There is now a total bullshit e-mail circulating around the internet about drug prices. Here it is.
WHAT DRUGS REALLY COST
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 chart below speaks for itself. This is based on 100 pills.
Brand Name of Drug / Consumer Price per 100 tabs / Cost of General Active Ingredients / Percent Markup
Celebrex 100 mg /$130.27 / $0.60 / 21,712%
Claritin 10 mg / $215.17 / $0.71 / 30,306%
Keflex 250 mg / $157.39 / $1.88 / 8,372%
Lipitor 20 mg / $272.37 / $5.80 / 4,696%
Norvasc 10 mg / $188.29 / $0.14 / 134,493%
Paxil 20 mg / $220.27 / $7.60 / 2,898%
Prevacid 30 mg / $44.77 / $1.01 / 34,136%
Prilosec 20 mg / $360.97 / $0.52 / 69,417%
Prozac 20 mg / $247.47 / $0.11 / 224,973%
Tenormin 50 mg / $104.47 / $0.13 / 80,362%
Vasotec 10 mg / $102.37 / $0.20 / 51,185%
Xanax 1mg / $136.79 / $0.024 / 569,958%
Zestril 20 mg / $89.89 / $3.20 / 2,809%
Zithromax 600mg / $1,482.19 / $18.78 / 7,892%
Zocor 40mg / $350.27 / $8.63 / 4,059%
Zoloft 50mg / $206.87 / $1.75 / 11,821%
Since the cost of prescription drugs is so outrageous, I thought everyone I knew 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 Walgreens 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 pharmacists 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 use! d 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.
I am asking each of you to please help me by copying this letter, and pasting it into your own email, and send it to everyone you know with an email address.
End of bullshit e-mail.
OK Let's just address the first part of this where they talk about the cost of the ingredients versus the price of the drug. Did you know that if you removed all the water from the human body the left over materials would be worth less than $20? Does that mean that a human is only worth $20?
Now let my brother-in-law Ryan take over. His response to the person who forwarded him this note.
I am convinced that most name brand drug prices are hideously inflated, especially some of the more exotic sounding names listed in your forwarded message. Certainly, eliminating their marketing budgets would take a hefty chunk out of the consumer cost of purchasing these products. I am equally certain that markups, especially for newly developed and released drugs, are grossly inflated. This is particularly true during the first 3 to 7 years after release of a new product and of drugs for which no competing chemical therapies have been developed.
The persons origininating this message are being very disengenuous, however, when they calculate markup solely against the cost of active ingredients used to manufacture the product. Using that index, I should have been able to purchase my home for about 10 to 15 thousand dollars plus, say 15% to cover the 6 months of labor and skills his crews and subcontractors comitted to its construction.
The single greatest cost, by several orders of magnitude, associated with production of a new chemical therapy is R & D. You can investigate this for yourself, but I expect the lead time for development and approval of new drugs is somewhere between 7 and 10 years. During that time, the mavens of manufactured medicine are fronting millions of bucks for chemists, engineers, stastisticians, and legal analysts, to name a few of the more highly paid. Over the same period, they must also acquire some of the most expensive, highly calibrated technical equipment on earth to provide the infrastructure within which uniformly controlled testing and analysis can take place. The cost of an operation on that scale is hardly peanuts and none of it guarantees production of a successful product.
The cost of combining ingredients can begin to come down only after the developer of the drug has recovered 100% of development costs. If a drug is sucessful and widely used for a significant time, manufacturers formulate competing products. Different name brands and generic products become widely available at lower cost.
While I support serious effort to bring drug costs under control, I worry that spreading emotion, hysteria, and trumped up hyperbole will create the kind of politically mandated solution to drug price controls that will ultimately remove any incentive for drug manufacturers to create and produce chemical therapies that keep us healthy, active, pain free, and alive. That price would be higher than any yet paid.
Thanks Ryan.
Another cost he left out is the cost of going through the FDA approval process. That is one reason that many drugs are available in Europe and other countries before they are available here. I know it sounds funny that there are less regulations in Europe over sumpin' but we are far more stringent in approving drugs than the Europeans are. Running a drug through the FDA approval process ain't cheap and it taks a long time. If you have a powerful lobby, like the AIDS lobby, you can get drugs pushed through the pipeline faster.
Liberals (Socialists) are always against companies making profits. But why do companies exist? They exist to make money. If drug companies cannot turn a profit, they will go out of business. Why do you think that there are only two companies left that make influenza vaccine when there used to be fourteen? Because of trial lawyers like John Edwards the potential liability involved in the manufacture of vaccines was not worth the risk. Hence, we had a shortage of vaccines this past flu season. Look no further than the Dimocrats who want to socialize health care and drugs.
