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Author Topic: Perscription medication mark-ups?
Deranged LunaTech
I'm Dreaming of a White Sale


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Ok, sleuths - here's something posted on one of my forums recently. Any takers for proving or disproving this?

COSTCO! read this...

Let's hear it for Costco!! (This is just mind-boggling!) Make sure you read all
the way past the l ist of the drugs. The woman that signed below is a Budget
Analyst out of federal Washington, DC offices.

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: 1 0 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%


Zestril: 20 mg
Consumer price (100 tablets) $89.89
Cost of general active ingredients $3.20
Percent m arkup: 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 pai n 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. I am asking each of you to please help me by copying
this letter, and passing it into your own e-mail, and send it to everyone you
know with an e-mail address.

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: sdavis@doc.gov


First strike I see - there are 2 Sharon Davis' listed on DOC's website - one with DOC itself, one with NOAA. Neither have a matching email address to the one in the letter.

A search on that email address comes up empty.

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"Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing." --William James

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Esprise Me
We Wish You a Merry Giftmas


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quote:
Originally posted by Deranged LunaTech:
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.

Well, then, some people are clearly idiots. Do the words "research and development" mean anything?

--------------------
"If God wrote it, the grammar must be infallible. Perhaps it is we who are mistaken." -MapleLeaf

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Faith
Happy Holly Days


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Drug-a-chow

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"You watched it. You can't UNWATCH it."

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AnglsWeHvHrdOnHiRdr
Happy Xmas (Warranty Is Over)


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I think you have to be a Costco member to purchase perscriptions at their store, but a 1-year membership could have been paid for in the difference in drug prices she would pay at Costco v. CVS (she is correct, btw, about the price difference between Compazine and its generic equivalent: 100-10mg Compazine tablets are ~$107, while 100-10mg Prochlorperazine are ~$18).

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Deranged LunaTech
I'm Dreaming of a White Sale


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quote:
Originally posted by Esprise Me:
quote:
Originally posted by Deranged LunaTech:
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.

Well, then, some people are clearly idiots. Do the words "research and development" mean anything?
ok, maybe I should clarify my reason for bringing this up....

Obviously there are operating expenses, overhead, r&d, packaging, etc etc that all have to go into the cost above and beyond the simple costs of the ingredients. Additionally, we are talking about businesses - so obviously there will be profits. I have to wonder, however, if these degrees of mark-ups are actually true or not....

--------------------
"Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing." --William James

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Esprise Me
We Wish You a Merry Giftmas


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I didn't mean to imply that you were an idiot, LunaTech. I only meant to mock the writer of the piece you quoted. We do that often here.

Esprise "If you can't debunk 'em, make fun of 'em" Me

--------------------
"If God wrote it, the grammar must be infallible. Perhaps it is we who are mistaken." -MapleLeaf

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Lonely Mountain
Jingle All the Layaway


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The Claritin one is pure bull.

quote:

Claritin: 1 0 mg
Consumer Price (100 tablets): $215.17
Cost of general active ingredients: $0.71
Percent markup: 30,306%

Where in the hell was this person shopping? That's $2.15 per pill. I used to take Claritin and a pack of 40 pills retails for $34.99. That's $0.87 per pill. I wonder if the other numbers are bogus but I don't have time to check right now.

ETA: This may be from when Claritin wasn't OTC but it has been OTC for a long while now.

ETA2: Fixed my poor math.

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"Tis too much proved that with devotion's visage and pious action we do sugar o'er the devil himself." - Hamlet

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Elwood
Little Sales Drummer Boy


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Paxil, Xanax, and Prozac are all available in generic versions for pennies on the dollar. Claritin and Prilosec are available OTC, but they are both darn expensive. I've bailed out on Prilosec because I just can't afford it. It would have better for me if they left it as Rx-only so that insurance would kick-in. As for Claritin, I just have to deal with the drowsiness of the other antihistamines that otherwise work just as well.

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"If I didn't see it and didn't know it was a real news report, I wouldn't believe it. I mean, how nutty can you get?"-Pat Robertson Oct 26, 2006.

