15 March 2007

What's the word...

...oh yeah, that's it, UNCONSCIONABLE.

Have a look at this post on the Freakonomics Blog regarding the markup on generic drugs at pharmacies compared to the price at Costco and Sam's Club. Here's the meat of it:

Even once you factor in the cost of buying a membership at Costco and Sam’s Club, the price differences were astounding. Here are the prices he found at Houston stores for 90 tablets of generic Prozac:

Walgreens: $117

Eckerd: $115

CVS: $115

Sam’s Club: $15

Costco: $12

Those aren’t typos. Walgreens charges $117 for a bottle of the same pills for which Costco charges $12.

Now, I'm all for the market deciding the price of goods in most cases. If someone is willing to pay $20 for a pound of bananas, by all means someone should sell them at that price. However, drugs are not bananas and high prices encourage non-compliance with doctors' orders, thereby putting patients at considerable risk. Furthermore, as the author of the post notes, one explanation for this is that elderly people, the largest consumers of prescription medications, are most likely to continue shopping at the corner pharmacy rather than shop around for a better deal. As the blog author says, "Talk about information asymmetry; talk about price discrimination."

This is a very clear example of "Just because you can, doesn't mean that you should."

Found originally on Boing Boing.

1 comment:

  1. unfrozencavemandad3:16 AM

    Yes it is unconscionable, but even more so is the practice of big pharma sending nearly/expired prescription drugs to poor countries and disaster sites to take the write-off on the P&L statement. In the US, without price controls on prescription drugs or any form of nationalized health care, no medical insurance for 25% of the population, and partial prescription coverage for those who do have insurance, it is truly "buyer beware". I was just going over a recent insurance statement of ours and found that a prescription for which we pay $35 out of pocket, the insurance company's list price shown was $325! And this is from the only prescription supplier our insurance policy allows, a mail order firm which is allegedaly the lowest price.

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