How much do you drugs REALLY COST the mfg?

[napi21]

http://www.anxiety-and-depression-solutions.com/articles/conventional/pharmaceutical/realdrugcosts.php

Did you ever wonder how much it costs a drug company for the active ingredient in prescription medications? Some people think it must cost a lot, since many drugs sell for more than $2.00 per tablet. We did a search of offshore chemical synthesizers that supply the active ingredients found in drugs approved by the FDA. As we have revealed in past issues of Life Extension, a significant percentage of drugs sold in the United State contain active ingredients made in other countries. In our independent investigation of how much profit drug companies really make, we obtained the actual price of active ingredients used in some of the most popular drugs sold in America.

The chart below speaks for itself.

The profits are truely mindboggeling! I undrstand they only give the cost of the active ingredient & don't include the cost of the fillers & overhead, but DAMN!

Check out the results posted at the link.

I am listening to Dr. Dean Edell on the radio & some caller asked because when he asked his pharmicist he said he couldn't tell him. Dr. Edell said it's probably available on the internet, so I decided to check.

[Statistical]

1. Ignoring R&D is kinda silly.

I mean it isn't like God handed down the formulas on a pair of clay tablets.

By the same logic software companies make 99.9999% profit. Printing a DVD costs maybe 2 pennies, and rest of packaging maybe another nickle. $60 to $2000 software vs $0.07 "cost".

[dipsydoodle]

6. ditto

.

[area51]

8. Doesn't the govt. give drug cos. some of our tax dollars?

If so, drug cos. are double-dipping by getting tax dollars for R&D and then turning around and charging us much more then they charge other countries which actually have health care as a basic human right.

[Igel]

25. Some.

But not all for any given drug, and not much at all for some drugs.

The entire discussion hinges on what "fair" is without anybody ever defining "fair" rigorously enough to cover all and only practices that s/he actually deems fair.

Such discussions only stand up to analysis after you've gotten into your second bottle of tequila.

[MannyGoldstein]

13. Pharma spends twice as much on sales and marketing vs. R&D

e.g., http://www.sciencedaily.com/releases/2008/01/080105140107.htm

[Statistical]

23. That doesn't change the fact that to completely ingnore R&D is silly.

Drug companies spend way to much on marketing, and charge to much.
Nobody is disputing that however to pretend the hundreds of billions spent on R&D doesn't need to be amortized is simply not living in reality.

[FormerDittoHead]

15. Once that's covered, then the stats are pretty much correct, right?

Mainstream pharma still charges $2 a pill for many drugs which have gone generic.

I know this because some doctors, for their own reasons, prescribe the non-generic, and tell their patients to insist upon the manufacturer's brand. This is happening in my own family. My father in law jumps though hoops / travels to certain drugs stores to avoid the generics for reasons which, I don't believe, are very scientific. Chemically, they are identical.

I totally get how R&D should be in the calculation, but here's a question:

How about advertising? Should advertising and promotion be included in a "reasonable/outrageous" profit discussion when pharma spends so much on advertising and promotion when perhaps they shouldn't? (like 20 years ago)

[napi21]

18. Advertising IS included in Overhead when costing out a product.

R&D is usually costed out over a certain period of time. Usually 10 years unless you have some reason to believe the product life (as marketable) is less than that. In the case of ethical drug co's they most likely use the 1- years. The cost of adv. is spread over cost per pill and based on expected sell thru. Remember that pills are made in batches, and a batch of a popular drug would be in the millions per batch. That's one reason why a very rarely used drug always costs so much. It's usually only made in one facility and ALL the overhead & labor must be covered by a batch of a few thousand. My cousin, a transplant patient, must take one drug that's only made in Ireland in ONE facility, and his cost is $10.00 per pill! He has to take 1 per day EVERY DAY. Believe it or not, I doubt there's as much profit built into that pill as there is in Lipitor or one of the other widely used drugs.

[Warpy]

2. Unfortunately, you're not just paying for the chemicals

You're paying for the process that develops the chemicals and does all the testing to get them to market. Once the drug is generic, you're paying for a process that ensures every single pill has exactly the right amount of chemical in it so that it is effective and you're not poisoned. Some dosages are measured in thousandths of a gram, so this is not a negligible thing. You're paying for exhaustive quality control, each batch rigorously tested.

You're also paying at the distribution end, pharmacies needing to stock 500 or more items, all with tight expiration dates, just on the off chance someone will come in and need one cockamamie drug nobody else in town is on. You're paying for the expertise of a pharmacist who looks at what you're on and makes sure you're not allergic to a new drug and that it doesn't interact badly with a drug you're on.

If a drug isn't generic, you're probably paying for a fat direct to patient advertising budget, and that is a part of the cost that should be eliminated. The ethics of that are appalling.

The "stuff" in the pill is the smallest part of the cost of that pill. Drugs are selective poisons and if you don't want to be poisoned, pony up.

[Booster]

3. Then why do the same pills cost half as much in another country?

[Sgent]

5. stratified marketing

they charge the maximum they can get.

That being said, most generics with multiple manufacturers are cheaper here than in many other countries.

[Booster]

7. I have friends in Texas who drive down to Mexico once a year

and get all of their prescriptions filled for the entire year at less than half the cost in the U.S. "stratified marketing" translates to f___king the shit out of the American people.

[Warpy]

10. Other countries set prices

I'm surprised you didn't know this.

[Booster]

22. So you're telling me other countries pay as much for these pills

as the U.S. does then lowers them by more than half? I really don't think so.

