Walgreens Rant

[Ed62]

One of my boys had a prescription for medication. He was involved in an accident, and the bottle was broken. More than half the pills were lost. His insurance wouldn't cover refilling the prescription because it hasn't been 30 days since last filled. The cost to refill it would be $40.00. I told him I'd call Costco to get a price. Exactly the same medicine, and the same number of pills was $5.00 from Costco! Walgreens is nothing short of a ripoff!! Rant over.

Ed

[cgallery]

One of my boys had a prescription for medication. He was involved in an accident, and the bottle was broken. More than half the pills were lost. His insurance wouldn't cover refilling the prescription because it hasn't been 30 days since last filled. The cost to refill it would be $40.00. I told him I'd call Costco to get a price. Exactly the same medicine, and the same number of pills was $5.00 from Costco! Walgreens is nothing short of a ripoff!! Rant over.

Ed

Perhaps the drug is on the $5 list that places like Wal-mart and Target (and perhaps Cosco--not sure) have.

In Wisconsin, stores are forbidden from selling at below cost. This to prevent large corporations from driving out smaller mom and pop places, and then raising prices once there is no competition.

So when Target announced it would do a low-cost drug program in Wisconsin, they determined that a few (2-3) of the drugs actually cost more than they planned on selling them. So they raised the price of those drugs a couple of bucks and made them exceptions.

But the overwhelming question the local newspaper missed was, how the heck could these outfits have been selling these drugs for $30 to $40 a refill but now afford to sell them for $5, especially since they are still making a profit?

Competition doesn't work to lower prices when pricing is held in secret (like drugs, hospital fees, etc.).

[MilDoc]

That's one reason I don't shop at Walgreens, or most of the other large national chains. Their prices are generally higher than anyone else.

[moc]

Prescription prices vary widely among retailers. Many assume Walgreens (or whatever big chain is in the area) will be cheaper because of volume but that often isn't true. And the cheapest place for one drug is probably not the cheapest for your other drugs. But who wants to go all over town with multiple prescriptions?

Working with the uninsured, I can sometimes get meds for a patient "at cost" and I'm amazed at how low that cost is compared to retail.

I always think about this pricing when a drug company claims to give away $1M worth of free meds. If it's $1M worth of $60 retail meds that WalMart can still make a profit on at $5 after buying them from the drug wholesaler who made money and the pharmaceutical giant who made money then you can imagine how little those meds are costing the company to give away.

On a related note, you probably don't want any drug that your doc has samples of (unless she/he is giving you a full course). The drug companies don't supply samples of the cheap stuff.

...But don't get me started

*moc

[havighurst]

In Michigan, the state has a website where you can compare prices for the twenty most prescribed drugs at local pharmacies. There is a push to expand the list to more than twenty, but budget issues are hampering this effort. You might want to check to see if your state has something similar. If they don't, a call to your legislator might help start one.

Here is the link to the Michigan website. It is interesting to see the significant price differences for the same medications.

http://www.mdch.state.mi.us/rxapp/

[Jeffrey Schronce]

Wisconsin is promoted as a consumer friendly state. However, they have made a lot of bad decisions that seem consumer friendly and in the end just costs more for the average consumer.

Walgreens. I had surgery 2 months ago. Part of prep was to inject myself with an anti-clotting medication. Walgreen filled the script, but advised me to inject 24 hours AFTER surgery instead of 24 hours BEFORE surgery. A number of issues could have occured. I could have gotten a blood clot that killed or stroked me. I could have taken the shot after surgery and while the hospital was giving me the same medication, thus doubling my dose and causing bleeding issues.
They are never on time with scripts and are just bad to work with in general. We moved all our stuff to Walgreen because of the better hours and the fact that my wifes Medical Savings Account has a debit card. Walgreen and MSA folks have agreement that they don't audit charges to the MSA. If we go to other places we have to submit receipts to show proof of medically qualifying. Still, we are likely changing back to Target Pharmacy. Target and Walmart kick but on pricing for those w/o insurance coverage.
Last, I don't want to start a war or get political, but Mike Moore has a new film out called Sicko. Its an investigation of the health care system including the drug industry. Unlike his prior movies that divide along political lines, this movie gets everyone pissed. The US Government tried to seize the film at the Cann Film Festival this week. This movie is going to make some waves in the next few months!

