Shopping for Drugs: 2007

Patients are increasingly being given the opportunity and responsibility to manage their own health care dollars.  The uninsured and others who pay for prescriptions out of pocket are looking for ways to cope with rising drug costs.  Seniors have new Medicare choices that include drug coverage.  Given the changing realities of the health care marketplace, every patient interested in saving money on drug therapy should consider a common-sense solution:  smart shopping. 

Patients can cut costs substantially by becoming aggressive consumers.  In fact, they can reduce the cost of some common drug therapies by more than 90 percent if they use the same buying techniques they routinely use when shopping for other goods and services. 

Consumers have never had more opportunities to obtain information about drugs.  A patient with a prescription can find a range of prices by clicking on a few Internet pharmacy Web sites.  The Internet also makes it easy to look up information on government and private programs that assist elderly, low-income and disabled patients. 

Seniors can begin using smart shopping techniques in selecting a prescription drug plan (Medicare Part D) or Medicare Advantage managed care plan.  Many Medicare managed care plans include drug coverage, but some limit coverage of brand-name drugs, and some require seniors to pay some of the costs.  Similarly, Part D drug plans differ in the premiums charged, the drugs they cover and the amount of cost sharing required.  Some avoid the standard coverage gap between $2,400 and $5,451 in drug expenses.  Thus, seniors should select the plan that meets their individuaneeds at the lowest cost.

Recent developments in the market for prescription drugs may offer the most promising opportunities for patients to save.  For example, consumers in 27 states now benefit from a new $4 for a 30-day supply of one of 150 different generic prescription drugs at Wa-Mart.  Riva-competitor, Target, has announced an intent to match Wa-Mart’s prices.  As more patients begin comparison shopping for drugs, more retailers wilcompete to win their business which wildrive prices lower. 

While these generic drug programs wilhelp many consumers lower their drug bills, many patients take medications that are not available in generic form.  They can stiluse the smart-shopping tools outlined in this study to become savvy consumers of prescription drugs:

Price Comparisons.  Many people assume drug prices are uniform and do not bother to comparison shop.  In fact, drug prices vary considerably.  One survey found prudent shopping among locapharmacies saved consumers almost 10 percent on brand-name drugs and a whopping 81 percent on generics, on the average. 

Drug Substitution.  When physicians prescribe drugs, patients should ask if cheaper alternatives are available; they often are. 

Bulk Buying.  All supermarket patrons know that choosing larger packages usually lowers the unit cost.  The same is true for drugs.  Pills purchased 90 or 100 at a time usually sell for much less per dose than quantities bought 30 at a time.  This is especially true for generic drugs ordered by mail. 

Mail-Order Pharmacies.  Although drugstore chains stilselthe most drugs, mail order pharmacies are gaining ground and now account for about 17 percent of the retail drug market.  Mail-order and Internet pharmacies offer the best deals on prescription drugs for patients with chronic conditions.  Some patients even buy drugs from other countries over the Internet, although the practice is illegal and the drugs may not be safe.

Pill Splitting.  Patients can purchase many medications in doses double the prescribed amount and split them in half.  Often, pharmacists will split the pills for them.  Savings of 30 percent to 50 percent are not uncommon because many medications are sold for about the same price regardless of dosage.   

Generic Medications.  For most patients, generic medications work as welas brand-name drugs and cost 20 percent to 80 percent less.  The average cost for a generic prescription was $29.82 in 2005, compared to $101.71 for branded medications. 

Over-the-Counter Drugs.  As an alternative to prescription drugs, patients may find that an over-the-counter (OTC) drug does just as wel.  Americans buy more than five billion OTC drug products each year – 60 percent of aldrugs used.  Today, consumers have access to a market with more than 100,000 different OTC drug products; more than 600 of them were previously available only by prescription. 

PharmaceuticaCompany Assistance Programs.  Many drug companies offer discount card programs to assist disabled, low-income and/or elderly patients with the cost of drugs.  For example, Together RX Access, a joint program run by severadrug companies, offers savings of up to 40 percent on more than 150 different drugs.  Low- to moderate-income families qualify for the program.

Medicare Drug Plans.   Seniors now have an opportunity to combine smart shopping techniques with the new Medicare drug plan, using the information available at Medicare.gov.  The Web site allows seniors to calculate their out-of-pocket costs under different plans for the specific drugs they take for chronic conditions, allowing them to pick the plan that best meets their individuaneeds.  In addition, the new prescription drug benefit offers financiahelp for low-income seniors.

State Drug Assistance Programs.  Almost three-fourths of the states have created some type of drug assistance program for the elderly, low-income patients and/or people with disabilities.  More than half of the states provide funds to help seniors pay for medicine, and nine states offer drug discount programs that allow seniors to purchase drugs at prices below retai.

How much can patients expect to save by using these techniques?  The NCPA reviewed prices of Web-based pharmacies during 2006 and found they varied widely.  Take the cardiovascular drug, Tenormin, for example: 

• The NCPA survey found that the price of 100 (50mg) doses of Tenormin ranged from $139.74 at Drugstore.com to $125.49 Costco.com. 
• But patients could save nearly 90 percent over the lowest cost brand-name drug by switching to the generic alternative, Atenolo; 100 doses of the generic drug ranged from $19.98 if purchased through Walgreens.com to $8.29 at Costco.com. 
• Finally, consumers could save another 32 percent (from $8.29 to $5.65) by buying larger, 100mg pills and splitting them in half.

Therefore, smart buying lowered the potentiaoveralcost from a high of $139.74 to a low of $5.65 – a 96 percent saving. 

For another example of potentiasavings, consider the heartburn drug, Nexium:

• If purchased in smalquantities – 30 capsules at a time – from Drugstore.com, Nexium costs about $493.33 per 100 doses; however, a shopper buying from Costco.com would pay $434.67 for 100 capsules, a 12 percent saving. 
• Buying the generic equivalent of a therapeutic substitute, such as Omeprazole, would only cost $65.79. 
• Furthermore, Prilosec OTC, a branded form of the generic drug Omeprazole, is now available over the counter; a savvy consumer opting to pay $61.88 for a 100-day supply from Drugstsore.com would save 87 percent off the most expensive option.

Americans spent nearly one-quarter of a trillion dollars on prescription medicines and over-the-counter (OTC) drug remedies in 2005.¹  Drug spending is expected to continue growing at a rate greater than inflation.²  Americans see their doctors more than 890 million times each year, and two-thirds of office visits to physicians result in prescription drug therapy.³  Overall, the National Association of Chain Drug Stores estimates that 3.38 billion retail prescriptions were written in 2005.⁴  The average cost of those prescriptions was $64.86.⁵ 

“Patients can save money on their drug bills by smart shopping.”

However, most patients can easily lower their drug bills by employing some or all of the strategies detailed in this report. To do so, they must treat drug purchases as they would treat any other prospective purchases – by shopping and comparing prices.  [For tips on smart shopping, see the nearby “Checklist for Saving Money on Drugs.”]

Warning No. 1:   Some of the techniques described below involve buying drugs from a variety of sources.  While this may cut costs, there is a danger.  Doctors, pharmacists and other health and medical professionals are trained to recognize dangerous interactions among drugs.  Many of these professionals use software that performs this function automatically.  Therefore, patients who purchase drugs from more than one source should consult their doctor or pharmacist to ensure that the drugs they take will not interact in harmful ways. 

Warning No. 2:  When shopping for drugs on the Internet, patients should stick with trusted vendors.  Some Web sites that claim to be Canadian, for example, are actually based in other countries.  In addition, drugs offered via e-mail may be adulterated, expired or contain no medication.  And there is no guarantee that consumers will receive shipments for which they have paid. 

Consumers have never had more opportunities to obtain information about drugs and possible substitutes, and to compare prices.  Shopping around town or via the Internet for price information can pay big dividends.

“Smart Shopping: Compare prices.”

Local Pharmacies.  Prescription drug prices at different pharmacies can vary widely. In Missouri, prices within a single city differed by 3 percent to 16 percent for brand-name medications and by 39 percent to 159 percent for generic medications, according to a survey sponsored by the Heartland Institute.⁶  However, prudent shopping would save Missouri consumers almost 10 percent on branded drugs and a whopping 81 percent on generics, on the average.  In Houston, Texas, a physician who surveyed prices for generic drugs she prescribed found they varied by 50 percent to 80 percent.⁷

Interestingly, small independent pharmacies often have better prices for generic medications than large chain stores.⁸  Take the generic form of Prozac (Fluoxetine) used to treat depression. ⁹  When it first became available in generic form, many pharmacies marked up Fluoxetine by 3,000 percent to 5,000 percent over its wholesale cost.¹⁰  As a result, in Detroit, Fluoxetine cost almost $47 at stores in the CVS national chain, but sold for less than $9 at the local Beacon Hill Pharmacy.¹¹

Drug prices also vary depending on geographic location.  For instance:

• In 2003, 30 doses of 20mg Fluoxetine cost as much as $55 at Walgreens in central Iowa,¹² but only $40 at a Walgreens in Florida.¹³ 
• Currently, the price for a 30-dose supply of Fluoxetine (20mg) in Jacksonville, Fla., varies from a low of $13.95 at a Save Rite Pharmacy to $99.75 at Halliday’s & Koivisto pharmacy.¹⁴ 

Patients should also consider wholesale club chain stores, which consistently have the best prices.   (Note that Costco and Sam’s Wholesale do not require membership to use their pharmacies.)

However, the lowest local price may not be the best price a consumer can get – online pharmacies often offer even lower prices. Online prices for Fluoxtine can vary from $6.59 at Costco.com to $33.94 at Walgreens.com.¹⁵  Thus, the lowest price source for a drug may not be local, but on the Internet.

When Pharmacies Compete.  Many consumers will benefit from the new drug pricing policy at Wal-Mart: $4 for a 30-day supply of some 314 generic prescription drugs.¹⁶ As of October 2006, the program was available in 27 states, although Wal-Mart expects to eventually roll out the policy nationwide.  These prices are available to all customers, with or without insurance.¹⁷  Wal-Mart said these generic medications account for almost 30 percent of the prescriptions filled at its pharmacies in Florida, the first state where it offered the program.

“Wal-Mart, Target and other large chains are competing on price.”

Other companies are also developing ways to offer customers lower prescription drug prices.  For example, Target has announced its intent to match Wal-Mart’s prices.¹⁸  Wegmans, a chain of grocery stores in five states, recently launched a program that includes almost 100 different generic drugs.¹⁹  Customers pay only $11.99 for a 90-day supply. ²⁰  Even more remarkably, two pharmacy operators have decided to give away generic prescription drugs.  In Columbus, Ohio, Giant Eagle is offering free generic versions of seven different antibiotics and four cough-and-cold medicines to patients with a prescription.  Similarly, Meijer stores, with 176 locations in five states, will offer seven generic antibiotics free of charge to all patients with a prescription.²¹  President Mark Murray says the program includes about 70 percent of the generic pediatric prescriptions filled at Meijer stores, and will save parents without insurance coverage as much as $40.²²

“The Internet is a valuable tool for information.”

Internet Information Services.  Generally, the Internet is a patient’s most valuable information tool, whether they are comparing prices or learning about drug interactions.  For instance, Florida has a Web site that records prices at all pharmacies across the state.  The Web site illustrates how prices can vary significantly from pharmacy to pharmacy.  At last check, a 30-day supply of 50mg Atenolol in Duval County ranged from $7.95 at a Winn-Dixie Pharmacy to $36.48 at Panama Pharmacy.²³  Also at last check, across Miami-Dade County the price for the same prescription ranged from a low of $5.20 at Citrus Health Network, Inc.’s pharmacy to a high of $137.87 at Statscript Pharmacy.²⁴ 

In general, patients everywhere can find a wide range of prices for prescriptions by checking a few Internet pharmacy Web sites.  As the case studies in the appendices illustrate, consumers can save as much as 97 percent or more in some cases. [See Appendices B, C and D.] 

