High mark-ups on prices of generic drugs-Truth!

High mark-ups on prices of generic drugs-Truth!

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The Mark-up by Some Local Pharmacies on Generic Drugs is Steep-Truth!

Summary of eRumor:

A television reporter in Detroit investigated the costs of generic drugs.  He accused some pharmacies of price-gouging, with mark ups of as much at 3,000 percent.  Generic drugs cost less than name brands of the same medications, but the reporter says the lower price may still represent a high mark-up.  He also found that Costco prices were consistently more reasonable

The Truth:

There seems to have been a rash of TV reports on this subject in various cities.

The report in Detroit was in July, 2002 by Steve Wilson of channel 7, the ABC affiliate.
He went from store to store to check on prices of a drug that cost the pharmacy $2.
Prices ranged up to $100.
He says the blood pressure medication Vasotec can cost about $76 per month.
The generic version often sells for $60.
But he says it costs the pharmacy less than $6.
One pharmacist admitted that the mark-up was “unconscionable.”
Wilson reports that the widly-used drug Prozac sells for about $100 per month in Detroit.
The generic version sells for only $10 or so less, but costs the pharmacy only $2.16 or less.
He found that the prices at Costco were consistently cheaper.

In Florida, the same investigation was conducted by WFTV channel 9’s reporter Barbara West in October, 2002.
She too found high mark-ups on generic drugs.
Prozac was selling for 3,000 to 5,000 percent profit.
She compared that with if a grocer who bought an orange for 20-cents would sell it at the same mark-up, the orange would cost $10.
She quotes a spokesperson for Walgreens as saying that the pharmacies don’t make much profit on the brand name drugs and need to charge higher profit on the generics, which they can do while still giving the consumer a better deal than the brand name price.
She also found that Costco consistently had the best prices with mark-ups between 86 and 423 percent, not 3,000 to 5,000.

Philadelphia’s KYW-TV did the same story in November, 2002.
KYW’s consumer specialist Paul Moriarty says Rite Aid, Walgreens, Eckerd, and CVS all declined to be interviewed about high mark-ups on generic drugs.
He too found that Enalapril, the generic version of Vasotec, selling for $60 at Walgreens and $68 at Eckerd Drugs, even though it costs them about $5, a 1,300 percent mark up.
He, too, found Costco to be the cheapest with a cost for Enalapril, for example, of $12.97.
He also found lower prices at Wal-Mart and K-Mart, but not as low as Costco.

A 3/11/03 article by Wall Street Journal reporter Francesco Fiondella reflected some of the same findings.
That article found prices for generic Prozac ranged from $2 per pill at various pharmacies around New York to 15 cents at, once again, Costco.