Drug Costs, Wine Coding, Mumblings ––>
Let’s start with wine coding. One of the readers of this column sent me an email about wine coding. He likes to buy wine and share it with friends. However, it is easy to forget when he bought it and how much he paid. He writes the price on the label using the PHARMOCIST code. If he paid $10.95 he writes PTSM for the price and adds the date by the month number preceding the code and the year at the end. So March 2015, $10.95 turns out to be 03PTSM15. That makes it easy to pour for a guest with no wine talents a $10.95 bottle of wine and save the more expensive bottles for himself or the next guest.
Drug Costs and Free Enterprise Principles
It seems like every day there is another ranting about drug prices — understandably so. They are high and they keep getting higher. Nobody seems to be able to control them.
It seems like every day there is another ranting about drug prices — understandably so. They are high and they keep getting higher. Nobody seems to be able to control them. Every entity that is a part of the drug marketplace takes turns being the villain — some more often than others. There are published prices that seldom reflect any reality. AWP (average wholesale price), MAC (maximum allowable cost), WAC (wholesale acquisition cost), and others are often gathered in huge computer files or even printed somewhere, but seldom reflect the actual amount that was paid when the drug moved from one owner to another.
We all claim to be believers in the principles of free enterprise. The basic principle of free enterprise is that the buyer and seller sit down and haggle about the price until they agree. But we need to recognize who the real buyer and seller are. The seller is the drug manufacturer. The buyer, in the vast majority of cases, is the government — federal and state. A very few people pay cash. Private insurance pays for some. In any case, the buyer and seller virtually never bargain about the price. (See some exceptions below.) That favors the seller, especially since not buying is seldom an option with drugs. There are other players who all expect to get paid for what they do. PBMs (pharmacy benefit managers), insurance companies, and consultants come to mind.
One important factor is that prescription drugs are advertised in the United States — only in the United States. You have probably noticed that the only drugs that are advertised are sole-source brand-name products. The group that now bothers me the most is the anticoagulants. All of them are fighting against warfarin, the well-established, understood (and cheap generic) standard.
The prescribers have little or no interest unless they are part of a group that benefits by keeping drug costs down. In any case the buyer is either not there or not well represented, and the seller is never there when the real price is being discussed.
Exceptions that I am aware of:
Every other major country in the world. They all bargain directly with the manufacturers.
Closed systems such as Kaiser. No middlemen.
Large hospitals with strong formulary systems.
Federal military entities.
California’s Medicaid program (Medi-Cal), which has huge rebate contracts.
I started writing this column in 1985. A constant theme has been that pharmacists and pharmacy clerks and technicians need to trade places in the retail pharmacy setting. The pharmacists need to be talking to the patients, and the technicians need to be taking care of routine technical stuff like counting. Boy, it has been slow, but I see some changes starting to happen.
The pharmacists need to be talking to the patients, and the technicians need to be taking care of routine technical stuff like counting.
My previous column was about how too many pharmacies are not doing anything when a drug interaction is brought to their attention by their computer system. All of the readers of this column should go back and re-read that one. Something needs to be done to fix this problem. Patients are being exposed to risks that need to be addressed. Let’s not wait for the lawyers to latch onto this one.
Several years ago I recommended a book by Philip Hansten titled Premature Factulation. This is the same Phil Hansten that has written the definitive books on drug interactions. Premature Factulation is a very different book that explores how we arrive at something being a fact before it is. It points out that it is so easy to do that people can end up living in a made-up world. I am not making a political point here. I am just saying that we all need to have the understanding that Phil has so clearly stated in order to deal with the huge quantities of information that we receive every day. I looked up the book on Amazon. Click on “new.” It’s the best $6.00 (plus shipping) you could ever spend. The reviews on Amazon should convince you if I haven’t.
P.S. I can’t find my copy. I must have lent it to someone who liked it too much. I’m ordering another one. CT
George Pennebaker, Pharm.D., is a consultant and past president of the California Pharmacists Association. The author can be reached at firstname.lastname@example.org; 916/501-6541; and PO Box 25, Esparto,