[Warpy]

24. No, they do what Wal Mart does

and order enough of them that they can basically dictate what they get them for.

Nice strawman, though.

[Igel]

26. You miss another part of the equation.

If another country stipulates the price they'll pay, of course the US manufacturer doesn't have to abide by it. In some countries the government actually does subsidize the drug--buying it and handing it out for free or buying it and selling it at below-cost. I've been in countries where OTC drugs here are by prescription only, a sort of rationing scheme put in place because they don't make the drug and can't afford to subsidize the volume there's demand for.

In other countries, the drug companies sell below cost (by some reckoning of "cost").

Imagine the headlines: "Pfizer refuses drugs to HIV patients in Africa; refuses to cut prices." It's already hard enough with much more snappy versions of things like "Company stops making money-losing generic sold only in poor countries in favor of devoting manufacturing equipment to profit-producing consumer drugs." The attitude sometimes seems to be that companies should only lose money and never make it.

They make up the difference in revenue by charging higher prices in the US, a sort of "soak the rich" scheme.

[Overseas]

16. Republican Medicare D for Drugs removed the ability to negotiate volume pricing

The GOP gave the pharmaceutical industry that gift. Unlike other countries and the VA, our own Medicare system was not allowed to negotiate for volume discounts.

Part of healthcare reform was trying to restore that important market tool the so-called business savvy Republicans took away from Medicare -- negotiating pricing on volume purchased.

[napi21]

9. I don't dispute what you're saying, HOWEVER.....

Tale :ipitor for example. That drug has been on the market for well over 20 years. At 4,696% profit over the cost of the active ingredient, do you have any idea how many billions of $$ that is over 20 YEARS? I don't calre how much they're paying their researchers, how much their overhead is, or the cost of advertising, THAT is an obscene markup! And yes, I know there are other statin meds out there, but, at least in my case, my husbands Dr. said she wants him to stay on Lipitor. He did try zocor for a few months but she put him back on Lipitor because she said it works better than the generic. He's been taking Lipitor for over 16 years, and he's just one of MILLIONS of patients doing the same thing!

Look, I worked for a vitamin mfg.for 13 years. I worked up the full costs (ingredients, bottle, label, labor, O/H & equipment depreciation) of their products. I KNOW how much profit is built into many products. Even when I worked for them, I felt some of the profit margins were obscene!

[Warpy]

11. You're missing completely how finicky the manufacturing process is

and the rejection rate of drugs that are assayed out as too low or high a dosage per batch. Yes, they recycle the ingredients into the next batch, but the ingredients are not the part of a pill that costs.

It's making sure that pill works without poisoning you.

[napi21]

12. Bellieve it or not, vitamine & supplement pills are under the same

mfg. process criteria as the ethical drug mfg's are. We were always getting surprise visits & test reviews by the FDA. The on;y processes the ethicals have to deal with that we didn't is the mfg. of opiates and heavily restricted substances which of course we never dealt with. All the same testing, formulation, sanitation standards, etc. are the same in both kind of mfg. plants.

[asdjrocky]

4. I've got it down to about 62 dollars an ounce.

Oh wait, you meant drugs that are bad for you, right?

[Overseas]

14. Mark ups of thousands of percentage points for old established medications

Celebrex 100 mg
Consumer price (100 tablets): $130.27
Cost of general active ingredients: $0.60
Percent markup: 21,712%

Claritin 10 mg
Consumer Price (100 tablets): $215.17
Cost of general active ingredients: $0.71
Percent markup: 30,306%

Lipitor 20 mg
Consumer Price (100 tablets): $272.37
Cost of general active ingredients: $5.80
Percent markup: 4,696%

Paxil 20 mg
Consumer price (100 tablets): $220.27
Cost of general active ingredients: $7.60
Percent markup: 2,898%

Prilosec 20 mg
Consumer price (100 tablets): $360.97
Cost of general active ingredients $0.52
Percent markup: 69,417%

Prozac 20 mg
Consumer price (100 tablets) : $247.47
Cost of general active ingredients: $0.11
Percent markup: 224,973%

Xanax 1 mg
Consumer price (100 tablets) : $136.79
Cost of general active ingredients: $0.024
Percent markup: 569,958%

Zoloft 50 mg
Consumer price: $206.87
Cost of general active ingredients: $1.75
Percent markup: 11,821%

[blueamy66]

17. it's no wonder I only pay $2 for 30 generic Xanax

if it only costs .024 each

.72 to make and $2 to me...with BCBS, of course....

at least they're aren't making too much from me....

[stray cat]

19. RESEARCH is expensive as are clinical trials - and most don't pan out

[napi21]

20. Not THAT EXPENSIVE! Check the annual profits of the drug

companies some time. If a co. can cover all those expensive costs and STILL make over a BILLION in profits BOTOM LINE AFTER TAXES, there's more truth to my argument than there is to yours.

[hunter]

21. Let's pay universities to do drug research and release new drugs to the public domain.

Let's buy drug patents and release them to the public domain.

Let's give discoverers of "miracle" drugs huge monetary prizes and international recognition.

All humanity wins, except the deadly and corrupt marketing machines today's pharmaceutical companies have become.

[Liberal Gramma]

28. I really like your idea!

And maybe it would cut down on distributing new drugs with potentially lethal side effects by suppressing the test data. You are right: all humanity wins.

[Cleita]

27. I don't think they cost very much.

They claim it's to cover the research, but the fact is much of the research is not done by the PhRMA companies but universities and other facilities. Also, it's strange that they can sell the same pill to other countries for half and often a third of the price they charge Americans.