9/24/2005

Pharmacies Pocket Savings from Generic Drugs - BreakTheChain.org

it's fake, but the content is true! Only the listed sender (Sharon Davis) is not correct. Steve Wilson of the WXYZ-TV news did in fact do this report,
The phone number for Sharon L. Davis, is really for Oleta Finch, Secretary to the Director of the OFFICE OF EXECUTIVE BUDGETING (U.S. Gov) [which] has nothing to do with prescription drugs.. The phone number for Mary Palmer is probably fake (it's disconnected)..

The chain letter [below] was started the day after the WXYZ report aired by Patty Clegg, a Detroit-area resident who has been fighting cancer for three years without prescription drug insurance coverage. She told Wilson in a September 25, 2002 follow-up report that she felt betrayed by the pharmaceutical industry and decided to tell everyone she knows about what she felt was an outrageous injustice.

But she also found out that in the realm of chain letters, its easy to become a reluctant "expert" on a given subject..

The most popular version of this chain letter is significantly changed from Clegg's original, adding to the confusion. Sections have been deleted - particularly those that contained the links to the TV articles that substantiated her claims - and comments of varying validity have been added by anonymous forwarders...

in June, 2004, a newer version of this one surfaced, adding to a very abbreviated version of Clegg's message a "chart" supposedly demonstrating markups in the tens-of-thousands percent range on popular drugs..

SAMPLE CHAIN LETTER TEXT

The women who wrote this email and signed below are Federal Budget Analysts in Washington, D.C.

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.

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

Since the cost of prescription drugs is so outrageous, I thought everyone I knew should know about this. Please read the following and pass it on. It pays to shop around. This helps to solve the mystery as to why they can afford to put a Walgreen's on every corner.

On Monday night, Steve Wilson, an investigative reporter for Channel 7 News in Detroit, did a story on generic drug price gouging by pharmacies... At the end of the report, one of the anchors asked Mr. Wilson whether or not there were any pharmacies that did not adhere to this practice, and he said that Costco.. charged little over their cost for the generic drugs...

I am asking each of you to please help me by copying this letter, and passing it into your own email, and send it to everyone you know with an email address.

Sharon L. Davis
Budget Analyst
U.S. Department of Commerce


This new version claims this data comes from "Federal Budget Analysts," but Sharon Davis , one of the women named in the chain letter, told BreakTheChain.org that she and Ms. Palmer have nothing to do with this message other than having "made the mistake of forwarding another version of this information to a few people." In other words, this is another case of False Attribution Syndrome. According to Davis, "someone along the line added the statement implying that we authored and researched this. We are both only concerned citizens like everyone else." Davis implored BreakTheChain.org and our readers to help stop the spread of this misinformation along with their contact information.

Since the authorship of this additional information is unknown, so is its veracity. It's also unclear exactly what what the author of this additional information was trying to prove. Active ingredients are traditionally a small portion of a product's price. Research & development and marketing costs are usually the biggest contributors to price, especially in the case of prescription drugs.

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The practice of selling an expensive product at near-cost then making up for it by putting a sizable markup on a cheaper related item is not unusual. An example of this "loss-leadership" is the practice of computer retailers selling systems at, near or below cost, then charging huge markups on accessories, such as cables, disks, etc. Similarly, makers of inkjet printers often sell their products at a loss and make up for it with greatly padded prices on ink cartridges. It's a widely used practice and keeps consumers' overall costs low while helping the company make a profit.

Unfortunately, when applied to the pharmaceutical industry, the practice appears remarkably unfair, since the people who have to make up the price difference are often the people who can least afford it (the poor, the uninsured, the elderly and the chronically ill). But Gary Panek, manager of Ohio's Golden Buckeye Prescription Drug Savings Program, a state-run discount program for seniors, explained to BreakTheChain.org that pharmaceutical manufacturers are very picky about pricing on their name-brand medicines and often allow pharmacies little room for profit. So pharmacists make up for it by exploiting the much larger profit margin on generics.

You'd be hard-pressed to find someone (besides a pharmacist) who feels this practice by pharmacies is fair. But will forwarding this chain letter help educate the public about this problem?

Pharmacies Pocket Savings from Generic Drugs - BreakTheChain.org

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