Reverse Auction Web sites.  Several reverse auction Web sites – including BidForRx.com, PillBid.com and BidRx.com – allow participating local pharmacies to submit competitive bids to fill prescriptions.²⁵  In a reverse auction, patients enter information about prescriptions they want to fill.  Participating pharmacies have a set amount of time to submit the lowest price they are willing to accept to fill the prescription.   The consumer can choose among competing bids (likely accepting the lowest) and then print an invoice to take to the pharmacy. 

Currently, BidRx has several thousand local pharmacies and several mail-order pharmacies under contract.²⁶  Consumers can limit the auction to nearby pharmacies.  Web site testimonials from clients report significant savings.  A similar type of service has already been proposed by former House Speaker New Gingrich, currently head of the Center for Health Transformation.²⁷  He estimates that a reverse auction model for Medicaid would reduce prescription expenditures by 40 percent.²⁸  This type of service could become as common as selling or buying on eBay. 

DestinationRx.com and Rxaminer.com.  Rxaminer.com is a Web-based service that helps patients find cheaper medications comparable to the ones they currently take.²⁹  Customers enter names and dosages of medications; Rxaminer compares them, suggests substitutes (often several) and allows patients to print reports detailing potential savings.  Patients then can discuss these reports with their physicians to see if the cheaper medications are appropriate. 

Another unique Web site called DestinationRx.com collects prices from numerous competing online pharmacies, allowing consumers to compare prices without going to individual pharmacy Web sites.  This service also works with the new Medicare.gov Web site and is an important tool to help seniors choose a Medicare prescription drug plan.  [See the sidebar: “Special Opportunities for Seniors to Save: Comparing Medicare Drug Plans.”]  Seniors can enter the drugs they currently take and find the prices for drugs under competing drug plans.  Prices can vary considerably.

“Patients should discuss drug therapy choices with their physicians.”

The doctor’s office is a good place for patients to start lowering their drug bills.  The notion that the choice of medications should be left completely to physicians is outdated.  Patients should ask if there are cheaper alternatives to a prescribed medication – including generic substitutes, alternative drug therapies or over-the-counter (OTC) drugs.  Research on patients with chronic conditions revealed that 72 percent found discussing drug costs with their doctors helpful.  And after these discussions, they were switched to a lower-cost alternative more than two-thirds (69 percent) of the time.³⁰ 

“There are many therapies to treat most conditions.”

By communicating with their doctors, patients may find a wealth of drug options.  For example, unless patients bring up the subject, physicians may not even be aware of the cost of medications they prescribe, the extent of their patients’ insurance coverage, or the patients’ ability to bear significant out-of-pocket costs.   

“The cost of drug therapies for many conditions varies widely.”

There are many therapies to treat most conditions.  [See Table I.]  Some therapies cost more than others to treat the same conditions.  Also, newer therapies may only offer modest improvement better than older ones.  Take drugs to treat schizophrenia. Recent research has raised concerns that newer drugs cost many times more than older drugs that appear to work as well in most people.³¹ [See Figure I.] 

“Smart Shopping: Consider therapeutic substitutes.”

In some cases, a drug class includes OTC medications, as well as brand-name prescription drugs and generics.  Drugs within a therapeutic class may be similar, but their prices often vary substantially.  For example, alternative therapies are readily available for two fairly common conditions: allergies and heartburn.  Treatment options for these conditions are discussed below.  Patients already taking prescribed drugs can explore alternatives using the internet resources noted previously prior to scheduling their next doctor’s appointments. 

Case Study: Allergy Medications.  Patients suffering from seasonal allergies have a myriad of choices, including prescription drugs, OTC drugs, decongestants, antihistamines and nasal inhalers.  All of them offer symptomatic relief, but some have fewer or less-severe side effects than others.  The most popular sinus allergy medications are antihistamines, the cheapest of which are first-generation antihistamines.³²  They are economical and available OTC.³³  Although they can cause drowsiness, studies have shown that they are often just as effective as newer, nonsedating drugs.³⁴

The allergy medication Claritin and its generic equivalent (Loratadine) are now available over the counter. Although they still cost more than older OTC antihistamines, they are cheaper than prescription alternatives, such as Allegra, Zyrtec and Clarinex.  (Clarinex is a new prescription variant of Claritin from the same manufacturer; some critics claim it is about the same as the older drug.)³⁵  How much can patients save by considering other treatments for their allergies?  As shown in detail in Appendices A-1 and A-2: 

• For newer, prescription-only antihistamines, patients shopping at Costco.com can expect to pay about $129.49 per 100 doses of Allegra compared to about $192.89 for Zyrtec and almost $268.17 for Clarinex.³⁶
• Allegra’s generic equivalent, Fexofenadine, is available at Drugstore.com at a cost of $76.63 for 100 tablets.³⁷ 
• However, 100 doses of OTC Claritin costs only about $76.63 at Walgreens Web site, while its generic equivalent, Loratadine, is available from Sam’s Club for $5.28.³⁸   
• Another substitute that may work for some patients is the first-generation antihistamine Benadryl and its generic equivalent, Diphenhydramine, which is available at Drugstore.com for about $3.90 if purchased in quantities of 200 tablets.³⁹ 
• Research has shown that the first-generation, OTC drug Chlor-Trimeton (Chlorpheniramine) is more effective at binding to the histamine receptor than other antihistamines.⁴⁰  It can be purchased in bottle of 100 4mg tablets for $4.79 from various vendors on Yahoo Shopping for about a penny per three-tablet dose.⁴¹

Although there are many medications to treat allergy symptoms, there are tradeoffs with respect to side effects.  For example, antihistamines tend to raise blood pressure.  Ideally, patients should confirm the safety of any drug taken regularly – including OTC medications – with a physician or pharmacist.  However, side effects may not be an issue for some people.  For example, Benadryl can cause drowsiness compared to Loratadine, but those suffering from nighttime allergies may find it is the ideal drug.⁴²  And at less than four cents per tablet, it is about 98 percent less than newer prescription drugs.⁴³  Consumer Reports rates Loratadine a best buy among antihistamines.⁴⁴

“Older, cheaper drugs may be just as effective as newer drugs.”

Case Study: Heartburn Medications.  Some newer therapies are only slightly more effective (or tolerable, with respect to side effects) for most patients than older therapies – but at a much higher price.  Experts suggest this may be the case with the newest heartburn medications, known as proton pump inhibitors (PPIs).⁴⁵   For those with severe heartburn (called gastroesophageal reflux disease or GERD), PPIs such as Nexium, Prevacid, Protonix or similar drugs are the treatment of choice.  PPIs were the second most popular class of drugs in 2003 with $13 billion in sales.⁴⁶  Prilosec was the leading prescription PPI until it was moved OTC in the fall of 2003.⁴⁷  Critics content that Prilosec OTC is just as effective as Nexium, the prescription drug that replaced it, but at much less cost.  However, Nexium is often prescribed for garden-variety heartburn.  And drugs in an older class (called H2-receptor antagonists) that includes Zantac and Pepcid are also much cheaper. 

PPIs are not cheap: 

• The cost for 100 doses of Nexium is more than $493.30 if purchased in small quantities from Drugstore.com;⁴⁸  Prevacid is similarly priced.⁴⁹ 
• However, purchasing 100 doses of Protonix (Pantoprazole Sodium) from RxUSA.com would save more than $140.⁵⁰ 
• Prilosec OTC is a less expensive option, currently available from Costco.com for $61.88 for 100 doses.⁵¹ 

For patients with little more than occasional indigestion, Zantac or its generic equivalent, Ranitidine, may be sufficient.⁵²  Although Ranitidine is now available over the counter in 75mg tablets, it is often prescribed in 150mg doses.⁵³  Among patients’ options:

• Purchasing 100 (150mg doses) of Ranitidine from Sam’s Club would cost slightly less than $5, or 5 cents a dose.⁵⁴ 
• Drugstore.com sells 400 mg generic Tagamet (Cimetidine) in quantities of 100 tablets for $28.32, or about 28 cents for a 400mg dose.⁵⁵
• Patients who do not do well on Zantac or Tagamet can choose the generic equivalent of Pepcid (Famotidine) for around 12 cents per 40mg dose at Sam’s Club.⁵⁶ 

Caution: Advertised and Sampled Drugs.  Why is it so important to be an informed drug consumer?  One reason is that the few drug therapies advertised are generally the most expensive.  Free samples given to physicians are often expensive drug therapies.  Critics also charge drug advertising is often not backed up by facts.  A study of pharmaceutical advertising materials sent to German physicians revealed that about 94 percent of claims had no basis in scientific fact.⁵⁷

“Drugs that are advertised and given out as free samples are usually expensive.”

Direct-to-Consumer Advertising.  Drug advertising is beneficial because it educates patients about new clinical treatments and often prompts them to seek care for previously untreated medical problems.⁵⁸  However, the drugs advertised are also likely to be the most expensive.⁵⁹  By 2005 drug advertising surpassed $4 billion – about four times the level of spending in 1998, the first year after the Food and Drug Administration began to allow direct-to-consumer advertising.⁶⁰  Advertising is by no means representative of all therapies available.  The newest innovative therapies are the ones most likely to be advertised because these drugs are under patent protection and the manufacturer profits by informing potential consumers.  Drugs that have lost patent protection are rarely promoted because doing so benefits competing generic drug manufacturers. 

Newer drugs may offer considerable advantages over older products.  A new drug advertised on television may indeed be the correct therapy for some patients.  But patients and their doctors should make the decision after considering all options – not just the ones seen on TV.

Free Samples.  Drug company marketing also benefits patients by providing free samples to doctors.  Drug samples allow patients to try new medications without cost.  In fact, about half the marketing budgets of pharmaceutical companies are spent on distributing free samples.⁶¹   When offered samples by their doctors, however, consumers should also ask if there are nonsample medications that might have similar therapeutic benefits.  Although samples are free at the doctor’s office, refills may be costly.  Trying both free samples and alternatives (usually generic medications that must be purchased) will allow patients to compare whether the benefits of the newer drug outweigh the cost.  Furthermore, many clinics and university teaching hospitals no longer use free samples.  They claim it is cheaper in the long run to prescribe and purchase generic medications than to offer patients free samples of medications that are expensive to refill.⁶²

“Smart Shopping: Buy drugs in larger quantities.”

Consumers can save the most on medications when they purchase in quantity.  About 85 percent of employer-sponsored health plans offer members medicine by mail order.⁶³  Under these plans, a 90-day supply often costs the same as a 30-day to 60-day supply at a community pharmacy.  Generic drugs are especially subject to deep discounts.  In many cases, ordering quantities of 100 tablets costs only a few dollars more than ordering 30 tablets.⁶⁴  Mail-order pharmacies are extremely useful to treat chronic diseases requiring the same medication month after month.  Although drugstore chains still sell the most drugs, accounting for 42 percent of the market, mail-order pharmacies are gaining ground and now command about 17 percent of retail sales.⁶⁵ 

Consumers without a mail-order option through their health plan can order drugs from an Internet mail-order pharmacy that serves the general public.  For example:⁶⁶

• At CVS.com, 30 Atenolol tablets costs $7.99.
• The cost for 60 doses at HomeMed.com is $7.99.
• At Costco.com, 100 Atenolol tablets costs $8.29.

