E-drug: WSJ on Pharmacy Prices for Generics (cont)
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The article by Tanouye in the WSJ should be read completely - not only the
first part showing the prices. The pharmacist is again, as has happened so
many times in the past, made the culprit. First, the figures are from a
survey of which very little is said. A thorough study along the proper
scientific lines would have given a fairer picture of mark-ups and profits
in pharmacies. Independent pharmacies have not been closing down for a
number of years now because of the huge profits they make! Generally,
community pharmacies only average about 3.1% net profit (gross margin of
about 24-26%).
The WSJ article does explain (somewhat!) in the last column the mathematics
of markups and should be read to get more perspective on the issue.
Articles such as this should be not considered as scientific fact.
Unfortunately, very few studies have been done that accurately reflect drug
pricing practices in retail (and manufacturing, for that matter!)
Samuel Wagner
Samuel Wagner Ph.D.
College of Pharmacy
University of Minnesota
308 Harvard Str. S.E.
Minneapolis 55455, MN
Tel. 612 625 4186
Fax 612 625 9931
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