The Value is Falling!!!!!

It’s been recently reported in the NYTimes and by the AARP that drug prices have suddenly increased by as much as 9% on average since the beginning of the year. The increase is such a turnaround in trends that the pharmaceutical industry’s largest market surveillance organization had to re-issue its guidance for the year. This is while more and more drugs are being ADDED to the generic formularies, and retailers are implementing competing programs to WalMart’s $4.00 generic extravaganza. I was pleased to find my local Hannaford Brothers Pharmacy not only with a cheap generic program, but offering a list of oral antibiotics that are now FREE! We know that nothing is free so I dug further.

And, I wasn’t surprised when I randomly took one family member’s prescription to the test to see what I could find in pharmaceutical value.  The news may not be surprising to to the NYTimes, but let me just confirm for all of you value-conscious shoppers, it is becoming a “shell game”…even with the alleged transparency on pricing. Where is the value going?

The sample prescription is Accutane, a popular brand medicine for the treatment of acne. Anyone with a teenager might know this one. It comes in several generics, and is typically expensive they tell me because of the safety and compliance rules surrounding its use. The patient must agree to monthly blood tests, take a monthly on-line pledge screening and show their special membership card to prove they remain in compliance. Only then can the patient get the prescription. I’ll pay for that safety, because it is part of the value of what I get.  But what has changed recently to influence the price of that?

The retail price in the last 4 months has gone from $294.99 to $650.01 for a typical 30-day supply and the generic has gone from $222.78 to $412.21 for the same. That’s a whopping 200% increase!!! Wow!

I asked the pharmacists what was going on and they said that “prices were now changing daily, faster than they had ever seen”. So much so I found  that Web sites that once posted prices, now have the typical insurance company disclaimer that “prices are valid only at the time of dispensing, and subject to change”. One pharmacy chain is having so many people question the prices in their Healthy Saver Plus program that they won’t tell you the price until the drug is dispensed! Are we going backwards with pharmaceutical transparency and value?

I checked my trusty Canadian pharmacy and the Accutane brand was one half the US price and the generic was 40% of the US cost. Same products, same manufacturers delivered to my door via the U.S. Postal Service, now that is value!

I am not the only one who thought it was curious that the Pharmaceutical lobby was so quite on the new pharmaceutical industry tax imposed as part of the legislation moving through the House. I also thought it was interesting that the conditions the pharmaceutical industry would be placed under for price negotiations under health reform were also surprisingly without discord. So, the Secretary in her infinite wisdom is going to get the best price from the pharmaceutical industry? Right!

The pharmaceutical industry is shooting itself in the foot with this kind of behavior. It has recently echoed around Washington that “there are few statesmen when it comes to health reform”, and this is just one more example of how value is falling in healthcare. Shame on the pharmaceutical industry for being so callous, you are anything but statesmen, maybe our only real hope is WalMart.

John Morrow