Zurik: The kind of drug prices that make people sick

Zurik: The kind of drug prices that make people sick

Since 1998, the pharmaceutical industry has spent more money lobbying Congress than any other, more than utilities, oil and gas, business associations and insurance. Some critics think that money has paid off - Big Pharma's profits have soared.

NEW ORLEANS (WVUE) - So have their prices.

"Can hardly afford them, even with insurance," a woman tells us on Facebook.

"It is really a shame how the drug company has gone up on medicine," says another. "I have paid $144."

Social media stories chronicle the real-life impacts of rising drug prices. Louisianans are feeling it in their bank account, feeling it whenever they go to the pharmacy.

"I had to stop one of my meds when the copay got to $425 a month," another consumer tells us.

"There's no other industry like it," says Steve Miller, M.D., chief medical officer of Express Scripts – a mail order pharmacy and the largest pharmacy benefits management firm in the country.

According to the Express Scripts, the pharmaceutical industry has increased drug prices 100 percent over the last five years.  On average, drug prices have doubled.

"That means all of us are funding the profitability of the pharmaceutical companies," Miller says.

Express Scripts says, while the U.S. makes up just 4.6 percent of the world's population, it accounts for 33 percent of the world's drug spending.

"I think the biggest loser is actually the consumer because, remember, we all pay for this," Miller tells us.  "We pay for it not only in our copays but in our premium costs.  And so patients are having to choose between drugs and rent, drugs and food.  And that's not an acceptable alternative."

And we feel the impact right here in Louisiana.

"They can charge what they want," says one of our sources, a New Orleans-area pharmacist who asked to remain anonymous. "Simply graft. It's the ultimate greed."

That pharmacist showed us real documents that spell out the rising cost of drugs.

"The system is completely broken," he warns.

In 18 months, Amitriptyline HCl, a drug to fight depression, increased from $4.40 to $108.59. That's a 2,367-percent increase.  In the same time period, a steroid cream called Protosol HC went from $14.25 to $67.03. And the price for potassium chloride, a treatment for low potassium levels, inflated from $22.89 to $121.49.

"We need to ask ourselves how high can these costs go," says Jeff Drozda, CEO of the Louisiana Association of Health Plans.

According to LAHP, Louisianans feel the rising costs every time you pay an insurance premium or copay.

In 2009, for every dollar you spent on your insurance premium, 16 cents when to prescription drug costs. And last year, that 16 cents shot up to 24.  To look at it another way: For the first time ever, insurance costs paying for drugs outweigh costs paid to doctors for physician services.

"Even in a free market atmosphere that we have here in the United States, there has to be some sort of controls or questions on why does it cost so much.," Drozda says.

Documents given to us show Proctozone HC, another steroid cream, surged in price from $7.66 to $67.89.  It's just another example of a drug company increasing costs.


"What they tell us is that there's tremendous costs in research and development," Drozda tells us.

But that may not all be true.

Take the drug company Novartis, based in Switzerland. We have three examples that show Novartis drug prices increased more than 100 percent - the high blood pressure medicine Diovan, for instance, shot up from $369 to $832.

Pharmaceutical companies spend money on research to develop new drugs; many blame that investment for rising costs. But consider the documents that show, during the same period of time of Diovan's 125-percent price increase, Novartis decreased its R&D expenses by almost 7 percent.

By the way, Novartis' net profit skyrocketed 95 percent, to $17.7 billion .

"The system is rigged against the patient," says U.S. Senator Bill Cassidy of Louisiana, who says patients are getting hammered by rising drug prices.

Another example: The fungal topical ketoconazole's patent has expired. Yet the drug price shot up in price last year 184 percent.

Cassidy says that makes no sense, "unless somebody's decided to maximize their profit at the expense of both the taxpayer and the patient," Cassidy says.  "And that is wrong… There are drugs which clearly are way past their patent.  The research has already been done and their price is rising substantially every year."

Documents given to FOX 8 News show the diabetes drug Glumetza increased from $11.83 a pill to $106.56.  Online, we found the same drug in multiple Canadian pharmacies for $2.19.

Another medication, the antibiotic Tobradex, costs about $143 in the U.S., but just $33 in Canada.

"We pay for the innovation," Cassidy tells us. "Everybody knows that. That cost of innovation should be shared."

But there's more. Consider the high list price for the topical Alcortin A, a medication for fever blisters - $3,300.

"This is just a beautiful example of… just the sheer lunacy of drug pricing overall," our source tells us.

This local pharmacist calls the ingredients for Alcortin A simple. "I could probably make this for, if I had to guess, between 10 and 12 bucks from scratch," he says.

But he can't legally do that, because Alcortin A is commercially available.

Novum Pharma disputes our pharmacist's cost claims, and told FOX 8:

1. The ingredient costs to produce Alcortin A or an equivalent compound are significantly higher than the amounts cited by the pharmacist;

That doesn't explain the document we obtained, clearly showing that a patient had to pay, out of pocket, $3,300 for the topical.

