The true cost of medicines

[undergroundpanther]

It would be a mistake not to read this and pass it on - From Bec



Pass it on...Make sure you read all the way past the list of the drugs

The woman who wrote this and signed below, Sharon Davis, is a Budget Analyst out
of Federal Offices in Washington, D.C.

Did you ever wonder how much it costs a drug company for the active ingredient
in prescription nedications? 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.

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%
------------------------------------------------------

Norvasec 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$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 I knew
should know about this.

Please read the following and pass it on.

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 carry
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. (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 email, and send it to everyone you know with an email address.

Sharon L. Davis
Budget Analyst
U.S. Department of Commerce

[MercutioATC]

1. What does it cost to take a drug from development through FDA approval?

Billions, in some cases.

This article completely overlooks that little fact.

[Dogmudgeon]

3. Billions?

What drug ever took billions of dollars to bring to market?

There was another little fact overlooked -- that huge amounts of tax money are used for drug development. They also enjoy patent protection and will soon enjoy immunity from lawsuits.

Yet another little fact -- the drug companies are making enormous profits.

--p!

[Spangle]

4. Donations

Don't forget the Millions of $$ that is donated for research by companys and individuals.

[MercutioATC]

6. Yes, billions.

"According to a study by Bain & Co., the cost for a single new drug averages $1.7 billion" (and that's in 2003 dollars)


http://pubs.acs.org/cen/topstory/8150/8150notw5.html

[Dogmudgeon]

12. That's something to think about

Thanks for the link. I also looked around on Bain & Co.'s website, but couldn't find the study; I'll have to look again when I have more time to dedicate to it.

I had been used to thinking that the cost of development was around $100 million. I recall hearing that number being quoted (in scientists' and physicians' complaints) when I was working at the University of Pennsylvania, but that was in the late 1980s.

The ACS story also quotes a Tufts study that is widely accepted, which uses the fugure of $897M. Even that figure is mind-boggling.

I do strongly suspect, though, that a lot of this is the same kind of healthcare inflation that has given us $10 acetaminophen (paracetamol) tablets, $95 disposable plastic oxygen tubing/canula sets, and $250 CPAP masks for sleep apnea with poorer quality manufacture than the prizes a child would expect to find in a cereal box.

I guess everybody wants a piece of the healthcare bonanza.

--p!

[MercutioATC]

14. Agreed, it's a high-end number that takes marketing into account.

It IS a lot of money, though...

I really had no idea until I looked into it.

[jbnow]

5. Obviously the article wasn't quoting

the whole cost, just the cost of ingredients. I haven't heard of billions as the cost but it can be hundreds of millions.

But that doesn't make the article misleading in what it does state. The drug companies have a profit-to-revenue ratio that is the highest margin of any industry in the nation by far. The average is over 4 times the amount of other fortune 500 companies . (The recent oil price surge gives them some competition as does software)

As expensive as research and development may be it doesn't come close to what they pay for marketing, advertising, and administration. The major companies make more in profits then they spend on research and development, some more then twice as much.

A study by Health Reform Program at Boston University in October 03 estimates the Medicare drug plan will increase profits by 17 billion per year. Over 60 cents of each medicare dollar will go to drug companies as added profit.
That law forbid any reduced prices such as any other insurance plan gets for drugs and forbid people using insurance for the part medicare doesn't pay, because again that would be a negotiated lower price.

They really are as bad as the article insinuates even with the "little fact" they leave out.

[MercutioATC]

7. But development cost IS an "ingredient".

I'm not arguing that drugh aren't overpriced. I'm arguing over deceptive claims.

If you developed a wonder drug that cost $1.00 in materials to produce, but cost $2B to develop, it it really fair to claim that the drug only "costs" $1.00 to make?

[jbnow]

16. It is not an ingredient

It is a cost.

If I pay my sister to fly in and develop some delicious recipes to help me use my blueberries and she writes out a recipe for the blueberry tarts she made her ticket and fee is not in the list of active ingredients.

While the subject line does say "The true cost of medicines" the article is clear that it is simply about the "Cost of general active ingredients".

[MercutioATC]

18. You're telling me this is an informative article, not an inflammatory one?

The purpose of the article is clearly to imply that drugs cost so little to make yet we pay so much for them.

Again, it's entitled "The true cost of drugs", not "The ingredient cost of drugs". What's listed is not the "true" cost.

It's like saying that we overpay for cars because there's only about $900 worth of steel and glass in a car and billing $900 as the TRUE cost of a car.

It's misleading and inflammatory.

[area51]

15. "expensive as research and development"

I've heard drug cos. cite this, but doesn't our govt. subsidize at least some of the drug development? If true, we're getting reamed out the ass twice for drugs, b/c some of the dev. costs come out of our tax dollars, & yet we have to pay out the wazoo at the pharmacy counter.

[rman]

8. Which would be why US drugs sell cheaper in Canada then in the US?

[MercutioATC]

9. No, it's because drug companies can get more for them here...

As I said, I'm not saying that I don't think we pay too much for drugs.

I just hate extremist, misleading chain e-mails like this.

[rman]

10. I hate misleading extremist Free Trade Agreements,

and apologists thereof.

The relevance of pointing out the price differences in the US and Canada is that US drugs companies presumably do make a profit selling drugs at low prices to Canadian retailers -who in turn make a profit selling those drugs at prices lower then what they go for in the US. So those same drugs could be sold in the US for far lower prices then they are being sold for, and the drugs companies would still make a profit.

[MercutioATC]

11. But that's not what this thread is about...

It's entitled "The true cost of medicines" and conveniently fails to mention the largest cost, development.

That's what I was responding to.

[elehhhhna]

2. More . The new cancer drug Campath is priced as follows:

The new cancer drug Campath is priced as follows:

United States: $2,400

France: $760

Sweden $660

Britain $570

Italy $500

[Rainscents]

13. Hell yea, now I know why I go to Costco to my prescriptions!!!

[KitchenWitch]

17. What you need to be aware of:

Prescription drugs are a loss leader for the pharmacies. They make more profit on merchandise they sell on the front end (you know, the schlocky giftware, the health and beauty aids and other stuff) than they do on the actual prescriptions. Many times, because of third party reimbursement, the pharmacy is making only between 25 cents and $1.50 per prescription dispensed. Most pharmacies dispense about 500 prescriptions a day, so their revenue for the prescription is around $500 per day. That revenue does not cover the salaries of the pharmacy staff that is dispensing said prescriptions.