Tackling the Mystery of How Much It Costs

You go to a restaurant, peruse the menu, take your waiter’s suggestions, and order a meal. But there is something odd: the menu has no prices and you have no idea what you will be required to pay until a few weeks later when the bill arrives in the mail.

That, it turns out, is analogous to what goes on in health care, where fees are hidden at the time of service. Making matters even worse, patients often are seeking care when they are frightened and vulnerable, in no position to ask about prices or haggle.

How much sexual innuendo can an advertiser pack into 15 seconds?

Pfizer has always straddled a line marketing Viagra, insisting that the drug treats a serious medical condition, impotence, and deserves insurance coverage, while promoting the drug with wink-and-a-nod ads that have irritated regulators. In 2004, the Food and Drug Administration told the company to stop running ads that included the lines, “Remember that guy who used to be called ‘Wild Thing’? The guy who wanted to spend the entire honeymoon indoors?”
The ads come as Viagra is losing market share to other impotence drugs. Last year, Pfizer’s Viagra sales totaled $1.7 billion, including $800 million in the United States.

The Case for Another Drug War, Against Pharmaceutical Marketers’ Dirty Tactics

Our Daily Meds begins by illustrating the established drug-company practices that have led to this sorry juncture. There is the rigging of studies, so that to be deemed “effective” a drug need only perform better than a sugar pill. There are the promotional strategies that evade the need for F.D.A. warnings by, say, planting logos for the sexual enhancement drug Viagra and the antidepressant Wellbutrin on Nascar vehicles. There is the co-option of doctors and university researchers by aggressive, payola-dispensing drug company representatives. . . . But she moves to weightier matters in assessing the directions in which heavy drug dependence is leading Americans. First of all there are the business strategies that have created illnesses out of what used to be facts of life, labeled them as syndromes, and have hooked customers into long-term use of medication to cure them. . . . Second, there are the economics of creating chronic consumers for marginally necessary drugs. . . . Irate as she is that in a period (1980-2003) when Americans doubled what they spent on cars they increased their spending on prescription drugs by 17 times, Ms. Petersen steps back to consider the long-term consequences of this shift in consumption. She notes that the first generation of children raised in front of ubiquitous, sunny drug-company advertisements (which became legal in 1997) has acquired the notions that prescription pills fix everything, and that they are less dangerous than street drugs. Then, looking to the elderly, she points out that increasing numbers of drugs are accumulating in these patients, with little regard for the consequences.

Cutting Dosage of Costly Drug Spurs a Debate

When a drug can cost more than $300,000 a year, the right dose becomes a matter of public debate. The drug in question, Cerezyme, is used to treat a rare inherited enzyme deficiency called Gaucher disease. Some experts say that for most patients, as little as one-fourth the standard top dose would work, saving the health care system more than $200,000 a year per Gaucher patient. “It is economic malpractice to give a much higher dose of an expensive drug than is required,” said Dr. Ernest Beutler, an authority on Gaucher disease at the Scripps Research Institute. Some other Gaucher specialists argue otherwise, saying that skimping on the medicine could endanger patients. . . . [C]ritics say the company’s development costs were minimal, because the early work on the treatment was done by the National Institutes of Health, which gave Genzyme a contract to manufacture it. And analysts estimate the current cost of manufacturing the drug to be only about 10 percent of its price.

Price Variations for Generic Drugs

Wolf began snooping around and found that two chains, Costco and Sam’s Club, sold generics at prices far, far below the other chains. Even once you factor in the cost of buying a membership at Costco and Sam’s Club, the price differences were astounding.

[Note to Class: Will you refer your clients to Sam's Club? Do you have any ethical concerns about supporting companies like Walmart? Poke around this website and explore some of the interesting stories, and, if you have the time, read this book.]