57% markup to blend two pills into one
Every year during this time, we help Medicare Beneficiaries review their Part D Drug Plans to ensure they have the most cost-effective Part D coverage for the following year.
We save about $2 Million per year for our clients by just finding the most cost-effective Part D Drug Plans. You can read more about our Part D review process here.
In reviewing thousands of client's drug lists each year, we also uncover some of the seemingly unscrupulous Pricing Strategies of Pharmaceutical companies.
A few years ago, we wrote an article about a specific dosage of Metformin (1000mg XR) which costs 1,000 times more than if you just take two pills of the 500mg XR. That's right, the retail cost was about $7,000 per month versus about $7/month for the 500mg of the same exact medication.
This year, I would like to highlight another very common issue we see with Pharmaceutical pricing: Drug Manufacturers taking two less expensive pills, blending them into one pill and charging a huge markup on the price of the medication.
The example I saw today was for "Pioglitazone/Metformin 15mg/850mg". I was reviewing a Part D analysis for one of our clients and noticed that the only Part D Plans that covered this medication were the higher premium Part D Plans (about $75/month vs about $10-$15/month that most people pay for Part D Premiums). With some further digging on GoodRx.com, I found that the retail cost for this blended medication is about $260/month.
This got me thinking... how much would it cost to take the Pioglitazone and Metformin separately. It turns out the retail cost for Metformin is about $16/month and Pioglitazone is about $150/month. So, if we simply add up the cost of these two pills, one might think it should cost about $166/month retail cost for the combined medication. Or perhaps, a slight markup for the convenience of taking one pill instead of two pills.
But no... there is a 57% markup to get the combined pill of Pioglitazone/Metformin 15mg/850mg which has a retail cost of ~$260/month.
Let that sink in.
What other industry can we add such little value (take 1 pill instead of 2 pills) and justify a 57% price markup? This is one of the key reasons the Diabetic Medicine industry is approaching $100 Billion per year.
So, when I hear about Pharmaceutical companies justifying their pricing strategies to account for R&D expenses to "innovate" and create new life-saving treatments, it makes me question if these types of R&D discussions include innovations like blending two pills into one.
11/18/2022 09:45:04 am
We just had a similar issue today with PIoglitazone + Glimeperide. The retail cost is about $5,000 per year for the combined medication versus about $100 per year if they are taken separately. Just amazing.
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