Larger packages of OTC medications may also be cheaper:

• At Drugstore.com, 20 Loratadine tablets (generic Claritin) cost $5.99. 
• A 60-count box of the same brand sells for $11.89 and a 120-count box is only $14.99 at Drugstore.com.⁶⁷ 
• At Sam’s Club, a 300-count box sells for $15.84.⁶⁸

Ordering a prescription by mail may not work for new prescriptions where treatment must begin immediately or for drugs taken occasionally, but many patients regularly taking a medication for a chronic ailment can save by using mail-order pharmacies.  Certain drugs, however, are not suitable for bulk sales due to the need for periodic monitoring and the potential for abuse.  In some cases physicians may be resistant to prescribing the equivalent of a three- or six-month supply.

Another way to lower drug costs is to purchase medications in doses double the prescribed amount and split them in half.  Pill splitting saves money because many medications sell for about the same price regardless of dosage.  Take Viagra, for example.  If ordered from Costco.com, six Viagra tablets cost $57.67 ($9.61 each), regardless of whether the dose is 25mg, 50mg or 100mg.⁶⁹ 

Many tablets are scored across the center to facilitate splitting.  Viagra, however, is an odd-shaped tablet that is difficult to split into two perfect halves.⁷⁰  To solve this problem, several firms produce splitters designed just for the diamond-shaped tablet.  Thus, patients will save 50 percent when they buy double-dose tablets and split them in half.  For a variety of pill shapes, Precision Pill Splitters makes pill splitting devices that create two perfect halves.  One model has interchangeable pill beds that exactly fit the shape of specific medications.  The company also makes a device to quarter a pill.⁷¹ 

While many popular medications may be suitable for splitting or quartering, others are not, including extended release tablets, capsules and medications for many serious disorders. ⁷²  An important consideration is whether or not a patient is able to accurately cut a tablet.  Elderly patients may find pill splitting difficult; however, some pharmacists will split or crush and encapsulate pills. 

“Smart Shopping: Split higher-dose pills.”Some public health advocates question whether splitting can result in halves equal enough in weight to be safe – especially if pill splitting is required by the insurance company’s formulary.⁷³  But research from the University of Maryland found that pill splitting is a viable option.⁷⁴  And researchers at Stanford University found substantial consumer savings from splitting 11 of 265 of commonly prescribed medications.⁷⁵  Potential savings range from 23 percent to 50 percent for these drugs.⁷⁶    Table II illustrates the potential savings for selected drugs. 

Consumers can also lower drug bills by seeking generic equivalent medications whenever possible.  Although half the drugs sold are generic medications – up from just over 20 percent in 1985 – they are still underutilized.  According to the Prime Institute at the University of Minnesota, only 10 of the 50 medications most frequently used by seniors in 2001 were generics; the remaining 40 were more expensive brand-name drugs.⁷⁷  For example, two-thirds of the drugs dispensed by the Veterans Affairs (VA) health system are generic, but they represent only 8 percent of the VA’s prescription costs; the rest are branded and account for 92 percent of the VA’s drug costs. ⁷⁸ 

“Smart Shopping: Consider generic drugs.”

For retail customers, generic drugs are generally priced 20 percent to 80 percent lower than the original branded drug.⁷⁹  In 1993 the cost difference between buying a name-brand medication and its generic equivalent was $22.46.  A dozen years later the savings had more than tripled to $71.89.  Thus, the average cost for a generic prescription was $29.82 in 2005, compared to $101.71 for branded medications.⁸⁰  Only those medications whose patent has expired are available in generic form, however.  Some well-known drugs that have recently lost patent protection include Prozac and Zoloft (for depression), Claritin (for allergy relief), Zocor (to lower blood cholesterol) and Prilosec (for ulcers and gastric reflux disease).

Patents and Drug Prices. The number of generic equivalents available will increase over the next few years as many so-called blockbuster drugs lose patent protection and face generic competition.  More than 30 of the nation’s 57 largest-selling drugs will lose patent protection by 2008.⁸¹  According to estimates by the pharmacy benefit manager Express Scripts, brand-name drugs with annual sales of $12 billion are expected to lose patent protection in 2006.⁸²  From 2006 to 2010, blockbuster drugs with combined annual sales of about $45 billion per year will become available in generic form.⁸³ 

Both the Bush administration and Congress are taking additional steps to speed generic drugs to market.⁸⁴  For example, generic drug producers have complained that major pharmaceutical firms delay competition through time-consuming legal maneuvers (and effectively extend the life of the original patent).  However, a regulatory change by the Bush administration that became effective in 2003 limits patent holders to one 30-month delay while contesting competition from generic products.⁸⁵  Thus consumers will find more opportunities to substitute generics for brand-name medications over the next few years.

The cholesterol-lowering medication Lipitor has been the single best-selling drug for several years running.  In June 2006, a closely competing drug, Zocor, lost patent protection;⁸⁶ a generic version has won tentative approval.⁸⁷ As a result, the price of the generic drug will likely fall nearly 80 percent by mid-2007.  Consumers taking either Lipitor or Zocor will soon have opportunities for significant savings.⁸⁸  Additionally, three of the seven popular statin drugs will be available in generic form by 2007 – up from only one (Lovastatin) in 2005.⁸⁹

Chronic Disease Management.  Today, insurers and patients themselves have the ability to manage chronic conditions better.  Kaiser Permanente’s health maintenance organization (HMO) and the Veterans Affairs health system have both installed sophisticated electronic medical records systems combined with chronic disease management.  Both also use generic medications whenever possible.  For instance, high cholesterol is under-treated in the United States and is thought to result in heart disease – the number-one killer of Americans.  Lipitor is a powerful cholesterol-lowering drug and the number-one seller.  Lipitor and newer drugs like Zocor and Crestor are thought to better control cholesterol than older drugs, like Lovastatin, but are more expensive.  Both the VA and Kaiser have found that by using information systems that intensively monitor progress, they can control most patients’ cholesterol with less-expensive drugs.⁹⁰  Controlling cholesterol through a combination of diet, exercise and generic Lovastatin may work as well or better for most people than relying on the newest drug available.

“Smart Shopping: Consider over-the-counter versions of prescription drugs.”

About 80 percent of the time, patients initially treat their medical problems with over-the-counter drugs.  Americans buy OTC drugs more than 5 billion times each year.⁹¹  Today’s consumer can choose from more than 100,000 different OTC drugs.⁹²  And physicians recommend them more frequently than in the past.⁹³  Although most people probably assume prescription drugs have been around as long as doctors,⁹⁴ in reality virtually all drugs were sold over the counter until the FDA created prescription drugs in 1951.⁹⁵  Moving some prescription drugs OTC saves patients the cost of a physician visit just to renew a prescription, which may sometimes be valuable, but is probably unnecessary. A recent study by the European Self-Medication Industry found that moving a mere 5 percent of prescription drugs to the OTC market would save public-funded health systems across Europe more than $20 billion a year.⁹⁶ 

Drugs Switched from Prescription to Over-the-Counter.⁹⁷  Increasing access to medications where self-treatment is appropriate is an important way to save money and empower patients to take responsibility for their own health.  In the future this will increasingly include medications for chronic ailments.⁹⁸

The FDA can approve a prescription drug for OTC sale once it decides the benefits outweigh the risks, the potential for abuse is low, consumers can self-diagnose their condition, labels can be easily understood, and the advice of health practitioners is unnecessary.  The 90 prescription products the FDA has switched to over the counter during the past 30 years include such familiar brands as Advil, Afrin, Drixoral, Aleve, Pepcid AC, Zantac-75, Nicorrette, Rogaine and Lamisil.⁹⁹   The FDA also recently approved an OTC version of Xenical (Orlistat) – a fat-blocking drug to promote weight loss. ¹⁰⁰ 

In years past, drugs were usually only switched from prescription to OTC status at the request of the drug maker, and only when patent protection was about to expire.¹⁰¹  In 2002, however, an FDA panel voted to recommend OTC status for Claritin (one of the best-selling allergy medications) on a request from the health plan manager, WellPoint Health Networks.  It was the first time the FDA took such action without an initial request from the manufacturer.  In response, Claritin’s manufacturer asked for OTC status – which the FDA granted – so it would be able to market the drug as a nonprescription medication while it was still under patent.¹⁰²

“Prices drop sharply when prescription drugs move to over-the-counter sale.”

When products move to the OTC market their prices drop sharply.¹⁰³  For example, when Claritin moved to the OTC market in December 2002,¹⁰⁴ sales increased dramatically, but the dollar-value of prescription antihistamines fell 28 percent the following year due to lower prices for Claritin.¹⁰⁵

Utilizing OTC medications can save patients money.  For instance:

• Before moving to the OTC market, prescription Claritin cost $2.92 per day;¹⁰⁶  currently, OTC Claritin costs 52 cents per day at Costco, and its generic equivalent costs as little as five cents per day at Sam’s Club.¹⁰⁷ 
• Before moving to the OTC market, Prilosec cost $122.99 for 30 capsules at Walgreens.com, a daily cost of about $4.10;¹⁰⁸ currently, Costco.com sells a box of OTC Prilosec with 42 capsules for $25.99, or a daily cost of 62 cents.¹⁰⁹

Recently, however, FDA approval for OTC sale has slowed dramatically; in the past five years, it has reclassified only seven prescription drugs (including the best-selling drugs Claritin and Prilosec).  Over a 20 year period, by contrast, European countries approved about four times as many prescription medications for OTC sale as the United States, according to a 2003 report from the Tufts Center for the Study of Drug Development.¹¹⁰ 

Missed Opportunity.  Consumers lost a money-saving opportunity when an FDA advisory panel voted against OTC access to the cholesterol-reducer Mevacor.¹¹¹  This is the third time the FDA has turned down a request to make cholesterol-lowering drugs available without a prescription, thus denying consumers the power to control an important aspect of their medical care.

Why should consumers be concerned?  Cholesterol control medicine is the most widely used type of prescription drug from the powerful class of medications known as statins.  For instance, Lipitor, a popular prescription cholesterol-reducer, has been the best-selling drug in the United States for the past several years.  Several other cholesterol medications round out the top 50 drugs most widely used by seniors.  Americans spend about $14 billion per year on cholesterol reducers.  Add the cost of diagnostic tests and doctor visits to obtain prescriptions and this figure probably approaches $20 billion per year.

Depending on the guidelines used, an estimated 40 million to more than 100 million Americans have high cholesterol.  Many of them could benefit from a cholesterol-reducing drug, but aren’t currently taking one.  Most don’t seek treatment because it is inconvenient and expensive to visit a doctor and pay for prescription medication.

Statins can reduce the risk of cardiac events, such as heart attacks, by nearly one-third. These drugs are so beneficial that some health experts compare them to the public health benefits of fluoride.  A recent BBC news feature whimsically asked, “Is the threat of cardiovascular disease so great that statins may as well be added to the water supply?”¹¹²  Another recent article appearing in the prestigious British Medical Journal declared, “Statins are the new aspirin….”¹¹³ On balance, the benefit of statins far outweighs their risks, spurring the British government to approve an OTC version of the cholesterol-control drug Zocor in 2004.¹¹⁴

“New drugs may have fewer side effects, but cost much more than older drugs.”