But why are drugs cheaper in Canada? Good question. This I will blame on the drug companies. They signed a deal with the Canadian health system to provide cheaper drugs. In my opinion, this was a bad move on their part. They are having the United States subsidize drugs for Canadians. This will wind up backfiring on the drug companies since I'm sure our gummint is gonna let us import drugs from Canada. Hopefully, this will make the drug companies come to their senses and let the Canadians help pay for the cost of developing the drugs. There is no reason for us to subbsidize drug costs for the rest of the world.
As for shopping around for drugs as the e-mail said, that's always a good idea.
Yeah. Yeah. Yeah. I let Ryan do all my work for me tonight, but I'm still tired from the power outage. It's not like I'm getting paid for this.
Later this week, I'll address another bullshit ploy to lower gas prices.
Very interesting info. The only drug with which I'm familiar is Celebrex. The full retail price in Australia is approx. AU$32 per 30 tabs, which roughly equals AU$107 per 100 tabs.
At current exchange rate, that's about US$74.00, i.e. around 43% cheaper than in the US!
Interesting.
Posted by: Jim Riley on May 19, 2004 12:42 AMThe development-cycle time for drugs in the U.S. is more like 10 - 15 years. (My wife and I have a son with cystic fibrosis, so we're very aware of what / how long / how much money is involved in developing new treatments.)
The cost of any new drug produced by a major pharmaceutical company also has to include another cost: They have to recoup not only the development costs of that drug, but also pay for all the other candidate drugs that didn't work out, didn't make it to market, didn't produce any profit and never will. And roughly nine out of ten new pharmaceutical projects don't pan out.
Of course it's cheaper for another manufacturer to come in after the patent period has expired and turn out an identical "generic." It's picking a winner in a horse race that's already been run.
Posted by: F451 on May 19, 2004 07:58 AMRegardless of why the mark-ups exist, the fact is that they are there.
I have no idea if the numbers used in the original are correct, but those who responded didn't debunk the mark-ups -- they just tried to justify them.
Yeah, drugs have a big R&D and marketing cost, but the article says that the biggest markup comes from the PHARMACIST. The responses didn't address his mark-up. I'd be very interested in seeing if that is true.
Posted by: GE on May 19, 2004 01:56 PMUS drug companies surely aren't able to sell their products at full price to Europe. What, with their Socialized medicine?
Dennis, aren't we also paying higher drug costs to cover the margins lost to European drug sales?
Posted by: Paul on May 19, 2004 05:34 PMOr, we could buy stock in the company and get it back in divvies.
And yes, America has subsidised CANADA, MEXICO and OUR ALLIES for decades w/our military and drug prices.
Posted by: Sandy P on May 19, 2004 06:37 PMDenny:
I work for Costco and I can attest to the fact that our drug prices are incredibly low. It's even better if you are an employee because we also have a prescription drug plan as part of our benefits.
I take Lipitor and a 3-month supply runs me about $20 or so. If it was available in a generic, I'd only pay $9.
Costco's philosophy is that low prices make our memberships valuable. And even though you can use a Costco Pharmacy without a membership, most people will join and pay $45 a year when they see how much money they can save on everything else.
Posted by: beaker on May 19, 2004 07:50 PMWhat is left out of this conversation is just how much FDA compliance costs.
R&D expenses are miniscule compared with the total cost of supporting your friendly government bureaucracy.
Posted by: Rich on May 19, 2004 08:38 PMPaul - We subsidize drug pices for the entire world. I just brought up Canada because it is cloer to home.
Posted by: Denny Wilson on May 19, 2004 10:09 PMYou will never print this and I could care less but your boy, Bush, who never met a corporation he didn't like has sold my Mom down the river. She use to be able to get her EXPENSIVE heart medications on "Patient Assistance Programs" with the individual drug companies because she only had Medicare and her Medicare supplemental insurance (which costs her $250.08 a month) didn't cover prescription drugs. Now that Bush sold out his soul to the drug companies for campaign donations the drug companies will be dropping those "Patient Assistant Programs" and Bush, Inc. and the drug companies are going to allow her a WHOPPING 20% discount on ONE drug. That's right, ONE drug (at a huge 20% discount). BFD. With Bush's crappy drug prescription program you are only allowed one discount card per year. I was a Republican for years and left a few months ago because we don't have a "White House" anymore, we have a "Corporation." Bush can't give enough billions to Iraq for Halliburton to build its hospitals and Bush can't give enough free hospital care and prescription drugs to all the illegal aliens flooding into Los Angeles, but his attitude is the hell with Americans citizens. I'm Karl Rove's worst nightmare. Voted for Bush in 2000 and was sooooo happy when he won. I'm a MUCH wiser lady now. Bush's motto is "privatize" everything for his corporate boys and screw Americans as much as he can for corporate profit.
