Generic Drug Costs Can Be Crazy

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Updated February 8, 2016

Has this happened to you? You go to refill a generic prescription, and the price has jumped by 100%, or even 1,000%. Huge price swings in generics are happening more often, and nobody is sure why.

I got much of this information from Dr. David Belk’s website The True Cost of Healthcare. Dr. Belk also writes frequently on health-care costs for The Huffington Post.

San Francisco Chronicle writer Victoria Colliver picked up on some of these crazy price swings in an article dated January 1, 2014. She found that between November 2012 and November 2013, the price for 100 milligrams (mg) of the antibiotic doxycycline increased by 6,351%.

The price for 25 mg of the antidepressant clomipramine (brand name Anafranil) went up 3,497%. And 12.5 mg of the blood pressure medicine captopril soared by 2,714%.

The bizarre thing is that the price for other doses of the same generic may stay low. So if the price for 150 mg tablets goes crazy, why don’t pharmacies give you two 75-mg tablets or a 300-mg pill and tell you to cut it in half?

They can’t. Dr. Belk says the law requires pharmacies to give people exactly what is prescribed. The only change they can make is to switch a generic for a brand name. He says that if you’re hit with a price spike, you have to go back to your doctor and ask for another dose.

Perhaps the pharmacist can make that call for you. You can also ask for a different medicine in the same class. The price for 150 mg of irbesartan (Avapro) jumped from 15 cents a pill in October 2014 to over $3 a pill in November 2014. But another blood pressure drug, losartan, remains cheap and is in the same class as irbesartan.

“When used as a substitute,” Belk writes, “losartan will have the exact same effect on your blood pressure and no new side effects.”

What causes these price gyrations? Some generics have what is called a “fragile supply chain.” There may be only one or two manufacturers. If something goes wrong with one of them, or they lose access to raw materials for the drugs, supply may collapse and prices soar.

But that doesn’t explain how 75-mg pills can have skyrocketing prices while 100-mg prices stay the same. Dr. Belk compares that to a half gallon of milk selling for $20, while a quart still costs $1.25 and a gallon costs $3.50.

Although such price spikes have happened to glyburide (Micronase and others) in the past, the current list of crazy price jumps does not include any generic diabetes drugs. So that’s one good thing.

You might ask how drug companies can get away with these huge price increases? Well, if you’re paying for your own drugs, you will notice right away and might call your doctor immediately. Or you might not, feeling nothing can be done.

But if your insurance pays, it might be the pharmacist who takes the hit. Pharmacies often contract with insurers in advance for how much they will charge for prescription drugs. If the price of their supply goes up, pharmacies either take the loss or tell you to go to another pharmacy, losing you as a customer.

Either way, the super-high prices can’t last too long. Doctors, pharmacies, and patients find out and gradually change their meds. But that takes time; most doctors and even most pharmacies don’t pay close attention to how much drugs cost. In the meantime, some supplier rakes in big money. The prices seem to snap back into place after a year or so.

Other price madness
Dr. Belk gives many other examples of drug pricing madness in this article.

He notes that 5 ml of ciprofloxacin (an antibiotic eye drop) costs pharmacies $3.79. But 2 ml of ciprofloxacin ear drops cost $47! And 20 mg fluoxetine (Prozac and others) pills cost 16 times as much as the same dose in capsule form. Promethazine (Phenergan and others) suppositories can cost 100 times as much as the same medicine in a pill.

Belk debunks the idea that all these price swings are normal market reactions. I agree. How can there be a fair market when the sellers (doctors, hospitals, drug companies) decide what the customers should buy? That’s crazy. Of course buyers wind up spending too much.

If you’re interested, here is a page containing links to spreadsheets of roughly 5,000 generic and brand name drug prices recently charged to pharmacies. Perhaps this list could help you shop.

Some of the prices are staggering — 20 mg of the antipsychotic Abilify is $30 per pill — while others are wonderfully cheap. Some are both. Five mg of diazepam (generic Valium) costs about 2 cents a pill. But one 2.5-mg dose of diazepam rectal gel costs over $220! I imagine they don’t sell too much of that.

The only advice I can give is that when prices are unexpectedly high, don’t just automatically pay. Check around and see if there are cheaper doses or similar medications. Ask your pharmacist. See if the meds are cheaper at Costco, Walmart, or CVS. Then ask your doctor for a different prescription, if needed.

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