making a drug. The main cost is research and development. We were just studying this in one of my classes. On average, it costs approx. $500 million on r & d costs per drug. And like only 1 in every 100 drugs makes it to the market to recoup the costs. They use the $$ they get from charging such high prices to pay for more r & d on new drugs. It is very expensive to develop, get approved, and start manufacturing a drug. The whole process takes like at min. 10 yrs. So...it is all a matter of how much you want new drugs. You can accept the ones that are out there and pay cheaply for them, or you can pay the high prices and hope for new cures to previously uncurable ailments.

    Also...stuff is so expensive here in the USA b/c other countries (Canada for example) have gov't regulations about how much they will pay for drugs. So...all the costs (R & D, new drugs, etc.) are beared (sp?) by Americans.
     

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