To receive FDA approval, drug manufacturers must prove their drug is both safe and effective.  They don’t have to prove the new drug works better than comparable therapies, only that the drug works better than a placebo.¹¹⁵  Some drugs are more effective in treating a condition than others, but some expensive drugs only work marginally better than cheaper alternatives.¹¹⁶  The idea of comparing the cost-effectiveness of drugs – that is, separating clinical evidence from economic considerations – is controversial when it comes to public programs, yet consumers do it every day when purchasing other goods and services.¹¹⁷ 

Consumers Union has created a Web site to help patients determine which drugs are a good buy versus those that may not be.¹¹⁸  They have also published reports on 12 drug classes, accounting for about 40 percent of drugs sold in the United States.¹¹⁹ 

Another avenue for information available to patients is testimonials from Web sites and message boards.  One such Web site, AskAPatient.com, rates more than 2,500 medications based on average responses from thousands of patients.  Each report lists the total number of responses and the average rating.  Patients who want to delve deeper can examine the sex, age and comments of those who have provided feedback.¹²⁰

Patients often begin taking a drug and never question its necessity later.  They should periodically ask their doctors if they still need to take a prescribed drug.¹²¹  Furthermore, not all prescriptions are appropriate for older patients.  According to studies published in the Archives of Internal Medicine, a senior receives one inappropriate medication for roughly every 12 doctor visits.¹²² Currently, some 20 percent of seniors are taking at least one medication that is not recommended for their age group, 15 percent are taking two inappropriate drugs and 4 percent have been prescribed three drugs deemed inappropriate.¹²³  The likelihood of inappropriate medication is about double for women and increases when multiple drugs are prescribed.¹²⁴ 

“Some conditions can be treated with lifestyle changes.”

There seems to be a pill for about every condition – real or imagined.¹²⁵  However, patients are in the best position to decide if so-called “lifestyle” drugs are really worth the cost.  There are undoubtedly millions of people who would not agree that drugs such as Viagra for erectile dysfunction¹²⁶ or Propecia¹²⁷ for baldness have no medical necessity.

However, patients taking expensive medications often overlook nondrug alternatives.  For instance, statins (antihyperlipidemics) are one of the drugs most widely used by seniors.  Statins have been proven to extend life – but the greatest benefit is for seniors who have a serious heart condition.  They have only a marginal effect in healthy seniors,¹²⁸ and many seniors would probably be healthier if they controlled cholesterol through diet.¹²⁹  Physicians say losing weight and exercise are the best option for controlling high blood pressure.¹³⁰  The first line of defense in preventing obesity and Type-II diabetes is prevention by changing diet and exercise.¹³¹  The same is true for GERD.  Gastroenterologists suggest most patients with GERD should first change their lifestyle before trying H2 receptor antagonists or before taking the more costly PPI drugs.¹³²

Patients also often overlook cheaper drug options.  For example, research has found that a diuretic – a water pill – is more effective than newer, more expensive antihypertensive medications.¹³³  In addition, a recent study in the Journal of the American Medical Association found that two aspirins daily were as effective in preventing recurrent strokes in African Americans as a daily 500mg dose of the drug Ticlopidine.¹³⁴  This is a significant finding, given the fact that Ticlopidine can easily cost patients more than $100 per month.¹³⁵

Treatment of migraine headaches provides another example.  A drug trial found that Acetaminophen combined with aspirin and caffeine (AAC) provided more sustained relief than the prescription drug Sumatriptan.¹³⁶  Those taking Sumatriptan reported faster relief – 29 percent versus 19 percent of those on AAC – and had little or no pain after 30 minutes.  But at two hours, the AAC treatment group fared significantly better (84 percent versus 65 percent).¹³⁷

“There are many drugs to relieve arthritis pain.”

Choosing a Pain Reliever.  Some seniors may not be getting their money’s worth from the new generation of “super-aspirins” called Cox-2 inhibitors.  They relieve pain and inflammation without the stomach irritation sometimes experienced by taking daily doses of aspirin, Ibuprofen or Naproxen.  But they may offer most seniors only modest benefits over cheaper drugs,¹³⁸ and they may cause heart attacks.¹³⁹

A recent study found that two-thirds of patients on Cox-2 inhibitors were not at risk for gastrointestinal conditions like ulcers or bleeding, but most of them had not tried cheaper alternatives.¹⁴⁰  Another study, by the pharmacy benefits management company Express Scripts, found that more than three-fourths (76 percent) of these prescriptions are written for patients who are not at risk of gastrointestinal side effects.  On average, patients who receive new prescriptions of Cox-2 inhibitors use the drugs for less than 60 days.  This suggests that the drug is not necessarily prescribed for conditions that require long-term therapy, where the risk of serious gastrointestinal bleeding is a concern.¹⁴¹  Furthermore, a recent study found that many patients taking Cox-2 inhibitors also take aspirin daily to benefit their heart, which can negate the gastrointestinal benefits associated with the more expensive pain reliever.¹⁴²

“The effectiveness of a drug may depend on the dose.”

There are more than a dozen selective and nonselective nonsteroidal anti-inflammatory drugs (NSAIDs) to relieve pain from such diseases as arthritis.¹⁴³  [See Table III.]  The price per dose ranges from $2.35 per capsule for Cox-2 inhibitors to mere pennies for aspirin.  Cox-2 inhibitors and other nonselective NSAID pain relievers are equally effective at controlling pain, but Cox-2 inhibitors cost more – up to $1,118.51 per year for someone taking 200mg per day of Celebrex, for example.¹⁴⁴  Some experts question whether they are always worth the additional price.¹⁴⁵  In fact, many patients taking the more expensive Cox-2 inhibitors may fare as well on NSAID pain relievers taken with proton pump inhibitors.¹⁴⁶  For example, 20mg Prilosec OTC costing 63 cents per day, if taken with 12 tablets of 200mg Ibuprofen throughout the day, would cost only $343 annually compared with $900 or more for most COX-2 inhibitors.  

Choosing an Allergy Medication. Consumers also may not be getting their money’s worth from expensive, prescription-only, second-generation antihistamines like Zyrtec, Clarinex and Allegra.  On the drug-rating Web site AskAPatient.com, patients tended to give antihistamines a rather low overall rating.¹⁴⁷  Antihistamines received an average score of only 2.6 out of a possible 5 points.  By comparison, people rated Viagra 4.2 out of 5.  In addition, experts often claim Claritin (Loratadine) works only slightly better than a sugar pill.  For instance, in two clinical studies, Loratadine outperformed a placebo by a mere 11 percentage points.¹⁴⁸  The older, first-generation antihistamines work just as well as the newer, second-generation nonsedating antihistamines.  In fact, research has shown that the first-generation antihistamine Chlor-Trimeton (Chlorpheniramine), which is now available over the counter, is more effective than other antihistamines at binding to the histamine molecules and reducing allergy symptoms.  But the molecules of first-generation antihistamines can pass through the blood-brain barrier into the central nervous system, causing sedation.  When it was developing Claritin, Schering-Plough knew that it only had a lucrative product if it did not cause drowsiness.  Thus, it only applied for approval of a 10mg dose since some patients experienced drowsiness at higher doses.¹⁴⁹  Some critics within the FDA worried that the dose was too low to be effective.¹⁵⁰ 

Even though Loratadine’s patent has ran out, generic manufacturers cannot increase the dosage they produce without going through an expensive FDA approval process.  Only the 10mg dose is FDA-approved, so that is the only dosage manufacturers are allowed to sell.¹⁵¹  People who have had little success with Claritin (Loratadine) may find that it is more effective if they take 20mg (2 pills) per day, if they can do so without feeling drowsy.¹⁵²  Some conditions may warrant even higher doses.¹⁵³  [Note: Patients should always consult a physician before taking more than the recommended dosage of any medication.] 

“Competition reduces prices for generic versions of namebrand drugs.”

Those whose allergies are not controlled well with Loratadine or who cannot tolerate side effects such as sedation associated with Benadryl (Diphenhydramine) now have cheaper options.  For example, some of the patents for Allegra (Fexofenadine) recently expired,¹⁵⁴ and the first generic version became available in 2006.¹⁵⁵  Currently, 100 60mg generic Fexofenadine tablets are available at Drugstore.com for $111.08 – $18.90 less than for Allegra.¹⁵⁶  The price for Fexofenadine should drop even lower in the future.  The first company to apply for permission to produce a generic drug is granted a 180-day period of exclusive sales.  Once this six-month period has lapsed, many other companies will enter the market and drive prices down.  When that happens, the price for 100 60mg tablets of Fexofenadine will likely fall below $30, which could happen by late 2007.  Before this occurs, however, some experts expect Allegra’s manufacturer, Aventis Pharmaceuticals, to introduce an OTC version of Allegra to counter the popularity of OTC Claritin.¹⁵⁷  The patent on Zyrtex will also expire in 2007 so a generic (or an OTC) version should appear within the next year or two.¹⁵⁸ 

Experts also point out that inhaled corticosteroids tend to offer quicker symptomatic relief than antihistamines.¹⁵⁹  Flonase (Fluticasone Propionate) is now approved in generic form and will probably be available shortly.¹⁶⁰  Patients spending $50 to $80 per month on expensive prescription antihistamines (such as Allegra, Clarinex and Zyrtec) may find their symptoms of hay fever are better controlled with 1) low-cost OTC Chlorpheniramine, 2) an inhaled nasal corticosteroids such as generic Flonase, or 3) a higher dose of low-cost OTC Loratadine.

Consumers can use one of the methods previously discussed or combine them all.  Total savings can be significant, as the following case studies show.  [For an additional example, see Appendix D for potential savings on anti-anxiety drugs.]

“Smart Shopping: Buy the lowest price generic equivalent of the antiplaque (betablocker) drug Tenormin.”

Case Study: Cardiovascular Drugs. Patients prescribed 50mg of Tenormin daily can save money by comparison shopping for the best price and quantity. [See Table IV.] For instance:

• An NCPA survey found the price of 100 (50mg) doses of Tenormin ranged from $139.74 at Drugstore.com to $125.49 Costco.com.
• But patients could save nearly 90 percent over the lowest cost brand-name drug by switching to the generic alternative Atenolol.
• One hundred doses of the generic drug ranged $26.63 at HomeMed.com $8.29 at Costco.com.
• Finally, consumers could save another 32 percent (from $8.29 to $5.65) by buying larger, 100mg pills and splitting them in half.¹⁶¹

“Smart Shopping: Buy the least expensive alternative therapy for common heartburn.”

Smart buying of this drug lowered the potential overall cost by 96 percent – from a high of $155.66 to a low of $5.65.

Case Study: Heartburn Drugs.  By smart shopping, a consumer prescribed the heartburn drug Nexium can save as much as 87 percent.  [See Table V.]  For example:

If purchased in small quantities (30 capsules at a time) from Drugstore.com, Nexium (20mg) costs about $493.33 per 100 doses; however, a shopper opting for Costco.com would pay $434.67 for 100 capsules, a 12 percent savings.

Buying the generic equivalent of a therapeutic substitute, such as 20mg Omeprazole, would only cost $69.97. 

Furthermore, because Prilosec, a branded form of the generic drug Omeprazole, is now available over the counter, a savvy consumer opting to pay $61.88 for a 100-day supply from Drugstsore.com would save 87 percent off the most expensive option.

Some consumers have turned to foreign Internet pharmacies, mostly based in Canada, to lower their drug bills.¹⁶²  However, due to problems consumers may encounter in purchasing drugs from out-of-country Web sites, these purchases may not be a bargain.  Furthermore, it is illegal to do so since federal law prohibits anyone except the original manufacturer from importing pharmaceuticals.   

