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Bad meds: Price disparities show a system out of control
Wednesday, October 08, 2008

The experience of a retired Canonsburg professor, who was comparison shopping for his prescribed medication following a heart attack, is proof that the nation's health-care system is very sick indeed.

Ray Catalano, a retired biology and environmental sciences professor, paid $557 for a month's supply of the generic equivalent of Zofran, an anti-nausea drug. His health insurer, Highmark, reimburses him, but he wondered if he could find a lower price to avoid the big outlay in the first place. What he found was astounding. He could buy the same number of pills in the same dosage for $420 a month, or $410, or $100, or $46.58. A pharmacy in Ohio quoted an estimated price of $30.

We're not talking about the price difference between a designer leather handbag and a cheap plastic knockoff here. We're talking about identical products.

Even the most savvy shopper should not be expected to know that prices could vary that widely. In Mr. Catalano's case, Highmark showed little interest in looking under the rock and asking why. And pharmacies apparently count on that lack of curiosity.

The money a pharmacy makes on prescription drugs is known as the spread and, although it was unusually large in Mr. Catalano's case, price differences are not uncommon. But most people don't inquire, and certainly they don't go to the lengths of Mr. Catalano, who is making his research into a public education campaign.

Instead, a lot of them simply forgo necessary medication because of sticker shock. An April survey found that a full 45 percent of uninsured adults said they or a family member had chosen not to fill their prescriptions because of the cost. Another 38 percent said they had cut pills or skipped doses.

When that happens, patients with chronic conditions become only sicker, often winding up in a hospital emergency room for treatment that is far more expensive and that must then be borne by the facility itself. And the costs of uncompensated care inflate the prices that everyone pays -- whether out of their own pockets or in the form of higher premiums for health insurance.

The Heinz Family Philanthropies has been working on this problem and, among other ventures, provides software for federally qualified health-care systems to help direct middle-income consumers to assistance programs. Informed pharmacists behind the counter, as well, can be helpful in giving direction to their customers. But in many cases, patients have to navigate this complicated minefield on their own while beneficial programs go underutilized.

Meanwhile, spending on prescription drugs has been one of the fastest-growing components of health-care costs, and it's only going to go higher. In 2006, Americans spent $216.7 billion on prescription drugs, more than five times the amount spent in 1990. By 2017, the figure is expected to be $515.7 billion.

It's enough to make you sick.

First published on October 8, 2008 at 12:00 am