NEW ORLEANS (WVUE) - The pharmaceutical industry spent almost $231 million on federal lobbying in 2015. That's $632,000 a day, counting weekends. Pharmacists and some in the insurance industry say lobbying has paid off - Congress heretofore has basically turned a blind eye to medication price hikes.
The consumer may see it clearly, though, whenever he or she goes to the pharmacy. And one of the growing concerns among consumers and healthcare analysts alike is the rise in brand name drug prices.
It's a concern that inspired a certain experiment, on a warm New Orleans afternoon - the kind of day when a cup of lemonade might quench a pedestrian's thirst.
We set up a lemonade stand in Lafayette Square and conducted a little taste test… with a twist.
"Is this a joke?" wonders one passerby. "Am I on candid camera?"
"It looks like you used the same jar to pour them both in," another remarks.
It's true – we poured lemonade from the same bottle into two cups. In this experiment, the lemonade is just the same, but the costs are starkly different.
"I think you're trying to trick us in some way," said one of our taste-testers.
We labeled one cup of lemonade as "generic" and priced it at 50 cents. But we priced the second cup, our "branded" lemonade, at $15.
Let us assure you now: We're not getting into the beverage business. But, local pharmacists tell us, pharmaceutical companies engage in this sort of funny business with consumers all the time – charging different prices for essentially the same product.
"It drives me crazy as a pharmacist, 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," says one source who asked not to be identified.
What happens when you break the seals on bottles of, say, the anti-inflammatory drug Celebrex and its generic counterpart? It's probably not a surprise: Generics cost less than brand drugs. In this case, you might pay $82 for a bottle of the generic but $536 for the Celebrex.
But take a closer look at the pills. The markings for the generic pill and the brand-name pill are exactly the same - same numbers, same color, same dimensions, same ingredients, same pill.
Pfizer makes Celebrex, and a company called Greenstone makes the generic. Greenstone happens to be a company owned by Pfizer. More than likely, they're manufactured in the same facility - same pills, made by the same company in the same factory, with a huge difference in price.
By the way, Pfizer's patent on Celebrex has expired.
Another Pfizer product, the anxiety drug Effexor, costs $10.27 a pill; the generic costs just 22 cents. Once again, the Pfizer subsidiary, Greenstone makes the generic drug.
Again, consider the markings: the generic pill comes in a different bottle, but it actually has the brand name, "Effexor", right on it.
"The brand name is in a generic bottle," our pharmacist confirms. "And if you look at the generic bottle it tells you it's made by the brand name company. It's the same exact thing… It's that crazy."
Pfizer told us in a statement:
Look at the malaria drug Plaquenil and its generic - same markings. Again, the generic has the brand name right there on it. The marking on the bottle is different, though - and price is drastically different.
Our source tells us, "It would be like having a Mercedes. When it has a Mercedes emblem on it, you charge a Mercedes price. And then, when you take that Mercedes, sell it in a Kia dealership, the same exact car, same Mercedes logo and everything, you charge a lesser price. It's the same vehicle."
A bottle of the ADHD drug Adderall comes with a $684 price tag; the generic is about half the cost. The pills look the same, and both made by Shire.
"So it turns out that the manufacturer-branded product often is the same manufacturer that makes the generic," says Dr. Steve Miller with the mail-order pharmacy Express Scripts. "And so it's amazing that they can sell the drug at a fraction of the cost when it's called generic. But if you're willing to stay on the brand, they'll charge you extraordinary prices."
Express Scripts, which is also a pharmacy benefit management company, says pharmacists fill 85 percent of all prescriptions with generics. But people are spending 70 percent of all drug money on brand named medication. That's 15 percent of medications bought, making up 70 percent of the cost.
"When a drug goes generic there are certain patients that really, really, really want to stay on that brand," Miller notes. "They have this illusion that the brand works better. Therefore, I can actually raise the brand price, and you'll pay more."
So to make our point, we raised the price on our branded lemonade. But our customers were not so easily fooled.
"Tastes the same to me," one man tells us.
And when we explained the reason behind our lemonade stand to our taste testers, they quickly figured out the connection.
"Why would they be different if it's the same pill?" one person asks of the drug prices.
"It's terrible," another responds.
A third tester says, "Makes me feel like we're getting ripped off."
Even on a warm Louisiana afternoon, just remember: Sometimes it makes no sense to pay a premium when the ingredients in the cup are exactly the same.
"It just sounds like to me that somebody needs to do… some investigation on this to make the cost of medicine more affordable," a customer says.
The Pharmaceutical Research and Manufacturers of America sent us a statement Thursday regarding Wednesday's report on drug price increases. They told us focusing solely on the list prices of medicines misrepresents the dynamics of the U.S. prescription medicine marketplace by ignoring the discounts and rebates negotiated by payers.