Here’s the Real Price of Prescription Drugs

Jeroen van Meijgaard
Jeroen van Meijgaard, PhD, is a health economist and conducts data analysis and outcomes research for GoodRx.
Posted on

Everyone is talking about high drug prices…but what prices are they actually talking about?

Just like other products, prescription medications change hands multiple times before they get from the manufacturer to the consumer. Except with drugs, the price doesn’t always go up, the price isn’t always what is actually paid, and it’s sometimes impossible to know what the real price actually is. It’s a confounding and confusing and conflicted system, and that all helps keep prices high. 

But that doesn’t mean it’s impossible to understand. Below is a chart that lays out the many prices that are affixed to a drug as it moves through the supply chain. As you can see, it’s especially confusing on the consumer end, where there are different ways to pay and various charges or prices that get attached to the drug.


 

We also wanted to see how this works in practice, so we ran a couple drugs through the chain as examples. Here’s a look at Xarelto, a relatively recent drug used as a blood thinner that is only available as a brand (no generic versions), so the price is high. 


 

We also pulled prices for atorvastatin, the generic version of Lipitor, a popular statin drug used to lower cholesterol. Depending on the manufacturer, the list price is about $9.04 for 30 pills of the 40mg strength. The listed average wholesale price is $173.02, which has not changed for years. The actual wholesale price is much lower…

As both of these examples show, there is not always a clear logic to the flow of prices – and the actual price that the consumer pays can vary tremendously. But this is the crazy system that exists – and it’s the reason that GoodRx works hard to bring consumers the best possible prices for the medications they need.

 

 

Filed under