“Drugs are not always cheaper in Canada.”

Problem: Many Drugs Aren’t Cheaper in Canada.  Pundits claim that drugs are cheaper in Canada.  However, this is true only for branded drugs still under patent protection.  Generic medications – the ones that represent the best value for most patients – tend to be cheaper in the United States than in Canada.¹⁶³ 

Problem: Drugs May Be Confiscated.  Under the Prescription Drug Marketing Act of 1988, only drug manufacturers can legally import large quantities of drugs into the United States from foreign countries.  Travelers with a prescription can return to the United States with a 90-day supply of legal pharmaceuticals.  Several attempts have been made to change laws to legalize drug importation.  Proposed legislation would not merely make it legal for patients to order medications from Canada – it would allow large-scale importation by pharmacies, drug wholesalers and distributors.  However, even though it is technically illegal, the U.S. Customs Service recently reversed its policy of confiscating small drug shipments being shipped to U.S. citizens for personal use.¹⁶⁴

Currently, however, large quantities of prescription drugs brought back by travelers from abroad are subject to confiscation.  Drugs from overseas pharmacies shipped through the mail are subject to confiscation by postal inspectors.  

“Some foreign Web sites sell fake, expired or adulterated drugs.”

Problem: Seller Misrepresentation.  Consumers who think they are buying from Internet pharmacies in Canada may actually be buying from the Web sites of substandard pharmacies in less-developed nations.  A study in the Annals of Internal Medicine found that only about 11 percent of Internet pharmacies revealed the actual location of their business.¹⁶⁵  It is very difficult to ascertain the exact location of online pharmacies.  Internet addresses indicating the country of origin are often falsified.¹⁶⁶  For instance, many Web sites registered as Canadian pharmacies are far from Canada.  The Web site CanadaRXfree.com appears to be a Canadian pharmacy, but the name is registered to an address in Mexico City.  Another Web site, TrustedCanadianPharmacy.com was registered in Barbados.¹⁶⁷  Many others have covered their tracks so well it is impossible to tell where they are located.  A more recent study found about one-third of Internet pharmacies claiming to be Canadian were located elsewhere.¹⁶⁸ 

Problem: Drug Safety and Efficacy.  Another problem is that not all drugs sold on Canadian Web sites come from developed nations with FDA-type safeguards.  One Canadian Web site was selling drugs made in Mexico.¹⁶⁹  In fact, according to Marv Shepherd, director of the Center for Pharmacoeconomic Studies at the University of Texas at Austin, Canada obtains drugs “from over 100 countries including Ecuador, Mexico, Brazil and China.”¹⁷⁰ 

An article in Science illustrates how drugs manufactured in some countries may not be of the same quality as those made domestically.  The drug Zocor (Simvastatin), a powerful cholesterol-lowering drug made in the United States, was compared to generic copies purchased over the Internet from Mexico, Thailand, India and Brazil.  Analysis of the imported versions showed that the active ingredients were not uniformly mixed with inert fillers in the tablets.  These lumps may not be absorbed into the bloodstream at the same rate, affecting the efficacy of the medication.¹⁷¹  Furthermore, due to this lumping, consumers who split tablets would not receive a consistent dose, making the medication less effective.  About two-thirds of countries in which drugs are manufactured either do not have or do not enforce regulatory controls comparable to the United States.  And about half the countries that have controls lack the ability to enforce them.¹⁷²  Consequently, officials say it is impossible for the FDA to vouch for the safety and authenticity of drugs shipped from abroad.¹⁷³ 

Problem: Counterfeit Drugs.  The 1988 law that restricted drug imports was passed in response to smuggled counterfeit drugs that found their way onto some U.S. pharmacy shelves.¹⁷⁴   In one case, U.S. customs inspectors seized 1,800 counterfeit bottles of the antibiotic Ceclor.  In another case, about two million counterfeit birth control pills containing little or no active ingredient were smuggled into the United States.

Counterfeit and fake drugs are a growing problem.¹⁷⁵  Global sales of counterfeit drugs are predicted to reach $75 billion by 2010.¹⁷⁶  As more people order drugs from unknown Web sites abroad, this is likely to increase.  Recently, for example:

• Several Web sites were found to be selling contraceptive patches containing no active ingredients.¹⁷⁷ 
• When the U.S. Government Accountability Office made straw purchases from 68 Web-based pharmacies, in four cases it received counterfeit drugs and in six cases never received the order for which it paid.¹⁷⁸
• Fourteen Web sites from which the GAO made purchases were under investigation for selling counterfeit drugs.¹⁷⁹

“Drug price controls limit foreign supplies.”

Over the past few years, the number of counterfeit drug cases investigated by the FDA has risen four-fold.¹⁸⁰  As more Americans turn to foreign sources for prescription medications, the market in counterfeit drugs is bound to grow.  And of course, drugs obtained out of the country at low prices are not bargains if they jeopardize the patients’ health.

Problem: Drug Availability.  Some brand-name drugs are cheaper in other countries because prices are controlled.  Due to price controls, there may be only a limited supply available.  In fact, in some countries, if a new, more effective (and expensive) medication has not been added to the list of drugs the government will pay for, it may not be available to most patients in that country.  As a result, drug distributors may stock few of these medications, or they are simply unavailable.  At just under $25 billion dollars, prescription drug expenditures in Canada are only a fraction of spending in the United States.¹⁸¹  The United States is simply too populous for Canada to fulfill all our drug needs.¹⁸²  Consider:

• Americans could exhaust the entire supply of Canadian drugs in just 38 days.
• Canada would need to boost its supply of drugs by a factor of five just to meet the needs of elderly Americans.

American-manufactured drugs are sold in some other national markets at lower prices to compensate for lower average incomes in those countries.  Pharmaceutical companies are financially able to do so because they can recoup the cost of drug development in the United States.  Importation would tend to equalize drug prices worldwide – at a level much closer to, if not the same as, current prices found in the United States.  Less prosperous countries would buy fewer American-made drugs.  They could also follow India’s lead by violating patents and producing low-priced copies for their own citizens.

There are programs to assist patients who must pay some or all of their drug bills.  In addition to smart shopping, patients can save by taking advantage of these opportunities.

Pharmaceutical Company Assistance Programs.  Many drug companies have programs to assist low-income, disabled or elderly individuals.¹⁸³  For example, the Partnership for Prescription Assistance is a national organization of drug companies, physicians and patient advocates.  Qualifications vary but generally include uninsured individuals earning less than 200 percent of the federal poverty level.  Patients who want to find out if they are eligible can begin on the Web site www.pparx.org.  Patients can check to see whether or not a medication they are taking is part of a low-cost partnership program or patient assistance program.  Multiple medications can be entered and a simple form assesses eligibility.  Some people may be eligible for a patient assistance program for a specific medication.  Or they may be eligible for a low-cost drug card discount program, which patients can use at their local pharmacy. 

One discount drug card program is called Together Rx Access.  The program is free and covers more than 150 different drugs. Participating companies include Novartis, Abbott, AstraZeneca, Aventis, Ortho-McNiel, Bristol-Myers Squibb, GlaxoSmithKline and Janssen.  Eligibility is limited to those who do not qualify for Medicare and do not have drug coverage through a public or private program.  Income cannot exceed $30,000 for an individual, $40,000 for a family of two, $50,000 for a family of three or $60,000 for a family of four.  Most participants save 25 percent to 40 percent on brand-name drugs.¹⁸⁴ 

“Many states and drug companies have programs to assist with drug prices.”

State Drug Assistance Programs.  Almost three-fourths of U.S. states have created or authorized a drug assistance program for low-income, elderly and/or disabled patients.  Three-fifths of the states provide direct subsidies, while two-fifths offer drug discounts.¹⁸⁵  In addition, all states provide drug subsidies under the Medicaid program.  Patients can find out if they qualify for a government or private drug assistance plan by filling out the questionnaire on the Web site of the National Council on Aging (http://www.benefitscheckup.com/).

Drug therapy is the most effective treatment for many illnesses, but drugs can be expensive.  The cost can be especially high for seniors with chronic conditions, and those without health insurance or drug coverage.  Yet most patients can easily lower their annual medicine bills through smart shopping.  Patients who have prescription drug coverage have little incentive to be wise consumers.  Still, they should note that while drug coverage by an insurer makes the high cost of pharmaceuticals easier to bear at the time of purchase, yearly premium increases are partly due to the lack of cost control.

Consumers can use a number of strategies to lower their drug costs.  Which ones are appropriate will depend on their medical conditions and circumstances.  But if patients treat drugs like other consumer goods – by informing themselves, shopping among alternatives and comparing prices – they are almost assured of lower drug bills.

NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.