Hey, I feel better already. This rant has been therapeutic, Grouchy! Please don't send me a bill. (I'll need every extra penny to help my Mom with her prescription drug costs now thanks to Bush.) You want to see what a good job Bush is doing for the sovereignty of our nation -- go to www.americanpatrol.com -- and you'll see just what a great job your boy is doing protecting this country. Hey, sneak across our border here in California as an illegal alien, Grouchy, and you will get IMMEDIATE FREE MEDICAL CARE.
As far as your medical problem goes, though, I do hope you feel better, seriously. Take care. Good luck with your HMO -- another little part of Bush's prescription drug plan -- he wants to get people (particularly the elderly who don't understand this mess of piece of legislation -- and get them into HMO's in order to qualify for some of the prescription drug discount cards (over 70 cards at last count). And, Grouchy, you know why you can't go to Canada to buy American-made drugs cheaper? Bush would not allow it to be put in the bill because the drug companies insisted that NO Canadian drug purchasing be allowed to be inserted into the prescription drug bill. Seems "free trade" is great for Bush's corporate buddies but not for the average American.
Yours truly (or should I say "adios")
Chris
Los Angeles, California
(now a "colonia of Mexico" with Bush's blessing)
Chris - Why wouldn't I print it? You didn't start off your rant with insults. I don't mind dissent as long as it is not preceeded by name calling.
First off, Bush is not my boy. He is just a better choice than Kerry. Kerry wants to let the UN fight WWIV (AKA the War on Terror). That to me is the most important issue today. I am against most of Bush's domestic agenda.
As for Medicare, please show me in the Constitution where it says that the gummint is supposed to pay for your mother's health care and her drugs.
And I am so sick of hearing about Haliburton. Haliburton happens to be one of the only companies capable of doing the work in Iraq. Did you know that the Clinton administration was using Haliburton in Kosovo?
And I agree with you about California. BTW, tell me who has benn running California for the last 20 years? Can you say socialists (Dimocrats)? I'm for rounding up all the illegal aliens and shipping them back. The biggest impediment to that happens to be the Dimocrats. They want to give illegal aliens the right to vote.
I have had very good luck wioth my HMO. I estimate my medical bills in 1988 as a result of my accident were over $120K. My HMO paid every bit of it. Now I would have more out of pocket expenses, but by and large I am very happy with my HMO and I am someone who has chronic health problems. The podiatrist took care of me and I am seeing him again tomorrow (Friday).
Like I said, outside of the tax cuts, I think Bush's domestic policies have been disasters. I also think our open borders are a disgrace. Unfortunately, we are in a war for our way of life. Kerry, like most Dimocrats, wants to surrender and let this war go on and off for 40 years just like WWIII (the Cold War). The Dimocrats were on the wrong side of history then and they are on the wrong side of history today. Go ahead and vote for Kerry. I hope your daughters will enjoy wearing burkas.
Posted by: Denny Wilson on May 20, 2004 08:54 PMI am a transplant patient. I pay $3,000 in copays and $3,000 for a medigap plan that helps pay for mt $40,000 in prescriptions. I pay another $1,000 to my company. My company and my wife's company plan to drop me when Medicare's new "Part D" prescription plan takes effect. I will be forced to use the Medicare plan which will only pay for one - the cheapest - of the three anti-rejection drugs I take. The cheapest is $500 a year. The other two, which I will have no coverage for, cost $12,000 each. I estimate my prescription costs to rise to about $34,000 a year from the current $6,000.
Good bye kidney. Back to dialysis, which costs more than double the cost of the anti-rejection meds.
Those with new hearts, livers and lungs simply die after bankrupting their families - unless of course they are rich.
The middle class, which donates the vast majority of organs for transplant, will no longer donate if they stand no chance of ever affording a transplant.
So our transplant programs will flounder as those abroad flourish.
Where will the money that is presently keeping these people alove go? Tax cuts so the rich can buy a second HDTV and big divididends for the corporations who can now let their disabled and ill seniors just die instead of caring for them.
The government recently ruled that it does not discriminate against seniors or the disabled for private corporations to stop JUST THEIR prescription coverage.
Where are we headed as a nation?
