Prescription Drug Markups as High as 600,000 Percent

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As consumers, we have the right to know how much we are really paying for the things we buy. One thing few people consider when purchasing their prescription drugs is how much the active ingredients actually cost. It is just a small pill and yet, somehow, pharmacies – yes, pharmacies, and not the drug companies - are able to charge outlandish amounts for them. The drug companies are usually blamed for the high cost of drugs, but it is the pharmacies that are marking these drugs up as high as 569,958% for Xanax!¹¹

This explains why Walgreen's and CVS pharmacies are popping up all over the country. These two pharmacies in particular were the focus of an investigation by Steve Wilson of Channel 7 News in Detroit that examined the mark-up of generic prescription drugs by pharmacies. The investigation showed some very alarming statistics that may influence consumers in the future. If you purchase prescriptions from CVS or Walgreen's, then you may already know that generic drugs are about 20% cheaper than brand-name drugs. For example, if you have a hundred-dollar prescription, you probably feel good about saving $20 on your generics and go home happy, but your local pharmacist is the one that is truly happy with the transaction. He just sold you 100 pills for $80 and the pills only cost him $10! Multiply that by a few hundred transactions a day and you will have solved the secret to the success of Walgreen's and CVS.

Cheaper Sources for Prescriptions other than Health Coverage

If you think Walgreen's and CVS are the only sources of prescription drugs in your area, then consider visiting a nearby Costco. Costco marks up generic drugs very little, and Wal-Mart recently offered certain generic drugs for as little as $4! For Costco, you may think that you'd have to be a member in order to purchase your drugs, but – believe it or not – you can make it through the Costco door without membership. Since prescription drugs are a federally-regulated substance, you can just tell the security guard at the door that you need to pick up a prescription at the pharmacy.

Cutting Prescription Costs with Health Insurance

One of the best solutions to this dilemma is to purchase insurance. Insurance will allow you to choose a pharmacy nearby and pay a co-pay of about $10 for your prescription rather than $100. Instead of walking out of the pharmacy feeling like the pharmacist pulled a fast one on you, now both you and the pharmacist will be happy because you only had to pay $10 and the pharmacist will receive the rest from your insurance company.

Source: SRS Retiree Association, October, 2010

This sounds pretty good right? Well, it gets a whole lot better! Insurance can save you outlandish amounts of money at the hospital and at the doctor office. It should also give you peace of mind knowing that you are covered if something ever were to happen.

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