Edit : Oh, Sicko has a scene where dude cut off 2 fingers with TS! Middle and ring finger. Hospital tells this uninsured gentleman, $60k to reattach middle finger, $12K to reattach ring finger. Being the romantic man that he was he opted for the ring finger only.

[bradley_osu]

I'm sorry for your experience there, I work for a grocery chain pharmacy and I suggest you do what we tell most of our customers who can get things cheaper which is you have to do what's best for you.

The Michael Moore movie is a whole other matter... I don't wish to get started on. But the short of it is it will probably be a sensationalized view of things where he will present a few valid points/observations/truths which will be overshadowed by attacking unsuspecting people and trying to make broad generalizations based on individual extreme cases and weak connections. Then he will call the biased suggested view a documentary of uninfluenced truth. I seriously wonder if the government actually tried hard to get him to not air it or if he made up the fact to get more hype for his movie.

[Jeffrey Schronce]

IMHO, Bradley, you are mostly on track however I see one major error and it is exactly the problem presented by the original poster.

You are correct that brand name X will be reimbursed by the insurance company to the pharmacy at a rate of $46 and the cost is $42. Poor margin. However, someone who does not have insurance will pay $59, a very healthy margin. Your generic example leads to the error IMHO. Generic pricing and reimbursement is pretty much identical to brand name when dealt with on a insurance reimbursement. We both know that an insurance company is not reimbursing the pharmacy $44 for a drug that cost $4. In the case of a drug that cost $4 the pharmacy is likely getting $6 from insurance reimbursement (or charging the customer a $15 generic co-pay and making very nice margin if they are lucky and the customer is that dumb). The problem, as I see it, is that the person who will pay $44 for the $4 cost generic is the uninsured consumer who is most likely the person who can least afford it. But it doesn't just apply to generics. See the brand X example. Its the uninsured who are paying the large margin mark ups. That is unfortunate since it is the generics that bring so much value to the life of consumers, versus brand name designer livestyle drugs. A poor person should be able to get a decent BP medicine at a decent price. I guess the best thing for the industry (margin wise) would be to have a minimum charge per script, say $10 or $15 but as you not Walmart, etc is not going to play that game. As you note, they want you in there to buy other high margin crap.

As far as the problems experienced by the mom and pop pharmacy shops, I don't believe legislation and protective measures are needed. Don't get me wrong, I absolutely hate Walmart and what it has done to local shops, but the fact of the matter is that we are low cost consumers today and that is what is killing the small shops. The small guys should be worried. They must either provide value in being small and local or they will be forced out of business.

I do question wholesale acqusition cost as an arguement for pricing deviations. Yes national retailers get their drugs from distributors cheaper, however it is the large national retailers who have horrid pricing! I am sure Walgreens prescription purchasing power is much greater than Target. However Target is waaaaaay cheaper than Walgreen.

As far as the Micheal Moore it is a whole different matter. You are correct in the way MM writes/produces his films. Sections of F911 were laughable in the far reaching connections. My point with this movie is it is a little different and will not divide into factions as Columbine and F911 did (or at least not as much). I think it will help move medical care in the US to the front line of the national political debates in the elections.
The government is in fact trying to take possession of the film due to civil and criminal violations in obtaining footage of Cubas medical system. It does create great publicity for the movie though . . . and he is pumping it!

[bradley_osu]

Heh, I thought I pulled my long-winded insurance rant off before anyone else noticed But I do have one thing to say with your response.

"We both know that an insurance company is not reimbursing the pharmacy $44 for a drug that cost $4."

They in fact do, I see it every day. (Not always up to $44, but definitely $20-$40. And yes the cash customer will pay $30-$50 on that same medication ) A major reason why both pharmacies and insurance companies are pushing generics is because pharmacies get larger margins and insurance companies are more than willing to pay $44 for the generic instead of $150 for a comparable brand. It's cost savings for them and profitable for us.

"I do question wholesale acqusition cost as an arguement for pricing deviations. Yes national retailers get their drugs from distributors cheaper, however it is the large national retailers who have horrid pricing! I am sure Walgreens prescription purchasing power is much greater than Target. However Target is waaaaaay cheaper than Walgreen."

This goes back to my original point that the $4 drug program is in fact only a way to bring people into their stores to buy other things, which is why the pharmacies that are just pharmacies aren't adhering. Same thing here. It is well known in the world of pharmacy that CVS and Walgreen's have the highest cash prices of anyone. Part of the reason is they don't have other sales to prop up profits. They sell medication, that's about it.