"It's absurd," the source tells us.

Another example: Duexis is basically part ibuprofen, part Pepcid.  Pharmacists have documents that show it costs about $18 a tablet.  But they say it can be duplicated for next to nothing with over-the-counter medication, costing as little as 20 cents a tablet.

"It doesn't make any rhyme nor reason," our source says.

He says the drug companies cannot justify such high pricing by pointing to R&D costs. "Ibuprofen has been around forever," he says.  "Pepcid has been around forever. They both lost their patents since they've been around so long."

The manufacturer, Horizon Pharma, told us:

The cost referenced in your inquiry is the wholesale acquisition cost or WAC and is not reflective of the cost to patients.  Horizon Pharma's philosophy is to ensure commercially insured patients get the proprietary, clinically differentiated medicines, such as DUEXIS, their doctors prescribe at the lowest possible out-of-pocket cost.  We offer a range of support services, co-pay assistance and access to our medicines for free or at a savings.  As a result of these support services, 98 percent of all commercially-insured DUEXIS patients pay $10 or less out of pocket.  In addition, through our programs we have provided more than $1 billion in patient support in 2015.

But recall what the experts say: If you're not paying for these high drug costs in copays, you likely are in premiums.

And by the way, we have a document that shows someone paying not $10, but $50, for a supply of Duexis.

State Representative Greg Cromer of Slidell introduced a bill this session that would allow doctors to know the prices of drugs when they write a prescription.  But a legislative source tells FOX 8 that the pharmaceutical industry pressured lawmakers, and Cromer pulled the bill.

The price hike examples are endless. The medication Vusion, for instance, treats diaper rash. It's made from three simple ingredients.

Our pharmacy source tells us, "Our cost on this diaper rash is $513.33.  We could make this for probably three or four dollars."

Nystatin and triamcinolone cream, another antifungal, costs $135. But the pharmacist says he could make it with over-the-counter medications for $11.

"It makes no sense whatsoever," he says.

Sandoz, which sells nystatin and triamcinolone, responded to our source's claim:

To bring a medicine down to its individual raw material costs in isolation won't get you to where you can provide FDA-approved high-quality medicines that work for patients. The cost of the Active Pharmaceutical Ingredient drives price, as well as plant overhead, labor, equipment, clinical studies, regulatory approvals, quality control testing and distribution.

The drug Cialis is offered in three different strengths: 5 milligrams, 10 milligrams and 20 milligrams.  The 10 mg and 20 mg pills cost almost $1,200 a bottle, but the 5 mg is much cheaper at $224.

So if your doctor prescribed 10 milligrams, you could buy a bottle for $1,200 - or simply take two of the 5-mg pills and save $747.

"The reason why is that the 5 mg Cialis is intended to be used on a daily basis," the pharmacist says.  "Well, they know no one's going to pay $1,200 a month for it - but they might be willing to pay 250 bucks a month for it."

These big price hikes sparked anger and frustration on our Facebook wall.

"My copay was $110 for 90 days and now over it's $650 for the same prescription," says one commenter, talking about a drug that she could have bought in Canada for less than $200.

Here at home, the cost of prescription meds keeps going up and up and up.

"This isn't inflation," Miller of Express Scripts says.  "Remember, inflation is when the ingredient costs, transportation costs, people costs go up.  But we've been living in a flat inflationary time."

Drugs can save people's lives, and everyone in this story agrees the pharmaceutical industry does good work.

Nonetheless, Miller says, "We need the pharmaceutical companies to show good judgment… This is often just price gouging."

Another viewer told us, "I went to the pharmacy and my son's eye drops rose to $150. I didn't buy it."

And then another viewer wrote, "I have been off my meds. Used to be $125 a month, now its $1,375."

That's right - too much money for a medication designed to treat mental health problems.

"It drives me crazy as a pharmacist," our source says, "but it also drives me even crazier as a human being and as a taxpayer, and as a person that needs healthcare for himself and his family."

We reached out to the Pharmaceutical Research and Manufacturers of America; they did not respond to our requests for an interview. PhRMA did send a statement, though, a day after this report originally aired:

Unfortunately, as your story points out, too often patients struggle with affordable access to their medicines at the pharmacy. We have seen a rapid rise in the number of health plans with high deductibles for medicines – doubling in the last three years. Patients with coinsurance or large deductibles that apply to medicines often face out-of-pocket costs at the pharmacy that are difficult to afford. High cost sharing can be particularly challenging for patients who rely on medicines because they can be turned away at the pharmacy if they can't afford their care. Patient assistance programs sponsored by America's biopharmaceutical research companies are one option to help patients maintain access to needed medicines if they are uninsured or underinsured.

The drug prices referenced in this story are what pharmacists say they paid for the medicine.  The prices can vary some pharmacy to pharmacy, and in most cases that list price is not the price you'll pay. But again, experts say the rising costs are impacting your premiums and copays.


Mobile users can find an interactive slideshow published with this report at this link.

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