1. In 2005 Americans spent more than $230.3 billion on prescription drugs.  Over-the-counter drugs probably increased total expenditure by an additional $20 billion.  See “Industry Facts-at-a-Glance, Rx Sales 2005,” National Association of Chain Drug Stores.  Available at http://www.nacds.org/wmspage.cfm?parm1=507#retail.  Accessed June 6, 2006.  Consumer Healthcare Products Association put yearly OTC drug sales at $15 billion (excluding Wal-Mart).
2. See, for example, James M. Hoffman, et al., “Projecting Future Drug Expenditures – 2004,” American Journal of Health-System Pharmacists, Vol. 61, No. 2, February 2004, pages 145-158.
3. A drug was either provided or prescribed in 64.8 percent of office visits.  The average number of prescriptions written is 2.25 per patient when they receive one during the course of an office visit.  David A. Woodwell and Donald K. Cherry, “National Ambulatory Medical Care Survey: 2002 Summary,” National Center for Health Statistics, Advance Data from Vital and Health Statistics, No. 346, August 26, 2004.
4. See “Industry Facts-at-a-Glance,” National Association of Chain Drug Stores.  Available at http://www.nacds.org/wmspage.cfm?parm1=507#retail.  Accessed June 6, 2006.
5. Ibid.
6. “2002 Missouri Prescription Drug Pricing Survey,” Public Issue Management, 2002. 
7. Al Tompkins, “Monday Edition: Generic Drug Prices,” KHOU (News 11, Houston), November 30, 2003.
8. Fred Gebhart, “Chain Stores Top Generic Price Charts,” Drug Topics, Drug Topics Supplements, April 3, 2006.  Also see Kathy Times, “Independents Often Beat Chains in Prescription Prices,” NBC13.com, November 25, 2002.
9. Although some of the following anecdotes are from regional surveys conducted by the news media, the results are consistent with a recent multistate survey by a research institute.  See RetireSafe.org, “Take the Rx Challenge: 2003 Retail Pharmacy Pricing Survey,” Council for Government Reform, June 2003.
10. Barbara West, “Massive Mark-Ups Found on Generic Drugs,” WFTV (Channel 9, Orlando), October 21, 2002.
11. Steve Wilson, “Steve Wilson Exposes Huge Prescription Drug Price Markups,” WXYZ.com (Channel 7 Detroit), February 6, 2004.
12. Editorial, “Generic Meds Not Panacea Some Believe,” Iowa City Press-Citizen, June 18, 2003.
13. ABC Action News, “Pill Patrol: Generic Drugs Marked Up as Much as 3,000 Percent,” abcactionnews.com (WFTS ABC Action News Tampa, Fla.), November 27, 2003.
14. Prices verified October 16, 2006 at MyFloridaRx.com.
15. Prices verified on October 16, 2006 on DestinationRx.com.
16. Julius A. Karash, “The $4 Drug Gambit,” Kansas City Star, October 27, 2006.
17. The 314 drugs includes different doses and forms of the same medications.  The number of chemically distinct medications is closer to 150. For a list of generic drugs and doses that Wal-Mart will sell at low prices, see http://www.usatoday.com/money/industries/health/drugs/walmart-druglist.pdf.  
18. Julie Appleby, “Target Says It Will Match Wal-Mart’s $4 Generic Drug Price,” USA Today, September 21,2006.
19. Wegmans has stores in New York, Pennsylvania, New Jersey, Virginia and Maryland. See http://www.wegmans.com/about/storeLocator/.
20. “Wal-Mart Adds 12 States to $4 Generic Drug Plan,” USA Today, October 26, 2006. Available at http://www.usatoday.com/money/industries/retail/2006-10-26-walmart-drugs_x.htm.
21. The five states include Ohio, Illinois, Indiana, Kentucky and Michigan. Tracy Turner, “Supermarkets Offer Generic Drugs Free as Lure,” Columbus Dispatch, October 25, 2006. Available at http://www.dispatch.com/health/health.php?story=dispatch/2006/10/25/20061025-A1-02.html.
22. Tracy Turner, “Supermarkets Offer Generic Drugs Free as Lure.”
23. Price verified on October 16, 2006 on MyFloridaRx.com.
24. Ibid.
25. “Bid for Rx Web Site Now Online Using Auctions to Reduce Prescription Drug Costs,” PharmaLive.com, August 17, 2006.
26. Joe Vanden Plas, “Will BidRx Start a Drug Price War?” Wisconsin Technology Network, August 2, 2006.  Available at http://wistechnology.com/article.php?id=3196.  Accessed September 6, 2006.
27. Newt Gingrich and James Frogue, “Sticker Shock Could Help with Healthcare Costs,” The Hill, March 8, 2006.  Also see “A Proposal for an Electronic Comparison System and Personal Health Formulary: Implementing a ‘Travelocity-style’ Model of Prescription Drug Purchasing,” Center for Health Transformation, Issue Brief, January 6, 2004.
28. Newt Gingrich, “Taking Health Care to the Next Level,” Des Moines Register, September 1, 2005.
29. The Web site is www.Rxaminer.com; address confirmed on October 16, 2006.
30. John D. Piette, Michele Heisler and Todd H. Wagner, “Cost-Related Medication Underuse: Do Patients with Chronic Illnesses Tell Their Doctors?” Archives of Internal Medicine, Vol.164, No. 16, September 13, 2004, pages 1,749-1,755.
31. Jeffrey A. Lieberman, et al. (Clinical Antipsychotic Trials of Intervention Effectiveness Investigators), “Effectiveness of Antipsychotic Drugs in Patients with Chronic Schizophrenia,” New England Journal of Medicine, Vol. No. September 22, 2005, pages 1,209-1,223.
32. There are two types of antihistamines: first-generation (sedating) and second-generation (non-sedating).
33. First-generation antihistamines also include Clistin (Carbinoxamine), Tavist (Clemastine), Chlor-Trimeton (Chlorpheniramine) and Dimetane (Brompheniramine).
34. Philipp S. Muether and Jack M. Gwaltney Jr., “Variant Effect of First- and Second-Generation Antihistamines as Clues to Their Mechanism of Action on the Sneeze Reflex in the Common Cold,” Clinical Infectious Diseases, November 1, 2001, pages 1,483-88.
35. Ibid.
36. Allegra was 60mg, Zyrtec 10mg and Clarinex 5mg.  Prices surveyed at Costco.com on October 2006.
37. Prices surveyed at Drugstore.com on October 2006.
38. Price of 10mg Claritin for 100 doses purchased 50 tablets at a time from Walgreens.com.  Price surveyed November 2006.  The price for Loratadine (10mg) was based on buying two bottles of 150 tablets packaged together.  Prices were surveyed on May 24, 2006 at Sam’s Club (Greenville at Park Lane), Dallas, Texas.
39. Benadryl (25mg) is available in qualities of 100 for $14.29 and generic diphenhydramine (25mg) is available in quantities of 200 for $7.79 at Drugstore.com.  Price sampled on November 2006.
40. Dose for Chlorpheniramine tends to be from 4mg to 12mg.  Raymond Woosley conducted research which led him to believe that it is effective at doses low enough to be nonsedating.  See Matthew Herper, “Five Generic Drugs, Cheap But Ignored,” Forbes.com, November 2, 2001.  Available at http://www.forbes.com/2001/11/02/1102drugs.html.  Accessed November 2006.  Also see Stephen Hall, “The Claritin Effect: Prescription for Profit,” New York Times Magazine, March 11, 2001.
41. Drugstore.com.  Price surveyed June 7, 2006.
42. G.G. Kay and A.G. Harris, “Loratadine: A Non-Sedating Antihistamine; Review of its Effects on Cognition, Psychomotor Performance, Mood and Sedation,” Clinical & Experimental Allergy, Vol. 29, Supplement 3, July 1999, pages 147-50.  Also see G.G. Kay et al., “Initial and Steady-State Effects of Diphenhydramine and Loratadine on Sedation, Cognition, Mood, and Psychomotor Performance,” Archives of Internal Medicine, Vol. 10, No. 157, November 1997, pages 2350-56.
43. Calculation was based on $7.79 for 200 tablets.  Cost per tablet would vary based on shipping and dosage.  This is especially true of cheaper medications like OTC drugs. 
44. “Treating Allergies, Hay Fever, and Hives: The Antihistamines,” Consumers Union, Consumer Reports Best Buy Drugs, August 2005.  Available at http://www.crbestbuydrugs.org/PDFs/Antihistamines.pdf.  Accessed June 6, 2006.
45. Purportedly, Prilosec cures 94 percent of ulcers after four weeks of use.  The comparable rate for the older H₂ antagonists, such as Zantax, is 70 percent to 80 percent.  Merrill Goozner, The $800 Million Pill: The Truth Behind the Cost of New Drugs (Berkley, Calif.: University of California Press, 2004), chapter 8.
46. IMS Health, November 2003, cited in Michelle L. Kirsche, “Outlook Bright for 2004 Blockbusters – Chain Pharmacy – Boost in Prescription Drug Sales Is Anticipated as Result of New Coverage Provided to 35 Percent to 40 Percent of U.S. Seniors Currently without Prescription Drug Insurance,” Drug Store News, January 19, 2004.  Data for October 2002 to September 2003.
47. Gardiner Harris, “F.D.A. Approves Over-Counter Sales of Top Ulcer Drug,” New York Times, June 21, 2003.
48. Purchasing 100 20mg doses of Nexium (30 doses at a time) from Drugstore.com costs $493.33.  Price sampled on November 2006.
49. Purchasing 100 30mg doses of Prevacid (30 doses at a time) from Drugstore.com costs $509.97.  Price sampled on November 2006.
50. Purchasing 100 doses of Nexium (30 capsules at a time) would cost $436.57 at Costco.com.  Switching to Protonix and purchasing larger quantities (40 at a time), Protonix would bring the cost of 100 doses down to $353.16 at RxUSA.com. 
51. The price for 100 capsules of Prilosec 20mg at Costco.com is $61.88 if purchased 42 at a time.  Price was verified on November 2006.  Consumers Union rates Prilosec a Best Buy.  See “Drugs to Treat Heartburn, Ulcers and Stomach Acid Reflux: The Proton Pump Inhibitors,” Consumers Union, Consumer Reports Best Buy Drugs, November 2004.  Available at http://www.crbestbuydrugs.org/PDFs/Antihistamines.pdf. Accessed June 6, 2006.
52. Zantac (Ranitidine), Pepcid (Famotidine) and Tagamet (Cimetidine) are histamine H₂-receptor antagonists.
53. Ranitidine is available over the counter in 75mg tablets but is often prescribed in 150mg or even 300mg doses.
54. In this example, purchasing 100 150mg doses would require buying 240 75mg tablets and taking two at a time.  This is often more economical than purchasing the 150mg prescription strength.  Price Members Mark Ranitidine, available in packages of 240 75mg tablets, costs $5.88 at Sam’s Club, 8282 Park Lane, Dallas, Texas.  Price verified on November 2006. 
55. Price verified June 6, 2006.
56. Purchased in quantities of 260 10mg tablets for $7.42 at Sam’s Club, 8282 Park Lane, Dallas, Texas.  A 40mg dose requires four tablets, for a cost of 11.42 cents per dose. Price verified June 6, 2006.  Similar price at Costco.com November 2006. 
57. Annette Tuffs, “Only 6% of Drug Advertising Material Is Supported by Evidence,” British Medical Journal, Vol. 328, No. 7438, February 28, 2004. 
58. Pat Kelly, “DTC Advertising’s Benefits Far Outweigh Its Imperfections,” Health Affairs, Web Exclusive, April 28, 2004; Joel S. Weissman et al., “Physicians Report on Patient Encounters Involving Direct-to-Consumer Advertising,” Health Affairs, Web Exclusive, April 28, 2004.
59. An exception to this rule is direct-to-consumer advertising of OTC products.  A drug company launching a name- brand drug for use over the counter may well advertise to gain market share for their product.  Here again, consumers should be wary.  Name-brand OTC products generally sell for more than their generic competitors’ products.
60. Bruce Japsen, “AMA Mulls Backing Limits on TV Drug Ads,” Chicago Tribune, June 1, 2006.
61. In 2000, about $7.9 billion in drugs were distributed free as samples – about half of the $15.7 billion the pharmaceutical industry spent on marketing.  The retail value of free samples increased to $16 billion by 2004.  Drug companies employ an estimated 90,000 drug industry reps, and spent $22 billion in 2003 to inform physicians about their products and influence prescribing behavior.  For an exposé on many of the drug industry’s marketing efforts, see Jeff Gammage and Karl Stark, “Under the Influence,” Philadelphia Inquirer, March 9, 2002.  Also see Liz Szabo, “Health Systems Cutting Costs by Closing Door on Drug Reps,” USA Today, August 25, 2004.
