Are You On Drugs?!
E-mail chain letters give virtually anybody the ability to become a consumer advocate. People see something on TV (or read about it in an e-mail), get worked up and decide to tell the world about it. Unfortunately, there's a dark side to using such a far-reaching and flawed approach.
On Monday night (July 22), 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! Mr. Wilson did a thorough research, and checked out all the major drugstore chains, discount chains, independent pharmacies, and even checked on some Canadian pharmacies.
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 $100.00 for 100 pills. The pharmacist might tell you that if you get the generic equivalent, they would only cost $80.00, making you think you are "saving" $20.00 What the pharmacist is not telling you is that those 100 generic pills may have only cost him $10.00!
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. They gave the link to Costco, which I will include here, so that you can go and check prices for yourself:
Costco.com Costco Online Pharmacy.
I went to the Costco site and clicked on pharmacy......then I clicked on Pricing Information 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 bought 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. And if anyone has other ideas of how to address this problem, please contact me at email@example.com.
This practice is almost sinful, and just maybe, working together, we can make a difference. Thank you for your time, and thank you in advance for your help.
Just watch the news and you'll get the impression that the pharmaceutical industry is out of control. And you probably wouldn't be too far off the mark. As if sitting through irritating commercials for the likes of Nexium, Lipitor and Rogaine wasn't bad enough, we now learn that we're getting gouged on generic equivalents that are supposed to save us money.
It's true that WXYZ-TV 7 in Detroit, Michigan ran a consumer report on July 22, 2002, in which reporter Steve Wilson discovered a price gap between wholesale and retail prices on generic prescription drugs. He polled Detroit-area pharmacies, both independent and chain stores, and found a large discrepancy in prices. Many other news organization across the nation have run similar stories.
The chain letter above was started the day after the WXYZ report aired by Patty Clegg, a Detroit-area resident who has been fighting cancer for three years without prescription drug insurance coverage. She told Wilson in a September 25, 2002 follow-up report that she felt betrayed by the pharmaceutical industry and decided to tell everyone she knows about what she felt was an outrageous injustice.
But she also found out that in the realm of chain letters, its easy to become a reluctant "expert" on a given subject. Response to her message has been overwhelming and forced her to set her e-mail account to auto-respond to the enormous volume of mail she now gets. Particularly frustrating to her are the scores of people who assume she has more to do with this letter than simply being a concerned consumer trying to spread the word:
"I do not have time to do the leg work for everyone else.... I sent out my original two emails, telling people to "shop around". I do not have the time to find out if there is a store close to the writer or not. I also do not have time to look up drugs for people and to compare prices. I have been asked if the "mail-in" meds providers are also price gouging. I have no idea. Again.... it's up to the individual to check it out for themselves. I am not interested in promoting anyone's business or products that they are trying to sell on the internet..... It really is unbelievable how many emails I receive each and every day. And it is equally unbelievable as to what I am asked to do in some of those emails...
"My sole purpose in starting this campaign is to inform as many people as possible that they must shop around for their generic drugs. But it is up to each individual to do their own homework, and then to help spread the word to as many people as they can."
Is Costco the only store that doesn't add a drastic markup on generic drugs? Not likely. Clegg mentions Target and Wal-Mart as reportedly having similar prices to Costco's. Also, the requirement that Costco sell its drugs to non-members is a state regulation, thus this policy may differ in your area. Also, prescription drug prices vary with the type of drug, time and geography. The pharmacy that has the best price on a certain drug today may not have it tomorrow, or may be one of the most expensive places for other drugs.
The most popular version of this chain letter is significantly changed from Clegg's original, adding to the confusion. Sections have been deleted - particularly those that contained the links to the TV articles that substantiated her claims - and comments of varying validity have been added by anonymous forwarders. A second letter Clegg sent out after WXYZ aired its follow-up has failed to find as broad an audience as her first mailing, which is unfortunate, as it clears up a lot of the more questionable claims in the original. Click here to read Clegg's unaltered original text, as well as her follow-up comments.
Further, in June, 2004, a newer version of this one surfaced, adding to a very abbreviated version of Clegg's message a "chart" supposedly demonstrating markups in the tens-of-thousands percent range on popular drugs:
The women who wrote this email and signed below are Federal Budget Analysts in Washington, D.C.
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 State 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
Claritin 10 mg
Keflex 250 mg
Lipitor 20 mg
Norvasec 10 mg
Paxil 20 mg
Prevacid 30 mg
Prilosec 20 mg
Prozac 20 mg
Tenormin 50 mg
Vasotec 10 mg
Xanax 1 mg
Zestril 20 mg
Zithromax 600 mg
Zocor 40 mg
Zoloft 50 mg
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 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, Sam's Club and other discount volume stores consistently charged little over their cost for the generic drugs. I went to the the discount store's website, 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, Comparing, 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 another discount store for $28.08. I would like to mention, that although these are 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
This new version claims this data comes from "Federal Budget Analysts," but Sharon Davis , one of the women named in the chain letter, told BreakTheChain.org that she and Ms. Palmer have nothing to do with this message other than having "made the mistake of forwarding another version of this information to a few people." In other words, this is another case of False Attribution Syndrome. According to Davis, "someone along the line added the statement implying that we authored and researched this. We are both only concerned citizens like everyone else." Davis implored BreakTheChain.org and our readers to help stop the spread of this misinformation along with their contact information.
Since the authorship of this additional information is unknown, so is its veracity. It's also unclear exactly what what the author of this additional information was trying to prove. Active ingredients are traditionally a small portion of a product's price. Research & development and marketing costs are usually the biggest contributors to price, especially in the case of prescription drugs.
The practice of selling an expensive product at near-cost then making up for it by putting a sizable markup on a cheaper related item is not unusual. An example of this "loss-leadership" is the practice of computer retailers selling systems at, near or below cost, then charging huge markups on accessories, such as cables, disks, etc. Similarly, makers of inkjet printers often sell their products at a loss and make up for it with greatly padded prices on ink cartridges. It's a widely used practice and keeps consumers' overall costs low while helping the company make a profit.
Unfortunately, when applied to the pharmaceutical industry, the practice appears remarkably unfair, since the people who have to make up the price difference are often the people who can least afford it (the poor, the uninsured, the elderly and the chronically ill). But Gary Panek, manager of Ohio's Golden Buckeye Prescription Drug Savings Program, a state-run discount program for seniors, explained to BreakTheChain.org that pharmaceutical manufacturers are very picky about pricing on their name-brand medicines and often allow pharmacies little room for profit. So pharmacists make up for it by exploiting the much larger profit margin on generics.
You'd be hard-pressed to find someone (besides a pharmacist) who feels this practice by pharmacies is fair. But will forwarding this chain letter help educate the public about this problem? Judging from Clegg's and Davis' experiences and the number of people who have asked me about it, I'd have to say no. Most people recognize that e-mail is not a reliable medium and that everything in this message is suspect, at best.
If you want to make a difference, do something real, don't just forward an unreliable chain letter. Be an active consumer and shop around for the best prices. Ask your pharmacist if they do something similar. Best yet, write your congressmen and request they look into the legality of this process and consider passing legislation to stop it. Break this chain.
References: Detroit Action News Investigations (July 22, 2002)