Thursday, September 5, 2013

Right between the eyes with drug prices

Following cataract surgery there's a lengthy list of prescription eye drops you have to use that will gradually help clear up your vision but whose cost might leave you cross-eyed. There's the Vigamox, Prednisolone and the Fluorometholone but the whopper is Nevanac eye drops, 1.0 ml solution, manufactured by Alcon Laboratories, Inc. of Fort Worth.

The price of Nevanac at a Walgreens in San Antonio, Texas was $445.99. That is the actual cost of the drops, not some imaginary sticker price.

That's no typo, either: Four hundred forty-five dollars and ninety-nine cents, for a three-milliliter dispenser a little bit smaller than my thumb, for a twenty-two-day supply. After Stew's cataract surgery, the doctor prescribed two additional refills, so the total cost for Nevanac alone—just one of six different eye drops he was told to use—comes to $1,337.97. Stew's Medicare Part D drug insurance covers about half the cost of Nevanac, so his total out-of-pocket comes to approximately $668.98.

Authentic tears from the Virgin couldn't cost this much. 
Now it gets interesting. When Stew went to get a refill for Nevanac at Costco in Queretaro, Mexico, where no prescription is required, the cost was $301.00 Mexican pesos—or $24.08 U.S. dollars—for a five milliliter bottle, compared to a three milliliter bottle in San Antonio.

If you figure it on a per-unit basis, a milliliter of Nevanac in the U.S. sells for $148.66 dollars while in Mexico it goes for $4.81 dollars. That is for the identical medication, manufactured by Alcon in the U.S., except for the larger bottle and the fact that here it's sold through a Mexican distributor.

In other words, Nevanac, one of a number of medications you must take after cataract surgery, costs nearly 3,100 percent more in the U.S. than in Mexico.

If you figure that Alcon still makes a profit on the Nevanac sold in Mexico, the price difference is staggering. Half the markup is paid by Part D Medicare Supplemental Insurance, which costs about $18 a month, and the other half by the patient, in this case a guy named Stew. If Stew did not have that supplemental coverage he would have to pay the entire cost for this and any other prescription drugs.

One likely explanation for this price discrepancy is that Mexico—like most countries in the world—imposes strict price controls on drugs, whereas in the U.S. the Medicare system has been explicitly prohibited from negotiating prices with pharmaceutical companies. In effect, prescription drug prices are whatever the pharmaceutical companies say they are and that's it. This sweetest of all sweetheart deals was part of the Medicare drug benefit law devised by the Bush Administration and approved by Congress in 2003, and which went into effect in 2006.

The result is that, for example, the cholesterol-lowering drug Lipitor cost $124 a month in the U.S. and only $6 in New Zealand. And on and on, from Celebrex to Cymbalta and most other prescription drugs.

Oddly, not all U.S.-made prescription drugs are cheaper in Mexico. From our personal experience, the over-the-counter prices of Ambien, Lipitor and Cymbalta are almost exactly the same in Mexico as in the U.S.

The price differential for Nevanac, however, has to be one for the record books, no matter how you look at it, particularly through cataract-free eyes.

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