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Drug prices skyrocketing

Popular brand-name drugs are already expensive and are getting pricier. Despite the sluggish economy and low rate of inflation, top-selling medications have soared in price.

The cholesterol-lowering drug Lipitor is up more than 11 percent over last year. According to Thomson Reuters MarketScan, a day's supply went from $3.17 in 2009 to $3.53 in 2010.

Lipitor is not alone. The anti-clotting drug Plavix rose in price by more than 13 percent, so a month's supply runs about $195. The psychiatric drug Seroquel jumped 16.5 percent over last year. And the price of the leukemia drug Gleevec went up more than 20 percent, to over $4,800 for a bit less than a month's supply.

Why are drug prices climbing so quickly? Big brand-name manufacturers point to the high cost of research and development for new medications. The trouble with this argument is that many companies have been cutting back on their R&D budgets. They also have very little to show for their investment during the past decade. Breakthroughs for Alzheimer's disease, Parkinson's or other hard-to-treat conditions have been few and far between.

Many analysts blame the dramatic price increases on coming generic competition. Both Lipitor and Plavix will soon lose their exclusive patents. That means insurance companies are likely to encourage patients to take atorvastatin instead of Lipitor and clopidogrel instead of Plavix.

Insurance companies have created penalties for patients who want brand-name medications. Many health insurance plans use tiers to discourage brand-name use. Generic versions, when available, are usually tier 1 with low co-pays of $10 to $15. Brand-name drugs not on the formulary may not be covered at all or require a co-pay over $100.

Take the popular sleeping pill Ambien, for example. It is now available as generic zolpidem. If you had to pay out of pocket for the brand, the cost could be as high as $190 for a month's supply. The generic is often around $10 to $20.

If generic drugs were always identical to the brand-name products, as the Food and Drug Administration maintains, this would be only good news for consumers. There are questions, however. Experts estimate that 80 percent of active ingredients now come from countries like India, China, Brazil and Mexico. There is very little oversight of manufacturing plants.

Many readers of this column have reported problems with zolpidem, as this story demonstrates: "Ambien worked great for me. I fell asleep within 30 minutes and stayed asleep for eight hours. I was excited about generic zolpidem when it became available. Money in my pocket! The first generic I tried did not work at all. No sleep! A different generic zolpidem resulted in only four hours of sleep, and it took me more than an hour to fall asleep."

People who would like to learn about saving money on brand-name drugs from online pharmacies may find useful information at We also have prepared a Guide to Saving Money on Medicine. To request a copy, please send $3 in check or money order with a long (No. 10), stamped (61 cents), self-addressed envelope to: Graedons' People's Pharmacy, No. CA-99, P.O. Box 52027, Durham, NC 27717-2027. It also can be downloaded for $2 from our website:

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