The price of drugs comes from a perverse system and what you as a patient pay is equally perverse. Let’s consider a few examples.
Older people often develop actinic keratosis on their scalp as a result of years of ultraviolet rays from the sun. They can progress to skin cancer so it is good to treat them. A dermatologist can remove them with liquid nitrogen or the individual can apply a prescription drug that kills the cells in the AKs. The drug most commonly used for decades is an anticancer drug – 5-flurouracil or 5-FU. Applied topically it can be very effective. 5-FU was developed before I went to medical school which is now 50 years ago. It is obviously off patent and not difficult to manufacture. But the branded topical called Efudex costs about $300 retail. Wow! There is a generic but it is also expensive, albeit at half the price of about $150. It is a large tube and will last a long time but it is a lot of money none the less. It is not a high volume drug and there are only two manufacturers so the competition is minimal enough to keep the price high. And even with the generic, there is a large middleman profit between what the manufacturer sells it for and what the pharmacy ultimately charges you (or your insurer.)
Staying with dermatoligic issues, rosacea can be cosmetically bothersome with redness, papules, acne-like pustules on the face and coarsening of the nose (rhinophyma.) Its cause is unknown and there is no really good treatment. One approach has been to use an antibiotic called doxycycline taken orally in the usual “antibiotic” dose of 100mg. It seems to have an anti-inflammatory effect rather than an antibiotic effect in the skin and often can clear the face. It is a very inexpensive capsule at about 30 cents each. But it can also have an adverse effect on the bacteria in the gut and possibly lead to overgrowth of yeasts. A new approach is a 40mg capsule branded as Oracea which is both regular doxycycline and a sustained release form so that the blood level stays low and relatively constant over the day; perhaps it will have less likelihood of adverse problems. It has been tested and found to be reasonably effective for rosacea and hence approved for market by the FDA. But it is on patent and costs about $10 per dose or $300 per month– a drug that the patient will probably have to take forever to keep their face clear. That adds up – fast. Instead one might consider using the standard 100mg doxycycline but only for a few days whenever a flare-up begins. Low cost and limited side effects, if any.
Steroid creams are commonly used for rashes. I was once given a prescription for betamethasone for a small rash. Why betamethasone rather than over the counter hydrocortisone? “It is stronger and will work faster,” said my doctor. But, since I had a high deductible insurance policy, I had to pay the entire bill which proved to be a remarkable $67. An over the counter tube of hydrocortisone at the same pharmacy, enough to last a whole family for years and years, costs only $1.98. Sometimes it pays to accept a slower cure.
Let’s say you need an acid suppressor for reflux esophagitis [acid reflux or GERD.] There are multiple drugs called proton pump inhibitors on the market, some off patent and now over the counter and others still on patent and only available by prescription. They are all effective. The differences among them are minimal. Your doctor could tell you to go to the grocery store and pickup Prilosec for about $30 for a month’s supply. Or, he or she could give you a prescription for Nexium. It would cost about $150 for a two week supply. But your insurance will pay for it except for your co-pay of, say, $15. So your doctor will probably suggest Nexium since it will cost you less. But the overall system is paying out a huge amount more than necessary. What a perverse system.
If you are the one paying for the drug because you have a high deductible plan or no plan at all then you start to ask questions. Sometimes you can find a generic equivalent like the fluorouracil example but sometimes the generic is still expensive. That is you might start to look elsewhere.
What about buying drugs from Canada? Same drug but at a better price. I checked PharmacyChecker.com and found the topical fluorouracil branded Efudex for $75 including $10 for shipping. That is a lot better than the generic price here of about $150 and way better than Efudex at about $300. For the doxycycline, using the same web checker, I found a 50mg dosage (albeit not sustained release) that costs about $17 per month. Oracea 40 mg capsules can be found in Canada for about $2.00 each if you buy more than 50 at a time. Both are quite a difference from $3600 for a year’s supply. Nexium can be found for about $1.00 a pill, way less than in the United States but it is just as easy to go to the local grocery store and buy Prilosec for much less still. As for betamethasone, it is $25 with a $10 shipping fee. A lot less but over the counter hydrocortisone is still only $1.98!
But buyer beware. We have a very carefully monitored market in the United States through the FDA. We benefit greatly from its regulations and its careful scrutiny of each new drug before it can be marketed. IN the United States, the drug can be traced from the manufacturer to the distributor to the pharmacy to you so you can be certain it is the real thing. And companies that manufacture overseas must follow the same stringent requirements as in the USA in order to sell here. The FDA’s concern is not to protect the drug companies profit from competition but to protect us (you and me) from the unscrupulous. The concern is that the drug bought from Canada (or elsewhere) may not actually be the drug it is said to be. Witness the highly expensive drug Avastin used to treat certain cancers. A counterfeit was somehow entered onto distribution in the USA from somewhere else- except that it was not Avastin. It was not a drug at all. A lot of unsuspecting doctors and patients were duped. So it behooves us to carefully balance the pros and the cons.
Why does it cost less in Canada or other countries for the same drug? Because the other countries tell the drug company that it can only sell the drug at a set upper price limit. If that limit is still within the pharmaceutical manufacturer’s marginal cost per unit of drug, then they will agree and sell at that level. In America, we are effectively paying for the entire R&D cost of bringing a new medication to market along with the company’s marketing cost and still giving it a huge profit potential. Rather than import the drug from Canada, we should just expect the company to sell here for the same price as there. But they do not have to and so they do not. Right now, Americans effectively pay for the R&D costs of new drugs while others get a discount because their governments insist. So should ours. It would bring the price down and negate the need to look to Canada or elsewhere.
How to do that without imposing price controls or getting the government into further regulatory policies. I wrote in the Future of Health Care Delivery that the federal government should simply say that it (through it drug purchases via Medicare, Medicaid, the military and Veterans Administration) will only buy medications from drug companies that sell it for the same price here as overseas. The drug company still can sets whatever price it wants but since the government buys at least half of the drugs sold in the USA, it should have an impact and quickly.