Bernie Cullen
Posted by: BernieCullen on May 24, 2004 12:09 AMBernie - I hate to sound like a cold hearted bastard (Which I am), but where does is say that you can take money out of my pocket to pay for your medical expenses? That's what you are doing. Where are we headed as a country? If you get your way, we'll be headed right down the shitter. At least now you can get a transplant. If we implement socialized medicine, which you obviously want, the waiting list will be so long for transplants you can forget it. I can tell you're a Dimocrat because of your "Tax cuts for the rich" bullshit". The rich got bigger tax cuts because they pay the most in taxes. The top 1% of taxpayers are paying over 1/3 of the taxes in this country. How much should they pay? 50%? 75%?
I'm sorry about your health, but that does not entitle you to take money from me to pay for it. Please go whine at another site.
Denny,
You made a few mistakes. The first was to call me a "Dimocrat." Surely you are too intelligent to make the gross oversimplification that all Democrats are dumb and all Republcans are smart. You didn't really mean that, did you?
If you did, it undermines the veracity of the rest of what you said.
That was just namecalling. Where does that help us all to come to a consensus and end the shrillness that has come to dominate the debate in this country.
And whine? I don't believe that I whined. Its your shrillness again. I stated a valid opinion. Private insurance had the money to keep me alive since I first became ill. Now it claims it needs to pull the plug for me and hundreds of thousands of others in the name of higher dividends.
I might call you a libertarian. My company is paying the bulk of my prescription costs. I took the job there based on receiving certain benefits. Hard core capitalism. They paid more money and benefits and they got a better journalist.
How does this take money out of your pocket? Your cost of the paper I work for will be higher?
I am also covered under my wife's prescription plan. The cost of a book where she works will cost you more?
Both firms plan to cancel me when Medicare starts its "Plan D."
Oh, and I had a private plan that was allowed under under a technicality under the law to cancel me when I became ill. All the patients in my area code on my side of the county line were declared out of the coverage area when a reorganization was implemented. Two people lost coverage - me, just as I went on dialysis, and one other person.
Private insurance all too often takes your money, passes profits onto the stockholders, and then cancels you when you become ill.
So the legal setup in this nation - a pro-business adminisration - is dumping me on the government and saying, 'sorry, with all these tax cuts we have to virtually abandon all those with high prescription bills.' This includes those in nursing homes also.
Now where did I go from three private prescription plans I paid for out of my pocket down to none? I could see your being cruel hearted if I failed to provide for myself. But I went way overboard in providing for myself and the government allowed my private insurance to wrangle out of covering me.
I paid a hell of a lot of money for private and public insurance when I was healthy and now that I am sick everyone is trying to get out from the burden.
I don't want to be on the government dole. Though it could be argued that I paid into the Medicare system since it was created so I am entitled to something for my money. The government insurance coverage was paid for out of my pocket. It isnt charity.
I don't see where I am taking money out of your pocket.
Though you could argue that in any insurance system, the sick get a "windfall" while the health are "cheated." But we don't really want to abandon private insurance because it takes money out of your pocket if you don't become ill.
You didn't listen and instead set me up as the straw horse. I am not calling for socialized medicine. Things were working very well for me since I got sick 24 years ago under the PRIVATE system.
(And by the way you are wrong. The wait for a transplant is about the same in nations with socialized medicine.)
But now a pro-government administration is encouraging private industry to dump all its sick employees onto the government, which will grossly underfund them.
Now you said if I get my way and the nation's 100,000 transplant patients or so, and a number of cancer patients on chemo and diabetics and so on are continued to be given the medication they need to survive by PRIVATE or EMPLOYER SPONSORED insurance the nation is going down the "shitter."
Why could private insurance adequately cover these peoples' costs for decades, but now the sick will destroy the nation financially if they are permitted to remain alive?
The culprit here are the people who let private and corporate sponsored insurance plans off the hook. And that was done to increase dividends... to make the rich richer. AND THAT IS MONEY COMING OUT OF MY POCKET. I've had this private insurance since I first began to work. It is being taken away from 100,000 transplant patients, and an equal number of cancer patients and so many others to increase corporate dividends.
The money is coming out of my pocket. Because of greed.
Back to the shrillness. There is one book out that accuses liberals of "Treason," and "Sklander." Another acuses liberals of intentionally working with the Soviets during the Cold War to sell out the United States government to the Soviets.
Go into the book stores and look at these titles.
The shrillness is a crime as is taking medications away from me that my employers and a private insurance company were able to afford for 24 years.
It is whining to complain that we are taklking about more than 100,000 deaths if "Part D" is not changed? Are we really willing as a nation to allow all these people to do in the name of higher corporate profits?
