Monday, 26 March 2007
Generic Drugs Not As Cheap As Expected
Generic drugs are often lauded as a way to make healthcare more affordable. But in some instances, the savings they offer is minimal. A recent Wall Street Journal article highlights the shortcomings of generics.
Large insurance companies have been successful in getting cheap generics for their members. But people who pay cash for their prescriptions may not have as much luck.
“We're not seeing that sharp a drop-off” in generic drug prices, according to Jim Yocum of the pharmacy data and software company DestinationRx Inc. “We're just not seeing it.”
The price paid for generic drugs often depends on where they are bought.
For example: on the website for national pharmacy chain CVS, 30 tablets of 20-milligram Zocor was selling for $154.99. The same dose of the generic version, simvastatin, was selling $108.99. By contrast, at the large warehouse retailer Sam’s Club, 30 tablets of 20-milligram simvastatin cost just $6.97.
Pharmacy representatives pointed out that they operate on different business models than large warehouse retailers such as Sam’s Club and Costco.
“We don't sell snow tires,” CVS spokesman Mike DeAngelis. “The core of our business is the pharmacy.”
Mr. DeAngelis did confirm that CVS makes a higher profit margin on generic drugs than on brand-name drugs.
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