Why U.S. Pharmacies Overcharge

Concerns over prescription drug prices have grown into a big political issue, with nearly one in four Americans saying it's difficult to afford their medications, according to a March 2019 poll by the Kaiser Family Foundation. Pharmacies technically set their own prices for generic drugs, but there are other players involved that complicate the process. Here's how the system works and what customers can do to save money.

Americans are having a tough time paying for medications despite bipartisan efforts to drive down prescription drug prices.

Nearly 1 in 4 Americans say it’s difficult to afford their medications, according to a March 2019 poll by the Kaiser Family Foundation. This comes as pharmacies raked in a record $465 billion from prescriptions.

Lawmakers from both parties support lowering drug prices, but they haven’t had much success regulating the industry. In September 2019, U.S. Rep. Frank Pallone, D-N.J., introduced the Elijah E. Cummings Lower Drug Costs Now Act. The House passed the bill in December 2019, but it died in the Senate.

Former President Donald Trump also made a late-term bid in the fall of 2020 to try to lower drug costs, but the effort faced setbacks in court.

As regulation attempts have faltered, businesses such as GoodRx have tried to fill the gaps in the complicated pricing system. However, experts say non-systemic solutions are a Band-Aid on a bigger problem.

Chapters
0:00 - Introduction
1:16 - Why pharmacies exist
3:50 - How pharmacies make money
8:51 - Regulations
10:55 - How customers can save money

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Why Pharmacies Overcharge

[PanteraRossa]

People forget about Walmart and Costco. I went to refill my dad's heart medicine last month at Walgreen's and since hes recently unemployed and uninsured, they told me it'd be 66 dollars for his 30 day supply! I looked online and saw through the AARP site the prices for his medicine at different stores and when I went to Costco, they gave me 3 months supply of the exact same medication for 9.99.
That is 95% off. Tough to justify this system.

[presidentcamacho]

America's "healthcare" system should be called the wealthcare system.

[FinancialShinanigan]

Politicians need couple months without insurance and see how much their health price increases.

[calalos]

Why don’t they talk about drugs manufactures charging a price many times higher in the Us than anywhere else? It’s not the only the pharmacy system fault, but the manufactúrese overcharging for the drugs.

[willblack]

costs 10 dollars to make and distribute, they sell it at 400 dollars... amazing stuff...

[omgitsfrosty]

At this point I think nearly everything is overcharging in this country.

[kossttamojaan]

"Why U.S. Pharmacies Overcharge" - because they can

[brentcrenshaw]

Dude almost choked when he was lying about PBMs driving costs down.

[johnl.]

Because they have good lobbyists influencing politicians. No reason US should be so much more expensive than other places

[Theo]

CVS is the worst. I’m glad I left them for a local pharmacy that actually cares about me

[pekkoh]

I live in Sweden. Sweden has a single-payer system. We have a $200 per YEAR ceiling on what you pay for drugs. Hospital visits cost $10 per day. Examinations (MRI, CT-scans etc.) while at hospital cost nothing, and if you are not at the hospital may cost up to $40 (and there is a ceiling). Doctor visits $20-40 and there is a ceiling on that as well.

[LouisIreland]

The American healthcare system is so messed up

[viffer]

I went to the hospital in Malaysia to deal with an upset stomach. This was a fully modern western style facility with western trained doctors. She ran some tests and ended up prescribing some penicillin. The doctor visit cost me $10. The medication around $2, all out of pocket with no insurance. I felt better by the next day. Try that in the U.S.

[darrell_dee]

The governments everywhere else negotiate prices with pharmacies and drug manufactures on behalf of their citizens. Congress in America lets decided it was better to stay out of it and allow the pharmacies and drug manufactures set pricing. In many cases the pharmacies and drug manufactures are supplying the same drug to all countries.

[racvets]

PBMs don’t offer “choices”, they say you can choose where you want to fill your prescription, but if you need 3 refills of it, you have to get it from them, or get no reimbursement…

[acsproule]

Generics are a really interesting thing and someone made a point that pharmaceutical companies were not mentioned. As a pharmacist who has since moved on from retail I saw the up and down prices of generics. Take for example doxycycline. It’s an older antibiotic that in 2009 I could buy a bottle of 500 wholesale for around 10 dollars. In fact one of the supermarket chains had it on their free antibiotic list. Somewhere down the line in manufacturing a “shortage” occurred and overnight the 500 count bottle shot up over 1000 dollars. Instead of multiple people making the generic there was only one and they basically could set the price whatever they wanted. Also I remember not being able to stand that Adam Fein guy since I worked in an independent pharmacy and he made comments on his web site drug channels about how he couldn’t understand while anyone would go to an independent instead of doing mail order. We have a very broken system and very powerful lobbies that keep it that way. The pharmaceutical and pbm lobbies are extremely powerful. Those two groups are so intermingled with their “discounts” to prefer one drug over another it’s ridiculous and take in so much money from those discounts.

[ScaredDonut]

crazy how buying a membership at Costco would still be cheaper than most of the stores.

[GamerbyDesign]

LOL yes we don't think this is a conflict of interest because it benefita us.

[stalin]

This is the reason many patients are coming for treatment in india

[zacboyles]

“We need an intermediary who doesn’t have a conflict”
Lol, need to join the rest of the world and trim that fat.