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Noemi
Ding Dong! Merrily on High Definition TV


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quote:
Originally posted by Elwood:
As for Claritin, I just have to deal with the drowsiness of the other antihistamines that otherwise work just as well.

I've had really good luck with the generic, loratidine. Works just the same and is a lot less expensive. The best deal we've found so far is 300 tablets for $15 to $16 at Sam's Club.

Noemi

--------------------
Cleverly disguised as a responsible adult.
My blog, no guarantees about witty or intelligent content. My current projects.
Coveted Beads <---- our eBay store, new items being added somewhat regularly

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Sara at home
Ding Dong! Merrily on High Definition TV


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quote:
Originally posted by Deranged LunaTech:
quote:
Originally posted by Esprise Me:
quote:
Originally posted by Deranged LunaTech:
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.

Well, then, some people are clearly idiots. Do the words "research and development" mean anything?
ok, maybe I should clarify my reason for bringing this up....

Obviously there are operating expenses, overhead, r&d, packaging, etc etc that all have to go into the cost above and beyond the simple costs of the ingredients. Additionally, we are talking about businesses - so obviously there will be profits. I have to wonder, however, if these degrees of mark-ups are actually true or not....

Advertising, don't forget advertising. More is spent on advertising and marketing than R&D.

--------------------
Assume that all my posts will be edited at least once. Dyslexic -- can't spell, can't type, can't proofread.

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Roadie
Little Sales Drummer Boy


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quote:
Originally posted by Elwood:
Paxil, Xanax, and Prozac are all available in generic versions for pennies on the dollar. Claritin and Prilosec are available OTC, but they are both darn expensive. I've bailed out on Prilosec because I just can't afford it. It would have better for me if they left it as Rx-only so that insurance would kick-in. As for Claritin, I just have to deal with the drowsiness of the other antihistamines that otherwise work just as well.

I found that I can usually get by with 1/2 a pill on the OTC Prilosec - you might want to give it a try.

--------------------
"The little local company I buy from has CHEAP shipping and I have met their goats." (snapdragonfly)

"And that's one lost erection I'll never get back! You hear me Dan! I'm owed an erection!" (I'mNotDedalus)

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medtchva
Deck the Malls


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quote:
Originally posted by AnglRdr:
I think you have to be a Costco member to purchase perscriptions at their store, but a 1-year membership could have been paid for in the difference in drug prices she would pay at Costco v. CVS (she is correct, btw, about the price difference between Compazine and its generic equivalent: 100-10mg Compazine tablets are ~$107, while 100-10mg Prochlorperazine are ~$18).

No, that's one thing the email is right about. All you have to do is tell them you are going to the pharmacy at the door. They can't restrict you from using it because of a membership. Also, Costco has long been the lowest place to buy prescription drugs. If you've heard about the new Walmart $4 a script program - well Costco has had that for years. Also some Kmarts have as well.

As for the mark up... maybe not to the extreme the email says, but yes, drugs are marked up and yes, a huge part of that is R&D expense.

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Deranged LunaTech
I'm Dreaming of a White Sale


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quote:
Originally posted by Esprise Me:
I didn't mean to imply that you were an idiot, LunaTech. I only meant to mock the writer of the piece you quoted. We do that often here.

No implication taken, Esprise. I just wanted to clarify my reason for bringing it.

As I said - of course there will be various mark-ups - but some fo the quoted mark-ups (30,000x cost) sound extremely excessive. hence my curiosity...

--------------------
"Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing." --William James

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Sara at home
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quote:
Originally posted by medtchva:
As for the mark up... maybe not to the extreme the email says, but yes, drugs are marked up and yes, a huge part of that is R&D expense.

And a huger part is advertising and marketing.

--------------------
Assume that all my posts will be edited at least once. Dyslexic -- can't spell, can't type, can't proofread.

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Rhiandmoi
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And free sandwiches for medical offices. I loved free sandwich day.

I think the Costco pharmacy access might be a state by state thing, because in order to pay for my prescriptions I have to run my Costco card.

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I think that hyperbole is the single greatest factor contributing to the decline of society. - My friend Pat.

What is .02 worth?

