Huge Prescription Drug Price Markups
Key Excerpts from Article on Website of WXYZ-TV (Detroit ABC affiliate)
Posted: July 4th, 2009
Generic drugs are just as safe and effective as their brand-name counterparts but they cost only a fraction as much. That is because companies that produce the generic versions simply copy the formula developed by the drugs inventor years before. While your drugstore charges you less for a generic drug than a brand name version, that price difference is nothing compared to the markup most druggists place on the generics. Your pharmacy most likely paid a wholesale price of only pennies for that generic medicine. They then charge you a markup of 3,000%, 4,000%, even 5,000% or more, pocketing most of your savings. Whos paying sky-high prices? People who can least afford to get ripped offthe elderly, the unemployed, and everybody who has to pay for their prescription medicine out of their own pocket. At CVS the cost of generic Prozac is marked up at least 56 times what the drug cost wholesale. It is a 5,594% markup. And in our survey of more than a dozen popular generic drugs, CVS leads the pack with average markups of 1,436% Walgreens is not far behind at 1,341% and Rite Aid markups on generics average 1,183%. [WXYZ reporter] Steve Wilson took the issue to Kurt Proctor, Vice President of the Association of Chain Drug Stores. "Explain to me why its necessary to take an 82 cent product and mark it up to $46.69? You have to mark it up 5,500% to meet your costs to make a profit? This is really about greed, isnt it?" asked Wilson. "Its not about greed," responded Proctor. "Thats not accurate at all. Thats a misleading statement. What I hope you will focus on is making sure people use their medications correctly."
Note: This important exposure of price-gouging by pharmacies is still available at Web Archive (click on the link above for the complete article, which is well worth reading in its entirety), but for some reason has been taken down at WXYZ's website. Could it be someone doesn't want us to know about this?