Cutting out the middlemen and company overheads

I wish to comment on the almost incredible mark-ups of the costs of our normal medical presciption drugs, which is being forwarded among friends.

While it is true that the profit margins are unduly high, I think it is too simplistic to accept the statements without qualifications.

It is without doubt that purchasing anything direct from the source is cheaper than from the retailer. But is it practical? It was only with the recent advent of internet trading that we could buy something conveniently at a much lower price. For physical goods, there is the cost of postage in lieu when purchasing from the internet. A very good example of doing away with the middlemen is the on-line purchase of air tickets which enables the lowering of ticket prices by budget airlines.

If we were to continue having convenient stores (pharmacies in this case) where we can buy medicines, we cannot escape from the stages and business requirements of having a premises and its necessary costs; purchases and keeping of stock; having staff, administration costs, some advertising (even if it were just a board to inform the availability) and so on. In the case of pharmacies, there is also the professional knowledge of pharmacists when prescribing drugs which we tend to take for granted. They are liable in cases of negligence. So there is also the insurance to cover professional negligence.

Then there is the profit factor. Who would provide goods and services for free?

We should also not forget the heavy initial costs of research and development without which the products would not have been discovered. These costs need to be recovered by the pioneer company or subsequent company which had to pay royalties to the pioneer holding patent rights.

The article:

The cost of your normal medical prescription

Let's hear it for Costco! (This is just mind-boggling!)

Make sure you read all the way past the list 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 .

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%

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.

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 prices gouging by pharmacies. He found in his investigation that some of these generic drugs were marked up as much as 3,000% or more. 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..

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


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