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Shopping Around for Prescription Drugs Pays Off (Part 2)


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This segment originally aired November 14, 2005.
  The average Californian buys almost eight prescription drugs each year. Yet, many don't shop around. A Full Focus investigation found that some stores charge twelve times more for the exact same medication. Here's part two of Rebecca Tolin's report on prescription drug prices.
Betty Curtis: "This is a class project."
Betty Curtis wishes her health were as timeless as her art. But the 83-year-old has found with age, comes ailments.
Curtis: "The glaucoma has made my eyesight a little dimmer and I don't see everything quite as vividly as I did before."
Curtis says a tiny bottle of eye drops has enhanced her ability to perceive color. But the cost can make her see red. Curtis takes eight medications in all, for everything from osteoporosis to high cholesterol.
Curtis: "Here's one medication for $388 for three months."
Curtis spends about $300 on medications each month, out of pocket. Her health plan doesn't cover prescription drugs.
Curtis: "Is that a generic?"

Jeff Taniyama: "No, there's no generic for Zalitan."
The shrewd shopper always asks her pharmacist for generic versions. And Curtis has found purchasing a three-month supply saves money in the long run. Curtis' store of choice is Costco. So, we put the discount warehouse to the test. So what would be the difference between Tenormin and its generic Atenolol if I wanted to get 50 milligrams a day for 30 days?
Taniyama: "For 30 of the Atenolol, 50 mg, it's $3.79. For the branded product Tenormin, $42.19."

Tolin: "Huge difference."

Taniyama: "Huge difference."

Tolin: "And you're saying they're really equivalent?

Taniyama: "Yes."
Pharmacist Jeff Taniyama says the generic blood pressure drug Atenolol is a good choice for Curtis. But how does the Costco price compare to other pharmacies?
Maddy : "Hi, I was calling to get prices of seven different medications."

Voice (on phone): "The Tenormin is $48.16 and the Atenolol is $5.43."

Tolin: "Wow, that's quite a difference too. In a phone survey of fifty pharmacies, Full Focus found Costco indeed has the lowest price on Atenolol: $3.79 compared to $35.30 at Poway's Super Rx pharmacy. That's nine times more money for the same generic drug. How can Costco make money on a $3.79 prescription?"

"Part of it is the acquisition prices that we have, and have we purchase it. For an example something like the Atenolol, we try to find the best manufacturer at the best price and then we buy it in a bottle of 1000, as opposed to 10 bottles of 100."
Taniyama says big box stores have the advantage of buying in bulk. Plus higher revenue items contribute to Costco's bottom line. And then there are those membership fees which bring in the bucks. California law states that pharmacies can't turn away the general public so even here at Costco, you don't have to be a member to buy prescription drugs. You just tell the employee, 'I'm here to use the pharmacy.'"
Employee: "Sure just stop by the membership desk."
And you walk right in.
Taniyama: "One of the advantages some of the non-members have is the prices are going to be consistent no matter if they're a member or non-member. Because we are licensed by the state we have to provide pharmacy services for non-member individuals."
But even employees admit there are downsides to the Costco experience limited locations and hours, not to mention a trek through the giant warehouse just to get your medications.
Taniyama: "They have to also look at other factors besides price: convenience, levels of service, let's say we have someone who can't get around very much. It may appropriate for them to use a delivery service."
Tolin: "Do you find consumers are willing to pay a little bit more for the convenience?
Joe Bitterman: "I think so. I mean we have prescription delivery at all of our stores. We have convenient locations. We have the convenience I think."
Joe Bitterman supervises the pharmacies at all 30 Long's Drug Stores in San Diego county. In fact Long's sells more prescription medication than any other drug store chain in California. As for prices, Long's charges $13.95 for 30 pills of Atenolol. Remember Costco charges $3.79. And the median price we found was $12.
Tolin: "If I came in and I said I want Atenolol, Long's charges $13.95 for my monthly supply but I can find it for as little as $4.00 elsewhere like Costco, what would you do for me?

Bitterman: "I would match the price of any competitor including Costco."
Our investigation found chain drug stores tend to the more expensive side. Bitterman points to high overhead, due to multiple locations and 24-hour service.
Vicki Samuel: "This is just like Allover. It's just a store brand. It's just going to save you money."

Customer: "OK."
Besides big box and drugstore chains, we checked with independent pharmacies around the county. Prices at PJ's Prescription Shoppe in Point Loma fell somewhere in the middle range. $12.50 for Atenolol, which even pharmacists admit can't compare to Costco.
Samuel: "They want to shop at the neighborhood pharmacy and put business back into the neighborhood but there's no way we can compete Costco."

Rebecca: "And, why is that?"

Samuel: "Just price-wise, we would lose money. Every time we would fill that subscription for him we would lose a substantial amount of money."
Vicky Samuel says often big box stores sell drugs for less than PJ's buys them. But she points out independent shops treat each customer as an individual.
Samuel : "If we know they don't have insurance, if they're cash paying, we always try to accommodate that within reason. If it's a name brand, there is not a lot of room to play with. But on generics we do what we can to make it affordable."
Samuel says pharmacists know doctors and customers personally.
Knight to Dave: "What's the least expensive because the guy's paying cash. Got any ideas?"
Pharmacists say about one out of four patients pays out of pocket here. For some of those customers, PJ's still uses the honor system.
Samuel: "If it's a regular customer, a good customer, we know them, we trust them, they've been coming here for a long time. If they don't have the cash with them, if they forgot their checkbook or whatever, they can take the prescription with them so they can start their medicine and don't go without and pay us later."
Samuel (to kid): "I'll let you slide!"

Kid: "All right."

Samuel: "Don't tell anybody."

Dave: "The corner drug store is mostly gone now, the corner hardware store, the corner grocery, closer connections with the customers."
The bottom line, it depends what you're looking for. We averaged the price of seven popular medications and found balboa pharmacy was the most expensive. Longs and Sav-on fell somewhere in the middle with Sam's Club and Costco the cheapest overall.
Curtis: "Well, I pay $52 per month."

Bitterman: "Yeah, it's up there and that's because there's no generic."

Of course, Betty Curtis could have told you that. The 83-year-old woman says this Chula Vista Costco saves her money. And it's a convenient drive from her home.
Curtis : "Take it out and there's my pills for the day."
Doing her homework allows Curtis to count her drugs, not her pennies.
Curtis: "But I am able to manage getting my medication so I'm a very lucky person. I know many people who can't."
Although certain stores tend to be cheaper, don't make assumptions based on one medication. Our investigation found that stores may have a low price on one drug and a high price on another. And remember, California law requires pharmacies to 34e prices to anyone who asks.

Find out which pharmacy has the lowest prices for seven common prescription drugs
on the Full Focus web site.

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