62. Leigh Page, “More Clinics Ban Drug Samples, Citing Cost, Safety Concerns,” American Medical News, October 16, 2000.
63. James Frederick, “Mandatory Mail Battle Heats Up as Michigan, Chains Lay Gauntlet,” Drug Store News, February 16, 2004.
64. Price surveys conducted June 1, 2004.
65. See Diane West, “Mail-Order Rx Chips Away at Retail Sales,” Drug Store News, May 20, 2002.
66. All prices are for Atenolol 50mg.  Prices surveyed October 16, 2006, at DestinationRx.com.
67. Prices verified on October 16, 2006, at Drugstore.com.
68. Purchase made May 24, 2006, at Sam’s Club, Greenville at Park Lane, Dallas, Texas.
69. Price verified with DestinationRx.com on June 5, 2006.
70. Amanda Gardner, “How to Break a Blockbuster Drug in Half: Man Invents Device to Cut Odd-Shaped Viagra Pill,” HealthScout News, December 5, 2002.
71. Information obtained from Parrish Blaszka (communications director), Precision Pill Splitters (www.precisionpillsplitters.com).
72. Ibid.  A pill bed is a template designed for the exact shape and thickness of a specific dose of medications.  According to the manufacturer, some common medications that may be candidates for quartering are Accupril, aspirin, Fosamaxx, Imitrex Oral, Levaquin, Lipitor, Norvasc, Pravachol, Viagra, Vioxx, Zocor, Zyprexa and Zyrtec.
73. “‘Pill-Splitting’ Is a Patient-Safety Concern,” National Association of Chain Drug Stores, Issue Brief, October 2004.
74. James E. Polli, Sharon Kim and Brian R. Martin, “Weight Uniformity of Split Tablets Required by a Veterans Affairs Policy,” Journal of Managed Care Pharmacy, Vol. 8, No. 5, 2003, pages 401-7.
75. Randal S. Stafford and David C. Radley, “The Potential of Pill Splitting to Achieve Cost Savings,” American Journal of Managed Care, Vol. 8, No. 8, August 2002, pages 706-12.
76. Susan J. Landers, “11 Pills Score as Candidates for Splitting,” American Medical News, September 23/30, 2002.
77. “Bitter Pill: The Rising Prices of Prescription Drugs for Older Americans,” Families USA, Publication No. 02-104, June 2002.
78. William M. Welch, “VA Offers Medicines at Bargain Prices,” USA Today, June 18, 2003.
79. Aidan Hollis, “Closing the FDA’s Orange Book,” Regulation, Winter 2001.
80. The average cost for generic prescriptions was $12.82 in 1993, compared to $35.28 for branded medications.  By 2003 this had risen to $30.58 and $83.66 respectively.  See “Retail Prescription Prices for Generic Drugs,” National Association of Chain Drug Stores, Issue Brief, October 2004.  Also see “Industry Facts-at-a-Glance,” National Association of Chain Drug Stores.  Available at http://www.nacds.org/wmspage.cfm?parm1=507#retail.  Accessed June 6, 2006.
81. James Frederick, “Stars Align for Generic Drug Industry – Special Report: Generic Drugs,” Drug Store News, February 16, 2004.
82. Fred Gebhart, “Major Drugs Lose Patent Protection in 2006,” Drug Topics, Generic Supplement, April 3, 2006.
83. Ibid.
84. Leila Abboud, “Bush Acts to Speed Generics to Market,” Wall Street Journal, June 12, 2003, page A3.
85. The law became effective August 19, 2003.  See Joel B. Finkelstein, “Feds Fire on Patent Law that Delays Generics,” American Medical News, June 30, 2003. 
86. If Zocor is approved for sale in generic form, the price will likely fall 80 percent by early to mid 2007.  However, the FDA has a backlog of about 800 drugs awaiting generic approval.  About 93 percent of generic applications fail on the first review whereas 59 percent fail their second review.  See Tony Pugh (Knight-Ridder), “Generic Drug’s Path to Retail Market Often Long and Contentious,” Kansas City Star, April 27, 2006.
87. Paula Moyer, “Huge Fight Expected When Statin Patents Expire,” Drug Topics, Supplement, August 8, 2005.
88. Thomas Ginsberg, “A Shake-Up beyond Merck, Zocor’s Patent Protection Ends,” Philadelphia Inquirer, June 18, 2006, page E01.
89. The patent on Pravachol is also set to expire in 2006.  See “The Statin Drugs,” Consumer Reports Best Buy Drugs, January 2006.  Available at http://www.crbestbuydrugs.org/PDFs/StatinAnalysis.pdf.  Accessed June 20, 2006.
90. Steve Lohr, “Smart Care via a Mouse, but What Will It Cost?” New York Times, August 20, 2006.
91. “Fact Sheet: The Use of Over-the-Counter Medicines,” National Council on Patient Information and Education, January 2002.
92. Harris Interactive, “Attitudes and Beliefs about the Use of Over-the-Counter Medicines: A Dose of Reality,” National Council on Patient Information and Education (NCPIE), January 2002.
93. Ipsos, “Doctor Recommendations of Over-The-Counter Drugs Boost Consumer Loyalty,” PharmTrends, September 23, 2002.
94. Drugs such as marijuana, cocaine and heroin were illegal to sell at all.  However, the class of drugs known as prescription drugs did not exist.  Patients relied on drugstores to advise them on the appropriate drugs to purchase.  Physicians also sold drugs directly to patients.
95. Durham-Humphrey Amendment created a class of drugs that required medical supervision and restricted sales to persons who had a prescription from a medical practitioner.  See “Milestones in U.S. Food and Drug Law History,” U.S. Food and Drug Administration, FDA Backgrounder, May 3, 1999.
96. “The Economic and Public Health Value of Self-Medication,” Association of the European Self-Medication Industry (AESGP), June 2004.  Available at http://www.aesgp.be/ephv/2004study.pdf.  Accessed June 14, 2006.
97. This section is based on Paul Kittinger and Devon Herrick, “Patient Power: Over-the-Counter Drugs,” National Center for Policy Analysis, Brief Analysis No. 524, August 22, 2005.
98. Joshua P. Cohen, Cherie Paquette and Catherine P. Cairns, “Switching Prescription Drugs to Over the Counter,” British Medical Journal, Vol. 330, No. 7481, January 1, 2005, pages 39-41.
99. “Ingredients and Dosages Transferred from Rx-to-OTC Status (or New OTC Approvals) by the Food and Drug Administration since 1975,” Consumer Healthcare Products Association, January 26, 2006.  Available at  http://www.chpa-info.org/NR/rdonlyres/E33F414C-24FE-4F34-B6FD-149D16DCE2FA/0/switch_list.pdf.  Accessed June 6, 2006.
100. Sandra Levy, “Should Orlistat, Triptans Go OTC? R.Ph.s Speak Out,” Drug Topics, February 6, 2006.
101. Gaye Perry and Peter Mansell, “Rx-to-OTC Switching: The Way Forward for the Global Pharmaceutical Industry?” Urch Publishing Ltd., research report, September 2000.
102. Holly M. Spencer, “The Rx-to-OTC Switch of Claritin, Allegra, and Zyrtec: An Unprecedented FDA Response to Petitioners and the Protection of Public Health,” American University Law Review, pages 999-1,050.
103. The prices of H2 antagonists fell by two-thirds after they were switched to OTC status.  See Gail D. Newton et al., “New OTC Drugs and Devices 2001: A Selective Review,” Journal of the American Pharmaceutical Association, Vol. 42, No. 2, 2002, pages 267-77.
104. Prescription sales of Claritin totaled $3.2 billion in 2001. Paul N. Jaber, Jr., “Schering-Plough’s Trap,” The Motley Fool, Commentary, October 7, 2003.  Available at http://www.fool.com/news/commentary/2003/commentary031007pnj.htm.  Accessed October 30, 2006.
105. David Vaczek, “Top 200 Prescription Drugs of 2003,” Pharmacy Times, undated, July 2004. Available at http://www.pharmacytimes.com/article.cfm?ID=1314.  Accessed August 21, 2004.  Due both to tightening of health plan requirements and the movement of Claritin to the OTC market, sales of nonsedating antihistamines fell 22 percent from July 2003 to June 2004.  See Jane Erikson, “Allergy Drug Copays Rising,” Arizona Daily Star, August 18, 2004. Available at http://www.dailystar.com/dailystar/relatedarticles/34243.php.
106. Price surveyed August 2002.
107. Sixty Claritin tablets cost $31.39 at Costco.com.  Prices surveyed June 6, 2006.  The price for Loratadine (10mg) was based on buying two bottles of 150 tablets packaged together.  Prices were surveyed on May 24, 2006, at Sam’s Club (Greenville at Park Lane), Dallas, Texas.
108. Price surveyed May 2003.
109. Price surveyed November 2006.
110. Kenneth I. Kaitin (editor), “Switching Drugs from Prescription to OTC Status on Rise in U.S. and EU,” Tufts Center for the Study of Drug Development, Impact Report, Vol. 5, No. 5, September/October 2003.  Also see “Legal Classification Status of Selected Ingredients Worldwide,” AESGP (European Self-Medication Industry), March 31, 2006. Available at http://www.aesgp.be/Ingredients/WorldTable.pdf.  Accessed June 6, 2006.
111. This section is based on Devon Herrick, “Patient Power: Access to Drugs,” National Center for Policy Analysis, Brief Analysis No. 500, February 10, 2005.
112. Michelle Roberts, “Statin-Fortified Drinking Water?” BBC News, August 1, 2004.
113. Zosia Kmietowicz, “Statins are the New Aspirin, Oxford Researchers Say,” British Medical Journal, News, Vol. 323, No. 7322, November 17, 2001.
114. “Pharmacists to Sell Heart Drugs,” BBC News, May 12, 2004.
115. Jerry Avorn, “FDA Standards – Good Enough for Government Work?” New England Journal of Medicine, Vol. 353, No. 10, September 8, 2005, pages 969-972.
116. In some cases a newer drug is considered an improvement not because it works better, but because its side effects are better tolerated.  An example of this is first-generation (sedating) antihistamines and second-generation (non-sedating) antihistamines.
117. Peter J. Neumann, Allison B. Rosen and Milton C. Weinstein, “Medicare and Cost-Effectiveness Analysis,” New England Journal of Medicine, Vol. 353, No. 14, October 6, 2005, pages 1516-22.
118. Steven D. Findlay, “Bringing the DERP to Consumers: ‘Consumer Reports Best Buy Drugs,'” Health Affairs, Web Exclusive W283, June 6, 2006.  Available at http://content.healthaffairs.org/cgi/reprint/hlthaff.25.w283v1. Accessed June 6, 2006. 
119. See Consumer Reports Best Buy Drugs.  Available at http://www.crbestbuydrugs.org.  Accessed June 6, 2006.
120. Web site AskAPatient.com.
121. Bill Hogan, “The Pharmacist Who Says No to Drugs,” AARP Bulletin Online, September 2004.  Accessed September 8, 2004. Available: www.aarp.org/bulletin/prescription/Articles/a2004-08-26-pharmacist.html.
122. Margie Rauch Goulding, “Inappropriate Medication Prescribing for Elderly Ambulatory Patients,” Archives of Internal Medicine, Vol. 164, No. 3, February 9, 2004, pages 305-312.
123. Lesley H. Curtis et al., “Inappropriate Prescribing for Elderly Americans in a Large Outpatient Population,” Archives of Internal Medicine, Vol. 164, No. 15, August 9/23, 2004, pages 1,621-25.
124. Ibid.  Panel members defined drugs to be inappropriate if risk of adverse reactions outweighed potential benefits.  Also see “1 in 12 Drugs Inappropriately Prescribed to Elderly,” Healthfacts, March 2004.   
125. Spyros Andreopoulos, “A Nation of Hypochondriacs?” San Francisco Chronicle, November 29, 2004.
126. “Men with ED Achieve Sexual Satisfaction with Viagra, and Better Relationships,” MedicalNewsToday.com, December 8, 2004.
127. On the Web site AskaPatient.com, patients rated Propecia 2.6 out of 5 for effectiveness.
128. Jawahar L. Mehta et al., “Comparison of Mortality Rates in Statin Users versus Nonstatin Users in a United States Veteran Population,” American Journal of Cardiology, Vol. 98, No. 7, October 1, 2006, pages 923-28.