And by the way, in all the years that transplants, chemotherapy and so on were performed the nation became righer as did the rich, under declining tax rates.
Now, about you telling me to go to another site because I disagree with you. That IS stupid.
Bernie Cullen
Posted by: Bernie Cullen on May 24, 2004 10:53 PMBernie - I am a libertarian with a small l. I'm voting Republican in the next election because I'm a one issue guy right now and am for the War on Terror. The Libertarian Party is against it. I'm sorry but as soon as I heard the "Tax cuts for the rich", I classified you as a Dimocrat and everything you said after that was ignored. And yes, I do believe everyone who votes for Dimocrats has below average intelligence. Many of the people who vote Republican do also. Also I don't think it is greed that caused the tax cuts. As someone once said how many poor people will give you a job? If you want a discussion stop the "tax cuts for the rich" bullshit. The rich pay an inordinate amount of their income in taxes. Whom do you classify as rich and how much should they
pay? And BTW, buying and extra HDTV is good for the economy.
If you want to cut down on the cost of health insurance and drugs write your congress critters and demand tort reform and and a streamlined FDA approval process.
"Where will the money that is presently keeping these people alive go? Tax cuts so the rich can buy a second HDTV and big divididends for the corporations who can now let their disabled and ill seniors just die instead of caring for them."
Since Medicare supposedly pays for this, how will tax cuts change it? It was reading the above that made me think you expected the gummint to take care of you. I would have given you more credibility without the "tax cuts for the rich" meme.
The one big problem with programs like Medicare and Social Security is that it allows companies to dump people into them. Wait until we get socialized medicine. Things will get much worse.
Are you saying that there is a similar wait time for transplants in Canada? I find that hard to believe. Can you give me a source for that?
Posted by: Denny Wilson on May 25, 2004 09:51 AMEven if we disagree, thanks for coming back politely. I resent my private companies dumping me. I took the job where I did because they had the best benefits. By the way, when I got sick it took $13,000 in legal fees to get them to pay off on the insurance. Now they are going to dump me. Offering me the best insurance package was bait and switch. I'd like to hear what you have to say about private industry letting me down.
My guess, being a libertarian, you would say they can take away the benefits whenever they wish. Bit isn't there a moral responsibility to live up to their promises. There was a legal one. I did win my legal battle.
But its the government that is encouraging them to dump me and I think this is entirely political. George Bush gets to pay off his corporate friends while looking like a hero to senior citizens. Except that last part isn't working.
See, I could see it if society said we don't want to give dialysis or transplants because of the cost.
But it seems terribly arbitrary for society to keep me alive for 24 years and then just change its mind. Especially when eventually a Democratic administration will eventually come in and change things, restoring those programs after I'm gone.
I know it takes forever to get medical care in Canada, but I do remember reading that percapita they do as many transplants as us and most Western nations. Some of those nations do have age limits that we do not, though.
I really planned ahead for all of this, having two work policies and a private one (until I got sick and they dumped me)
What are your thoughts on the private part of this? Of the insurance companies dumping or being allowed to dump me?
If there weren't all the tax cuts Medicare could afford to give me the medications I need to survive. I don't care how rich the rich get as long as the wealth that I need to live isn't transferred to them.
I can't buy that all the intelligent flock to one party. I think its more of a class thing.
Bernie
Posted by: Bernie Cullen on May 25, 2004 10:15 AMDenny,
I almost forgot. Most nations are anxious to transplant dialysis patients becayse the transplant meds are half the cost or less of dialysis. That ptobably explains the Canada thing. They simply save money by doing transplants.
Let me ask you a quesion - a fair one - if you were a transplant patient would you leave your beliefs unchanged regarding getting the necessary meds if your life depended on it and you had paid tens of thousands of dollars in insurancec payments over the years with the understanding the meds would be available. Would you die uncomplainingly and write off all you had bigen the insurance companies and their promises of care?
Bernie
Posted by: Bernie Cullen on May 25, 2004 10:27 AMArrrrggggghhhhh! There you go again! Wealth is not transferred!!!! The gummint does not own the money. Letting people keep more of what they make is not wealth transfer! See. That is why I think that you are a Dimocrat or a socialist. When you say things like that I have a hard time taking you seriously.
I agree with you on private insurance. I do not think they should be allowed to dump you. How would I feel about transplants if it were me? Quite frankly I would probably just say let me go. I'm not in the best of health right now. To add a transplant on top of it with the attendant pain of the operation ... I went through that once. I don't know if I want to do so again. So I cannot answer that question rationally.
Posted by: Denny Wilson on May 25, 2004 10:58 AM