Tuesday, July 23, 2019

Shop 'til the prices drop

It has been said, only partly in jest, that only five people in the world understand U.S. drug pricing, and that they all work for pharmacy benefit managers (PBMs). Readers of Prescription for Bankruptcy or of these postings know that I feel that the entire pharmaceutical enterprise in this country is dedicated to maximizing profit, patients be damned. Recent studies have only reinforced this belief. Earlier this month, drug pricing research firm 46brooklyn analyzed pricing of generic drugs and found unbelievable variation. As an example, Medicare Part D sponsors priced a generic antipsychotic drug aripiprazole (brand name Abilify) from less than 30 cents a pill to over $22 a pill. Generic drugs have a true market-based cost. This is the ingredient cost plus a reasonable margin to keep the PBMs and pharmacies in business. This cost is easily found in pricing benchmarks such as the National Average Drug Acquisition Cost, which is published on-line. This price can then be compared to the better-known Average Wholesale Price (AWP). Most insurers pay some discount to the AWP, and if they are getting a sizable discount, assume this is a good deal. The disconnect between these two prices can be enormous. 46brooklyn Research gave an illustrative example. The median NADAC price for extended release duloxetine (generic Cymbalta) has fallen from $6/pill to pennies. The AWP has stayed rock-steady at $8/pill. So much for generics automatically saving money!
Earlier this summer, MASSPIRG looked at prescription drug pricing at over 250 retail pharmacies across 11 states. They compared the cost to a patient for 12 commonly-used medications, including thyroid, branded and generic Lipitor, Lantus insulin and others. The MASSPIRG staff and volunteers called the pharmacies and asked for the cash price for a typical 30-day supply. The range of prices was, to say the least, broad. 30 tablets of 10 mg lisinopril, used for blood pressure, could cost you from $3.99 to $59.02. 30 tablets of 40 mg atorvastatin, used to lower cholesterol, ranged from $6.99 to $393. 30 tablets of branded Nexium ranged from $54.94 to $950.45; the generic version, esomeprazole, from $10 to $338.40. We have all heard the horror stories of diabetics getting sick and even dying because they could not afford their insulin. Five pens of Lantus insulin ranged from $96 to a chilling $1,759.19!
What is the take-home? First, we must hold our legislators’ feet to the fire and get the industry to start putting patients at least on a par with profits. There is no reason pharmaceutical companies cannot earn a profit, nor are pharmacies charitable organizations, but some limits must be set. As individuals, do what I have always advised my patients – let your fingers do the walking. If you are paying more than $20/month for a prescription, call around. The MASSPIRG staff found that independent pharmacies often had lower prices than did the big chains, so be sure to include some of them in your search. Your wallet will be happier.

Prescription for Bankruptcy. Buy the book on Amazon


  1. The additional information to round this story out is the table of "cost to manufacture" versus "cost at point of purchase" - both inside of and outside of the USA.
    Corporate greed versus the health of our citizens.
    Some of the USA prescription medications are OTC for outside of the USA suppliers.

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