I have said that I am a laissez-faire capitalist many times. But, as a laissez-faire capitalist I must be prepared to follow one of its primary rules: Let the buyer beware.
I think it is safe to say that virtually every American goes to a pharmacy from time to time to buy drugs. Many of us go to pharmacies like Rite Aid or CVS. Why is that? Because we think we are looking out for our own best interests – actually, an even more fundamen- tal rule of laissez-faire capitalism. We believe these large companies sell to us for cheaper prices – largely a true statement, but…
The following “letter” came to me through a reader (thanks, JM). I verified it on Snopes. My response was, Wow!
There are a few things that were ignored with regard to the “evil” drug companies. The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion. It also takes a decade to accomplish all the necessary testing. Despite all this they are sued on a regular basis. Any untoward drug reaction can trigger a law suit. Nonetheless, the following is eye-opening. However, if you want to understand this you must read the final paragraph!
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
Percent markup: 8,372%
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%
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 tablets) : $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% (The undisputed champion – RF)
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 consistently charged little over their cost for the generic drugs.
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.
Sharon L. Davis
U.S. Department of Commerce
How can these pharmacies get away with this, ask you? Because, answer I, the system of payment for all medical services is broken by an insurance system that only got worse with Obamacare. The “consumer price” for Lipitor isn’t $272.37. From your perspective it’s a $25 co-pay. If you “let the pharmacist talk you into the generic,” your co-pay is $10 – a 250% savings, again from your perspective! Your co-pay is the same at Costco – you would only be saving your insurance company some money – AND WHO WOULD DO THAT! Do you care what Rite Aid’s profit is? No! So why would you go to Costco instead of your convenient neighborhood Rite Aid? Again, the first rule of laissez-faire capitalism is look out for our own best interests.
The system is broken because it isn’t driven by CAPITALISM!