States encounter drug price differences

May 1, 2002

Pharmaceutical Representative

Arizona and Michigan have just released the results of two statewide studies that show vast differences in the prices of pharmaceuticals throughout each state.

Arizona and Michigan have just released the results of two statewide studies that show vast differences in the prices of pharmaceuticals throughout each state.

Michigan differences

The results of the Michigan study show that the price of identical prescriptions can vary by as much as 400% from one pharmacy to another. Surveyors found price differences of as much as $30 from one pharmacy to another for the same drug with identical strength and dosage.

The survey also showed that the overall average drug prices differed from city to city. Pharmacies in southeastern Michigan generally charged higher prices for their drugs than those in northern Michigan. Birmingham, Flint and Detroit ranked as the three cities with the highest drug prices. Marquette had the lowest average drug prices, followed by Traverse City and Alpena.

Michigan Attorney General Jennifer M. Granholm, whose office conducted the study, is notifying each of the highest-priced pharmacies that follow-up pricing surveys will be conducted regularly in the future and that her office is prepared to take legal action, if necessary, to correct repeated instances of excessively high prices that violate the law.

Granholm also said that consumers should be aware of these price differences and check several locations before filling their prescription.

"The message here is clear: Consumers can't afford not to shop around for their prescription drugs," Granholm said. "We don't think twice about crossing the street to save a penny on a gallon of gas; consumers need to know that crossing the same street can save hundreds of dollars on their prescriptions."

Arizona study

A similar study conducted in Arizona found that, for the basket of drugs surveyed, there was a price difference of 62% from the least expensive to the most expensive pharmacy. The medications would cost $1,325.66 at a pharmacy in Chandler and slightly more than $2,111 at the pharmacy with the highest prices.

As a result of the survey, Arizona Attorney General Janet Napolitano's office said it would support legislative efforts that would increase the state's bargaining power with pharmaceutical companies. Napolitano also plans to meet with representatives of those companies and retailers in the next few months to find out why there is such a discrepancy in the cost of medications.

But Jeff Trewhitt, spokesman for the Washington-based Pharmaceutical Research and Manufacturers of America, said that price differences were a result of competition between neighboring pharmacies - something beyond the control of the pharmaceutical industry. "There's not much we can do about it, because what we give them is our wholesale price, and then they tack on whatever on top of that for their retail price," he noted.

Trewhitt said that though PhRMA did support the idea of investigating why the price differences exist, the organization would not recommend undermining competition. Commented Trewhitt: "If it turns out that it's just sheer marketplace competition, we would certainly be reticent to recommend any changes with that." PR

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