So, the question maybe this. Which is the point of sale? Is it at the physicians office when pen is put to paper, or is it at the retail Pharmacy when the patient presents the prescription? Brand name manufacturers concentrate on the pen to paper point of sale, generic companies concentrate on the Pharmacy and ignore the physicians. Close 80% of our pharmaceutical expenditures are on Brand name products and 20 % on generic drugs.
Friday, April 17, 2009
Drug pricing confussion
Back in February, Mike Sullivan had an article in Benefits Canada that centered around drug pricing issues in Canada and the wide swings in charges to plans vs the more stable pricing to the public plans here in Canada. Dr. Adam Fein had an article yesterday in his Drug Channels blog discussing pricing concerns in the US. He demonstrates a wide variation in drug pricing. So it appears that both in Canada and the US , consumers must shop around to find the best pricing. However , I really don't know of too many people in my area that do this. Am I wrong? In the first place, the patient or consumer usually has a pharmacy that they frequent and never really question the bill. Here in Canada , I'm not aware of any site which posts comparative pricing for local pharmacies like Dr. Fein references in his article. Most physicians here in Canada are not that aware of drug pricing . So we have a situation where a patient or consumer is diagnosed and given a prescription and neither knows the cost or comparative cost between alternatives. If you are a Senior on the government plan or an employee with coverage, the actual cost may not be important as they just look at how much is out of pocket at that time. In fact I had a recent discussion with a few seniors that said exactly that. They were going to pay the same amount out of pocket if they got a drug for $150 as they would have if they shopped around and got it for $100. Added to this was that the store they frequented offers a reward point system that kept them coming back. So to their point, why would they even care about the cost, they pay the same amount, get reward points, and don't have to worry about anything and the Government picks up the bill. We should learn something about the positive incentives vs using negative incentives to control costs.