Price gouging with combination drugs

 Doctors often prescribe drugs that are a combination of two drugs. This makes it convenient for the patient. But the cost of the combo drug is ridiculously higher than the cost of the two drugs sold separately. Here are examples: Zegerid, a drug for acid reflux, costs $86.29 per pill, while the generic components, omeprazole, which you can buy off the shelf, and sodium bicarbonate (baking soda) cost 47 cents. Vimovo, an arthritis drug, costs $2,482 for a 60-pill bottle. It is a combination of Aleve ($14.00) and Nexium ($24.00). Fosamax Plus D, has a list price of $39.05 per pill, while the generic components, Alendronate and vitamin D3 cost $1.25.

When prescribing such drugs, doctors often don’t know the high cost of such drugs. As one doctor notes, “As a physician, I often don’t know what the medications that I prescribe cost. And then when a patient goes to pick it up at the pharmacy, they only see what their copay is.” Another doctor, writing in The New England Journal of Medicine gets it. A family member asked him to pick up Onexton, an acne medicine, from the pharmacy. The pharmacy was going to charge him $800. Instead, he bought the ingredients separately for about $20. The same doctor helped an uninsured patient save money on blood pressure medicine. Instead of paying $90 for Hyzaar DS, he prescribed the drug’s components, bringing the price down to $6.00.  

While insured people usually dole out a small co-pay for such drugs, Medicare shells out $925 million more for these combination drugs than they would pay for their generic components (2016 figures). As one cost economist says of the drug companies, “Their business model essentially involves gouging insurers and health plans, which ultimately costs consumers.”

For an introduction to this blog, see I Just Say No; for a list of blog topics, click the Topics tab.