Americans Pay The Highest Medication Prices
by Gary W. Lawson, Ph.D., DPA

Reposted April 09, 2016. Disclaimer   The information presented here is for informative and educational purposes only and is not intended as curative or prescriptive advice.

Alert: The original article that was posted prior to 2010 has been taken down. However, researcher Sorochan was able to save it in its original format.

This article illustrates the disregard that the drug industry has had serving the American people. The political revolution taking place in 2015 - 2016 presidential election may sensitize enough people to bring about change to the drug - health care industry!

Despite on-going drug industry hype, lies, misrepresentations and exaggerations which claim that the newest medication is better than what is already available, the fact is that brand name drug companies rarely, if ever, produce a new, safe, “breakthrough” medication that actually works better than what already exists.  The drug companies tell Americans that they spend $800 million on R&D for every new medication that receives FDA approval.  Let it be known that any drug company representative who tells this $800 million dollar distortion of reality needs to start taking medications to make their imaginary voices go away.

For every medication that receives FDA approval, drug companies spend only a few pennies on the dollar for research, but they spend billions and billions on drug representatives, public relations, executive salaries, marketing, lobbying, advertising, packaging and promotions. Make no mistake, the brand name drug industry is not in the business to help people, nor are they in the business to make "real" medicines that have "real" value to "real" human beings.   The brand name pharmaceutical industry clearly has just one goal, one mission, one purpose, and one agenda… do whatever it takes to make higher profits.

Compared to the average American product or service with 100% markup, many brand name medicines have more than a 1,000% markup and some pills are marked up by more than 300,000%. In comparison to most other major businesses that earn on average 4.4% profits, many brand name pharmaceutical manufacturers are averaging in excess of 18% profits. 

Table 1 - Partial list of the pharmaceutical manufacturers price mark up for popular medicines sold in the U.S. after the costs of paying for the active ingredients.

Brand Name
Medication

Consumer Price
(for 100 tabs/caps).

Cost of Generic Active Ingredient (for 100 tabs/caps)

Percent Markup

Celebrex 100 mg

$130.27

$.0.60

21,712%

Claritin 10 mg

$215.17

$0.71

30,306%

Keflex 250 mg

$157.39

$1.88

8,372%

Lipitor 20 mg.

$272.37

$5.80

4,696%

Norvasc 10 mg

$188.29

$0.14

134,493%

Paxil 20 mg

$220.27

$7.60

2,898%

Prevacid 30 mg

$344.77

$1.01

34, 136%

Prilosec 20 mg

$360.97

$0.52

69,417%

Prozac 20 mg

$247.47

$0.11

224,973%

Tenormin 50 mg

104.47

$0.13

80,362%

Vasotec 10 mg

$102.37

$0.20

51,185%

Xanax 1 mg

$136.79

$0.024

569,958%

Zestril 20 mg

$89.89

$3.20

2,809%

Zithromax 600 mg

$1,482.19

$18.78

7,892%

Zocor 40 mg

$350.27

$8.63

4,059%

Zoloft 50 mg

$206.87

$1.75

11,821%

Source. Faloon, William, The FDA vs. The American Consumer, Life Extension Magazine; Oct 2002.

Table 2 – Profit Comparison Fortune 500 Industries

 

1990 Profit

1995 Profit

2000 Profit

U.S. RX Manufacturers

11.8%

14.2%

18.3%

All Industry

4.1%

4.5%

4.5%

Median profit as a percentage of revenue.  Source: Public Citizen update of Stephen Schondelmeyer calculation.  Competition and Pricing Issues In the Pharmaceutical Market, PRIME Institute, University of Minnesota, based on data found in Fortune magazine, 1958 to 1999; Fortune Magazine, April 17, 2003.

Table 3 - Comparative prices of drugs purchased in the U.S., Europe and Canada

Drug

#

U.S.