129. “Everything You Need to Know about Statin Drugs – Almost,” Healthfacts, November 2003. 
130. PREMIER Collaborative Research Group, “Effects of Comprehensive Lifestyle Modification on Blood Pressure Control,” Journal of the American Medical Association, Vol. 289, No. 16, April 2003, pages 2,083-93.
131. Rena R. Wing et al., “Behavioral Science Research in Diabetes: Lifestyle Changes Related to Obesity, Eating Behavior, and Physical Activity,” Diabetes Care, January 2001.
132. Marian McDonagh and Susan Carson, “Drug Class Review on Proton Pump Inhibitors,” Oregon Evidence-based Practice Center, Oregon Health & Science University, July 2006. 
133. “Diuretics Proved to be Superior to Other, More Expensive Anti-Hypertensive Drugs,” Healthfacts, January 2003. 
134. Philip B. Gorelick, “Aspirin and Ticlopidine for Prevention of Recurrent Stroke in Black Patients,” Journal of the American Medical Association, June 11, 2003, pages 2,947-57.
135. Price comparisons were obtained from DestinationRX.com on October 27, 2006.  A patient taking two (250mg) tablets per day purchased in quantity (such as 100 tablets) could spend at little as $23.84 at RxUSA.com compared to $62.20 per month at AARP. 
136. When combination therapy was taken at the first sign of a migraine headache.  See Patrice G.W. Norton, “OTC Product Beats Sumatriptan for Early Migraine: Study of 171 Patients – Clinical Rounds,” OB/GYN News, September 15, 2003.
137. Ibid.
138. Gastroenterologists say most patients with GERD should first try H2-receptor antagonists.  See Marian McDonagh and Susan Carson, “Drug Class Review on Proton Pump Inhibitors,” Oregon Evidence-based Practice Center, Oregon Health & Science University, July 2006.
139. Bextra and Celebrex have been withdrawn, leaving Celebrex as the only available Cox-2 inhibitor.  Not all experts agree that Cox-2 inhibitors are more risky than older nonsteroidal anti-inflammatory drugs (NSAIDS) such as Ibuprofen and Naproxen. For instance, John Calfee, a scholar with the American Enterprise Institute, points out that between 10,000 and 20,000 people die annually of complications from taking older NSAIDS.  See John Calfee, “The Vioxx Fallout,” American Enterprise Institute for Public Policy Research, Health Policy Outlook, September/October 2005.
140. Emily R. Cox et al., “Prescribing COX-2s for Patients New to Cyclo-Oxygenase Inhibition Therapy,” American Journal of Managed Care, Vol. 9, No. 11, November 2003, pages 735-42.  For a layman’s discussion see “A New Study from Express Scripts Inc. Indicates that Patients Are Being Prescribed Expensive Cox-2 Inhibitor Drugs Even When They Have No Increased Risk for Gastrointestinal Events,” Drug Cost Management Report, November 21, 2003.   
141. Theresa Agovino (Associated Press), “Study: Pricey Drugs Overprescribed Oft-Hyped Pain Relievers Often Found Unnecessary, Raise Health Plan Costs,” Detroit News, June 4, 2002.
142. “Over Half of COX-2 Patients Take Aspirin, Possibly Negating the COX-2 GI Benefits,” Medi-Lexicon (pharma-lexicon.com), June 15, 2004.  For a discussion see Emily R. Cox, Mark Frisse, Andrew Behm and Kathleen A. Fairman, “Over-the-Counter Pain Reliever and Aspirin Use Within a Sample of Long-Term Cyclo-Oxygenase 2 Users,” Archives of Internal Medicine, Vol. 164, No. 11, June 14, 2004. 
143. For a comparison of pain relievers to treat arthritis, see Mitchel L. Zoler and Winnie Anne Imperio, “Drug Update: NSAIDs for Rheumatoid Arthritis,” OB/GYN News, June 1, 2000.
144. Emily R. Cox, Brenda R. Motheral and Doug Mager, “Verification of a Decision Analytic Model Assumption Using Real-World Practice Data: Implications for the Cost Effectiveness of Cyclo-Oxygenase 2 Inhibitors (COX-2s),”American Journal of Managed Care, Vol. 9, No. 12, December 2003, pages 785-94. 
145. Vioxx was pulled off the market by its maker Merck & Co in September 2004, and Bextra was withdrawn from the market by Pfizer in April 2005.
146. Francis K.L. Chan et al., “Celecoxib versus Diclofenac and Omeprazole in Reducing the Risk of Recurrent Ulcer Bleeding in Patients with Arthritis,” New England Journal of Medicine, Vol. 347, No. 26, December 26, 2002, pages 2,104-10; M. B. Kimmey and A. Lanas, “Appropriate Use of Proton Pump Inhibitors with Traditional Nonsteroidal Anti-inflammatory Drugs and COX-2 Selective Inhibitors,” Alimentary Pharmacology & Therapeutics, Vol. 19, No. 1, February 2004, pages 60-65.  Also see American College of Gastroenterology 68th Annual Scientific Meeting and Postgraduate Course, reviewed in Charlene Laino, “Proton Pump Inhibitor May Help Prevent Ulcers in Chronic NSAID Users,” Medscape Medical News, October 15, 2003.
147. On AskAPatient.com, 837 rated antihistamines as average score of 2.6 out of a possible 5 points.  By comparison, 59 people voting rated Viagra an average of 4.2.
148. Stephen Hall, “The Claritin Effect: Prescription for Profit,” New York Times Magazine, March 11, 2001.
149. Ibid.
150. Ibid. According to a New York Times Magazine exposé, the FDA medical officer assigned to review Loratadine’s efficacy, Sherwin Straus thought the 10mg dose was about four times too low.  He thought a 40mg dose was the “minimally effective” dose to relieve allergy symptoms.
151. The FDA also approved a 10mg dose that incorporated pseudoephedrine as Claritin-D.
152. A. Pineyro-Lopez et al., “Bioavailability of Two Oral Formulations of Loratadine 20mg with Concomitant Ketoconazole: An Open-Label, Randomized, Two-Period Crossover Comparison in Healthy Mexican Adult Volunteers,” Clinical Therapeutics, Vol. 28, No. 1, January 2006, pages 110-115.  Also see “Generic Version of Allergy Drug Allegra (fexofenadine) Now Available,” Consumer Reports Best Buy Drugs, 2005.
153. Betsy Bates, “Chronic Urticaria: Boost Antihistamine Dosage,” Family Practice News, March 1, 2001.
154. Aventis claimed in legal proceedings that not all of the numerous patents pertaining to Allegra had expired.  In 2004 and 2005, courts invalidated four patents still claimed by Aventis.  The remaining patent pertained to extended release, which is not required to produce it in generic form.  See Calvert D. Crary, “Aventis’ Patent Litigation,” Litigation Notes, C. D. Crary & Co., September 21, 2005.  Also see Michelle Whelan, “Generic Pharma Battles for Allegra Rights,” Pharmacy Times, October 2005.
155. “FDA Approves Generic Allegra Capsules – Litigation Continues,” Rx Update, August 2005.
156. Prices surveyed at Drugstore.com November 2006.
157. Aaron Smith, “New Profit Twist for Drug Makers,” CNN/Money, May 11, 2005.
158. “Generic Competition to 2009: The Impact of Patent Expiries on Sales of Major Drugs,” Urch Publishing Limited, Strategic Report, October 2005.
159. Inhaled corticosteroid nasal spray in the most effective way to treat symptoms of allergic rhinitis including nasal congestion, runny nose and sneezing.  William Berger, Allergies and Asthma for Dummies (New York: Hungry Minds Inc., 2000)
160. “FDA Approves First Generic Version of Flonase,” MedicalNewsToday.com, February 23, 2006.
161. In this case the difference in shipping cost between Costco.com and RxUSA.com would likely remove any cost benefit of pill splitting.
162. “Canadian Pharmacies,” Drugstore News, December 16, 2002.
163. David Gratzer and Neil Seeman, “Granny Goes North: The Truth about Canada and Prescription Drugs,” National Review, May 22, 2000.
164. Stephen Majors (Associated Press), “Customs to Stop Seizing Prescription Drug Shipments from Canada,” South Florida Sun-Sentinel, October 3, 2006.
165. Bernard S. Bloom and Ronald C. Iannacone, “Internet Availability of Prescription Pharmaceuticals to the Public,” Annals of Internal Medicine, December 7, 1999, pages 830-33.
166. Ibid.
167. Ibid.
168. Sample of 45 Internet pharmacy Web sites claiming to be Canadian.  See “An Analysis of Terrorist Threats to America’s Medicine Supply,” GlobalOptions Inc., May 22, 2003. 
169. “Mexican Drugs Shipped to U.S. via Canada, say Consumers,” Scrip: World Pharmaceutical News, No 2942, April 9, 2004, page 17.
170. Marv Shepherd, “Statement on Importation of Prescription Drugs Submitted by the Academy of Managed Care Pharmacy to the United States Department of Health and Human Services Task Force on Drug Importation,” May 14, 2004.
171. Michael A. Veronin and Bi-Botti C. Youan, “Magic Bullet Gone Astray: Medications and the Internet,” Science, Vol. 305, July 23, 2004, page 481.
172. Donna Young, “FDA Clarifies Importation Law as Internet Pharmacies Proliferate,” American Journal of Health-System Pharmacy, Vol. 60, No. 8, May 2003, page 729.
173. See, for example, William K. Hubbard, Senior Associate Commissioner for Policy, Planning and Legislation, Food and Drug Administration, “Continuing Concerns over Imported Pharmaceuticals,” Testimony before the Subcommittee on Oversight and Investigations, U.S. House Committee on Energy and Commerce, June 7, 2001.
174. Michael F. Conlan, “How Safe Is the Drug Supply?” Drug Topics, October 15, 2001.
175. Paul M. Rudolf and Ilisa B.G. Bernstein, “Counterfeit Drugs,” New England Journal of Medicine, Vol. 350, No. 14, April 1, 2004, pages 1384 – 86.
176. “Counterfeit Medicines,” World Health Organization, Fact Sheet No. 275, February 2006.
177. Paul M. Rudolf and Ilisa B.G. Bernstein, “Counterfeit Drugs,” New England Journal of Medicine, Vol. 350, No. 14, April 1, 2004, pages 1,384 – 86.  Also see U.S. Food and Drug Administration, “FDA Takes Action Against Foreign Websites Selling Counterfeit Contraceptive Patches,” FDA News, U.S. Food and Drug Administration, U.S. Department of Health and Human Services, February 12, 2004.
178. Tracy Wheeler “Web May Not Be Rx for Your Drug Needs,” Akron (Ohio) Beacon Journal, July 06, 2004.
179. Ibid.
180. Bette Hileman, “Counterfeit Drugs,” Chemical & Engineering News, Vol. 81, No. 45, November 10, 2003.
181. “Drug Expenditure in Canada 1985 to 2005” Canadian Institute for Health Information, May 10, 2006.
182. Julie Appleby, “Report Attempts to Show Impact of Cross-Border Access,” USA Today, May 17, 2004.
183. For a list of discount programs for specific medications, see Needymeds.com.  Also, www.helpingpatients.org can help patients determine whether or not they qualify for various programs.  Accessibility to both Web sites verified July 12, 2004. 
184. Information obtained from pparx.com and TogetherRXaccess.com.  Accessed October 31, 2006.
185. Richard Cauchi (NCSL Health Care Program), “State Pharmaceutical Assistance Programs,” National Conference of State Legislators, July 2004; available at http://www.ncsl.org/programs/health/drugaid.htm.

Devon Herrick, Ph.D., is a senior fellow with the National Center for Policy Analysis. He concentrates on such health care issues as Internet-based medicine, health insurance and the uninsured, and pharmaceutical drug issues. His research interests also include managed care, patient empowerment, medical privacy and technology-related issues.  Herrick also serves as the Chair of the Health Economics Roundtable of the National Association for Business Economics.

Herrick received a Ph.D. in Political Economy and a Master of Public Affairs degree from the University of Texas at Dallas with a concentration in economic development. He also holds an M.B.A. with a concentration in finance from Oklahoma City University and an M.B.A. from Amber University, as well as a B.S. in accounting from the University of Central Oklahoma.