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NeeCD
Happy Holly Days


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[nitpick]I'm really sorry to jump into this thread just to be a pedantic nitpicker, but it is spelled prescription. I usually just ignore it, but it's in the thread title and it's been bugging me. Yes, I know, I let little things bug me [Wink] . OK, I'll get out of (collective) your hair now. Thanks for not throwing tomatoes.[/nitpick]

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What does "Bookachow", "YOMANK!" and other lingo mean?

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Pondicherry Pi
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I worked in a chain pharmacy for many years (almost 10)and I can tell you three things from my experience:

1)Of course there is markup, but not that much. I had access to both the retail prices and the prices we paid as a pharmacy. I don't recall any 30,000 percent markups.

2)Pharmacies don't tend to make much of a profit. That's why they tend to have store attached to them. When was the last time you saw a freestanding pharmacy with no drugstore or grocery store associated with it?

Except for a few that specialize in compounding medications and other such specialty services, they just aren't able to be able to survive.

3)Which brings me to point 3:

Bulk stores like Costco that pull in a lot of money can afford to sell their prescriptions at or below cost and often do in the hopes of drawing in customers. In effect, they use their meds as loss leaders.

Generally, the larger/more profitable the store, the cheaper the 'scripts. I certainly remember this from the times I would have to call and "price shop" other chains.

However, it is rare that the variance from pharmacy to pharmacy will be all that great in a given area. They are all usually trying to go as low as they can go and still cover their overhead. (Or not, as I mentioned some particularly well-to-do chains will sell at or below cost.)

So, there's my informed opinion as it were. I realize that it's just my experience and I haven't (and can't in some cases) provide any sites, but I hope my input has been at least somewhat valuable.

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Bassist
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Also keep in mind the OP referred only to the cost of the active ingredient in each tablet. There's lots of other ingredients (all of which have to be tested at a cost), then the bulk powder must be formulated and blended, then the tablets have to be compressed and tested. In many cases, the compressed tablets are coated or imprinted with additional ingredients. Following any final testing, they must be packaged into bottles or blister packs and distributed through the supply chain.

And we won't even touch on the costs to make sterile products [Smile]

--------------------
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medtchva
Deck the Malls


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quote:
Originally posted by Rhiandmoi:
I think the Costco pharmacy access might be a state by state thing, because in order to pay for my prescriptions I have to run my Costco card.

Not according to Costco's senior VP:

"Charles Burnett, Costco's senior vice president for its pharmacy division, said the store prices drugs for people without health insurance, and Costco expects little profit from prescriptions....

Costco, a wholesale membership club, does not require membership fees from pharmacy customers. Burnett said some of the 38 states with Costco stores require that pharmacies be open to the public, so Costco made it a uniform policy to provide pharmacy services without club memberships."

http://www.skagitvalleyherald.com/articles/2004/01/04/news/news02.txt

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ertceps
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I will never go to Walgreen's again to fill a prescription because one day after being prescribed Prilosec for acid reflux I went to the nearest Walgreen's...I had no idea whether I was supposed to get over the counter or prescription Prilosec so I asked the pharmacist and as it happens they were out of the prescription kind but still had a dozen boxes of the OTC Prilosec

I asked what the difference was and after being told there was NO difference(both were one pill per day) I wandered over to the Prilosec on the shelves..I was there for just a couple of minutes when one of the pharmacists came out and gathered up all the Prilosec and took them behind the counter so they could charge 3-4 times what they were asking for the OTC Prilosec

I ended up going to another drug store on the other side of town where they had Prilosec on sale for over $20 LESS than Walgreen's(and that's just the OTC kind not the prescription stuff)

BTW As it happens I later found some generic acid reducer pills for $1 at the Dollar store(I bought all they had and I still haven't run out a year later)...they don't last all day but they worked just fine for my needs

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Lydia Oh Lydia
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I don't even know where to begin on this original post. There's a huge difference between Pharma (the drug manufacturers) and retail pharmacies. The OP seems to blend the two.

Scripts often are different prices at different pharmacies. A retail pharmacy like CVS will negotiate with a pharmaceutical manufacturer such as Merck to get certain prices on Merck drugs like Zocor. A lot of things go into this negotiation process. The end result may be that CVS can charge a lot less for Zocor than the Walgreens next door.

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