Europe (% Savings)

Canada  (% Savings)

Augmentin 500 mg

12

$55.00

$ 8.75    (84%)

$12.00  (78%)

Cipro   500 mg

20

$87.99

$40.75   (54%)

$53.55  (39%)

Claritin  10 mg

30

$89.00

$18.75   (79%)

$37.50  (57%)

Coumadin 5 mg

100

$64.88

$15.80   (76%)

$24.94  (61%)

Glucophage  850 mg

100

$124.65

$22.00   (82%)

$26.47  (78%)

Norvasc 10 mg

30

$67.00

$33.00   (51%)

$46.27  (31%)

Paxil   20 mg

30

$83.29

$49.00   (41%)

$44.35  (46%)

Pravachol  10 mg.

28

$85.60

$29.00   (66%)

$40.00  (53%)

Premarin 0.625 mg

100

$55.42

$ 8.95    (83%)

$22.46  (59%)

Prempro  0.625 mg

28

$31.09

$ 5.75    (81%)

$14.33  (54%)

Prilosec  20 mg

30

$112.00

$49.25   (56%)

$59.00  (42%)

Prozac  20 mg

20

$91.08

$18.50   (80%)

$20.91  (77%)

Synthroid  0.1 mg

100

$33.93

$ 8.50    (75%)

$13.22  (61%)

Zestril  20 mg

28

$40.49

$20.00   (50%)

$20.44  (50%)

Zocor  10 mg

28

$123.43

$28.00   (77%)

$45.49  (63%)

Zoloft  100 mg

30

$114.56

$52.50   (54%)

$47.40  (59%)

Source. Faloon, William, The FDA vs. The American Consumer, Life Extension Magazine; Oct 2002.

Modern day drug industry robber barons are receiving unbelievably large and ever increasing levels of compensation.  These ill gotten gains are taken at the the expense of millions of American seniors on fixed incomes who literally are forced to choose between paying for their medications and buying food. The medication prices paid by Americans are on average 50% higher than prices paid by people in other industrialized nations.  U.S. prices of medications are increasing at twice the rate of physicians and hospitals. Unlike all other government purchased products and services, Washington politicians have made it illegal for government entities to negotiate with drug companies to get lower medication prices. Brand name pharmaceutical manufacturers have one of the lowest corporate tax rates of any other industry, and contrary to industry propaganda, in the last ten years the industry has been significantly decreasing the numbers of new breakthrough medications in favor of producing more profitable me-too medications (i.e. medications that are similar to medications already available).

The pharmaceutical companies use millions of dollars in advertising to create inappropriate consumer demand for products that are often more costly, more deadly and less effective than existing medications already available.  Brand name pharmaceutical companies build their fortunes on the backs of the poor, the elderly, the sick and the disabled.  Their riches continue to increase exponentially as they are determined to make more money simply for the sake of making more money.  Overall profits of all Fortune 500 companies declined 53% in 2001.The same year, the top ten pharmaceutical manufacturers increased profits by 32%. Fortune Magazine reported that the drug industry’s 18.5 percent profits led all U.S. industries. 

Pfizer is one of the world’s richest and most profitable companies. As one small example of the company’s unbelievable wealth, in 2003, Pfizer acquired Pharmacia Corporation for $56 billion.

To ensure their continued extremely high profitability, in the second quarter of 2004 Pfizer deliberately cut off supplies to Canadian sources who re-imported lower priced medications to low income U.S. seniors.  After cutting off American seniors' , on July 21, 2004, Reuters News reported that Pfizer, Inc., the world’s largest drug company, posted a second quarter net profit of $2.86 billion.  By forcing and creating an artificial international monopoly specifically based on maintaining higher U.S. prices and gouging Americans, the rich get richer!

There is little hope for change. Unfortunately, there are no more American champions available to ride up on a white horse and save the day.  America's poor, sick, disabled and elderly have been ignored, abandoned and discarded because the pharmaceutical manufacturers have paid off most of the Washington politicians and top level FDA bureaucrats to stand by and do nothing. It is a sad day in American history.

Source: Lawson Gary W., "Americans Pay The Highest Medication Prices,"   Lawson: Drug industry profits