Consumer Reports recently published a fascinating survey of pharmacies’ cash prices for five common generic drug prescriptions.
The results were startling. Prescription prices ranged from $66 to $1,351—a nearly 2,000% difference. The big three retail drugstore chains—CVS, Walgreens, and Rite Aid—consistently had higher average prices compared with those of other pharmacies. Independent pharmacies had some of the lowest prices, but also some of the highest prices.
Our analysis of prescription profits highlights the pharmacy industry’s unfortunate pricing strategy for cash-pay prescriptions. Average profit margins ranged from $8 to $264 per prescription for the five drugs. We can only hope that consumers didn’t pay the pharmacies’ sky-high cash prices.
The results expose the insane soak-the-poor mentality baked into the U.S. pharmacy industry’s historical pricing models. The data also highlight the potential pharmacy opportunity for Amazon.
P.S. Before other states follow Maryland and pass laws against price gouging by generic manufacturers, perhaps they should take a closer look at the behavior of their own states’ pharmacies.
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