Drug price disparity: Where to buy?

INDIANAPOLIS (WISH) - You shop for the best price on gas and on your home. What about your prescription drugs? Most don't because they believe generic drugs mean cheaper or that you only have to pay your standard co-pay with your insurance, right? Wrong.

An I-Team 8 investigation is uncovering what big drug companies and some pharmacies don't want you to know.

Amy Peak is a pharmacist and director of Drug Information Services and Academic Advising. She says even on the generics there is such a "huge, huge" difference on pricing. So huge, I-Team 8 launched an investigation to uncover a rare behind the scenes look inside the drug pricing of a multi-billion dollar industry.

"Just because you are getting generic doesn't mean you are getting a good deal,” Peak says.

 

GENERIC VS. GENERIC

I-Team 8 compared drug prices by calling different pharmacies but also through the Red Book, the source known only to insiders of wholesale prices. Drugs are distributed through wholesalers to pharmacies, and then to you.

For example, the generic version of Lamisil, used for toe fungus and often not covered by insurance, has a cost difference that was alarming. Big differences between the same drug at different pharmacies.

One of the generic drugs cost $36 and the same product was $1,300 at a different pharmacy.

"The individual wholesalers make different contracts, deals with different companies. It depends on who they make the best deal with," says Bill Shinkle, who does the buying for Low Cost Rx, a locally owned pharmacy.

That's why he shops around among the wholesalers before he buys. As an independent, the savings is passed to the customer.

"All of our prices are based off of cost and then we go from there,” Shinkle says.

For instance, since he can buy the same Lamisil generic for $5.29, he'll sell it for $11.59.

 

3 WAYS TO SAVE

Shinkle showed us what few see: the real cost pharmacies pay. So how do you save? First, shop around for prescription drug prices. Even with insurance co-pays, we've all had to pay out of pocket for some medicines. Where you pay — big or small pharmacy — could save you hundreds.

For an anti-depression medicine Bupropion HCI, the cost can be five times higher just a few blocks away at another pharmacy. In one place it’s $21 and the exact same prescription cost $124 nearby.

"There is no rhyme or reason," Shinkle said.

Five times higher is just what the pharmacy pays. You'll pay even more.

Secondly, Our I-Team 8 investigation found the idea of “the bigger the chain, the bigger the savings” is not necessarily true. Take for example John Battiato, a retired Indianapolis firefighter on a budget. He depends on low cost generic prescriptions from an independent pharmacy.

"I can't remember the last time I paid full price," Battiato says.

He is taking 11 different generics each month covered by insurance.

So, we did some checking. At the same independent pharmacy with no insurance, he would pay $552. But the same generic drugs at three chains cost more than $200 more at each one. We found them for $698, $778 and $787. That's $2,400 more a year. It matters where you buy.

Over and over I-Team 8 found the small, locally-owned pharmacies were cheaper. For Divalproex, used for seizures and migraines, the chain pharmacy charged $106.97. The local independent in Bloomington charged only $21.09. In one year, you would save over $1,030.56.

"I truly do not have a good explanation as to why there would be that obscene of a difference in price,” Peak says.

And third, investigate "savings plans." Some big box store pharmacies offer discount programs but Peak says, "You have to make that money up somewhere." The $4 list is for limited prescriptions, not all.

"Often places with the largest $4 lists have the largest mark ups as well on other products not on that list — especially on generics not cheap enough to be on the $4 list,” Peak explains.

 

CHEAPER=EXPENSIVE

Incredibly, the cheaper the generic is to make, Peak says, the more you could pay.

"When it is a relatively inexpensive product to make and there are many generic manufacturers, you will see vast, vast differences," Peak explains.

Remember the generic Lamisil? For the same generic we uncovered a price difference of more than $1,200.

HOW?

So, how and why does it happen? For example, the cancer patient who doesn't have a choice and can be charged hundreds of dollars for a drug that cost $10 — how can they mark it up so much?

"There are really no laws or requirements that indicate what the mark up can be. It is a free market just like when you buy a car,” Peak says.

Free market or extra influence? The drug industry spends millions lobbying lawmakers to battle drug pricing restraints.

"I don't think there is any industry more effective other than big oil in terms of lobbying our politicians. So, the pharmaceutical industry impact on what happens in healthcare is truly huge,” Peak says.

To find an independent pharmacy in Indiana, click here.

 

BIG CHAIN

Big chain pharmacies can offer some generic drugs at cheaper prices because of their buying power. However, when told of our findings most told I-Team 8 how they price drugs is privileged information.

 

BY THE NUMBERS

Here's a look at the prices 24-Hour News 8 found at various pharmacies for several drugs.

Drug	Qty.	Local pharmacy	Chain A	Big box A	Chain B	Big box B	Chain C	Big box C	Chain D
Pantoprazole 40mg (GERD)	90	$25.75	$296.99	$129.19	$308.89	$230.32	$133.89	N/A	N/A
Omeprazole 20mg (GERD)	90	$19	$204.99	$147.30	$206.89	$123.08	$89.59	N/A	N/A
Tamoxifen 10mg (BRCA)	90	$20.49	$74.99	$54.72	$102.79	$13.52	$13.50	N/A	N/A
Donepezil 10mg (dementia)	90	$10	$671.99	$246.17	$659.89	$213.36	$588.69	N/A	N/A
Divalproex 125mg	30	N/A	$32.39	N/A	N/A	$76.46	$23.09	$33.99	$34.97
Divalproex 250mg	30	N/A	$55.59	N/A	N/A	$45.84	$33.89	$55.99	$60.97
Divalproex 500mg	30	$21.09	$94.59	N/A	N/A	$56.68	$51.09	$58.99	$106.97
Lovastatin 20mg	30	$58.39	$30.49	approx $30	N/A	$4	$4	$4	$26.09
Lovastatin 40mg	30	$101.11	$49.59	approx $50	N/A	$25.46	$29.59	$33.49	$54.29