And yes it's sad but in the end the cash customer gets screwed. If there were no insurance coverage you would see drug prices and costs plummeting to more reasonable levels because otherwise sales would also plummet. The only reason a cancer drug costs $30,000-$100,000/year is because there is a third party payer willing to pay for it.

[bradley_osu]

After reading your post again I missed another thing.

"In the case of a drug that cost $4 the pharmacy is likely getting $6 from insurance reimbursement (or charging the customer a $15 generic co-pay and making very nice margin if they are lucky and the customer is that dumb)."

The insurance company is who sets the co-pay, and yes sometimes the co-pay is all the pharmacy gets reimbursed but it is almost always lower than the cash price (not the cost) of the medication. See my above post for why the $6 reimbursement is incorrect.

"I guess the best thing for the industry (margin wise) would be to have a minimum charge per script, say $10 or $15 but as you not Walmart, etc is not going to play that game. As you note, they want you in there to buy other high margin crap."

There in fact is a minimum price for prescriptions at almost every pharmacy (target perhaps being the only exception I know of?). The pharmacy I work at is $10.19, you get 1 hydrochlorothiazide tablet it is $10.19, you get 30 it is $10.19. CVS I believe is a few dollars higher (I only know this because our corporate tries to make sure that we're one of if not the lowest minimum price.) Walmart's, etc. have obviously moved down to $4 though.

You have to remember it's not % margin/prescription that they're worried about. It's overall margin and more importantly overall profits. $10.19 on 30 hydrochlorothiazide (costs about 10 cents) is a HUGE percent markup. But overall dollar made on that prescription is not a lot. If all of your prescriptions were like that then a pharmacy would be fine, but they're not. You get a lot of prescriptions that are high priced and the margin is less than 10% on. So a $500 cost that you get $520 for and a $.30 cost that you get $10.19 on is a total profit of about $30/$500 which is 6%. Not very good.

[Jeffrey Schronce]

I noticed the retraction of the insurance rant after I posted! LOL! Ultimately the whole things is a mess and on that I believe everyone will agree. I guess the uninsured who is paying higher cash retail prices isn't really getting screwed that much since they are not paying $1600 per month in insurance premiums. Cost of self insuring (whether by choice or not). Then of course I am sure you see the Medicaid groups who come in and pay $4 for a brand name, walk out the store and sell the prescription to someone waiting outside. (I worked for Revco, which was bought by CVS when I was in high school). Tax payers pay for the Medicaid folks. Medicare’s entrance into prescription drug coverage caused further complications. Basically, it seems that the average middle class working person is footing the cost of spiraling prescription drug costs through increased taxes, insurance premiums and costs of goods purchased where in employee benefits add to product cost.

[BigguyZ]

I curious as to the drug. I work in the Pharmacutical Benefit Management field, and can tell you what the Average Wholesale Cost of a medication is. I think it may be an issue of there being a difference in the product (i.e. generic vs brand), and/ or the fact that Walmart, Sam's Club, Costco, etc have programs that offer generic medications for a $4 or $5 cost- without insurance. They either have a special deal worked out with the drug companies (probably a rebate system), or they accept the loss in order to bring in foot traffic to their retail stores...

[Ed62]

I think it may be an issue of there being a difference in the product (i.e. generic vs brand

That wasn't the case which prompted this thread. Both were generic.

Ed

[BigguyZ]

That wasn't the case which prompted this thread. Both were generic.

Ed

OK, well even so as I said there are chains that have launched programs that will only charge a few dollars for generic meds- if you have insurance or not. So it may not be a case of Wallgreens overcharging, but of the bigger guys cutting deals with the drug companies or taking the loss to bring in foot traffic. Again, I can tell you what the average wholesale cost of a drug is, but I wouldn't know what exactly each chain has negotiated.

[bradley_osu]

Ah the Medicaid thing, that opens another can of worms I'll leave for less civilized discussion. Again all I can say to Ed is that now that you know that Costco has that program I would go there. Some of their medications might be cheaper than your copay. It sucks but not all companies are setup with the same wholesale agreements or store setup that would allow deep discounting sacrificing pharmacy profits in order to gain store profits. If it's available to you I would definitely take advantage of it while it's there.