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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11 comments:

  1. About 14 years ago when my daughter was recovering from leukemia and had no insurance because her employer terminated upon finding out she had cancer.........I went to Walgreen's to get a prescription for 3 pills. I nearly fainted at the counter when it was over $1500USD~~ Imagine my disgust when I found out those three same pills in Mexico were under $200USD. I don't remember the exact amount anymore. This happened over and over as we attempted to get meds in Mexico rather then the USA! And then people wonder where all the companies such as Walgreen's and CVS etc. open so many stores on a yearly basis on the most prime property in each city........believe me, its not only the pharmaceutical firms that are making money. A very touchy subject for me. I'm so sorry Stew got caught in that Catch 22.

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  2. Yet another reason to live in Mexico -- as if we needed any!

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    1. Medical care in Mexico cuts both ways, we've found. One surgeon here botched up a routine carpal tunnel surgery and left Stew's right hand pretty screwed up. Another told him he needed arthroscopic surgery on one knee, and a doctor in San Antonio, as a second opinion, took a bunch of X-rays and said there was nothing wrong with the knee except the beginning of arthritis. A completely bungled diagnosis by the guy here that could have led to unnecessary surgery. Also, some prescription drugs are cheaper in Mexico but--in our experience--most are priced pretty much the same. So I wouldn't generalize except to say if one of us needed surgery we'd probably go to the U.S. (fully cognizant that surgeries can go wrong in the U.S. too!)

      al

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  3. In the USA, it really pays to shop around. The cash (not paid by insurance) price varies ENORMOUSLY by pharmacy. How do I know this? In my past professional life, I was responsible for my firm's investments in retailers. When Wal*Mart decided to start offering certain generics for $5 USD, drugstore stocks (CVS, WAG, RAD) tanked. But I learned that the state of Florida requires drugstores to post their cash prices online so people can shop around. So I went to this site to find out how competitive Wal*Mart's prices were. I was SHOCKED at my findings. The very same generic drug could be sold for over $100 at one pharmacy, and a couple miles away, another would sell it for $14.99. Apparently hardly anyone shops around (even in Florida where the government has made it easy).

    So for those of you shopping in the USA for drugs, SHOP AROUND and call Costco too, even if you're not a member. Membership is only $50, and it might be worth it for you to join, even if you only ever buy one prescription.

    Saludos,

    Kim G
    Boston, MA
    Where we've always thought the US government simply needed to declare that it would automatically get the best price a drug company has offered to any other purchaser, including foreign governments.

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    1. Kim: That is an excellent, excellent point we hadn't thought about. You get trained like a dog to go to Walgreens and nowhere else, not thinking the stuff could be cheaper at Walmart or Costco. Thanks.

      BTW, who is "gringo suelto"?

      al

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    2. Well, I'm "gringo suelto," or at least my blog is. Check it out.

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  4. Have to agree with Jennifer (she IS very wise).
    "Yet another reason to live in Mexico -- as if we needed any!"

    The absurdity of it all - three bottles of that stuff could get you a nice two weeks in Puerto Escondido AND the eye drops to boot ;-)

    Man I HATE those 'tests' required to leave a post here - surely there is a better way.

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    1. Yeah, and even after you've entered your Wordpress ID (in my case) you STILL have to do the "test."

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  5. fred@yorkstephens.comSeptember 7, 2013 at 8:05 PM

    Trying to see if I can comment.

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    1. Well Fred, apparently you can. What did you want to say?

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  6. Another example of this insanity is the cost of scorpion anti-venom in Arizona. It's about $100 a dose in Mexico and in fact is manufactured in Mexico--and shipped to the United States.

    But the cost in Arizona is in the five digit range PER DOSE. It's totally absurd, nuts, immoral, and just plain stupid.

    Don't know if this link will work, but here's an article about it:

    http://www.azcentral.com/arizonarepublic/business/articles/20120920arizona-hospital-cuts-scorpion-antivenom-price-80-percent.html

    Then there's the bias in the USA for any medication you purchase in Mexico. Everybody from doctors to dentists to veterinarians are skeptical and act like you're doing something akin to drinking poison or snake oil if you trust the very same medication you purchase in the states in Mexico.

    Our veterinarian refused to give us a current vaccination record for our dogs unless we RE-vacinated them in Arizona--even though we had current records for them from our time in San Miguel de Allende. One of our dogs has immune system issues and it took more than a year to get her normalized again after having what amounted to a double dose of all her vaccinations.

    Ah well...gotta love it. Your eye drop example is pretty incredible all by itself.

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