Is CVS price gouging cancer patients?

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Among the most popular posts on the portal have been those in our series on Free and Low Cost Health Care.  In this post I  would like to emphasize the importance of comparison shopping for medications.  Prices for the same medication can vary dramatically from pharmacy to pharmacy.  I would like to illustrate this by sharing the story of one of my patients.

An unpleasant experience at CVS

The patient was an 80 year old woman who had just undergone her first round of chemotherapy for cancer. Her physician prescribed Ondansetron, the generic version of Zofran, an anti-nausea drug used primarily in cancer treatment.  Ondansetron is generally taken twice a day and the physician prescribed sixty 8 milligram pills in anticipation that the patient would undergo multiple rounds of chemotherapy.

When the patient went to pick up the prescription at her local CVS she was asked to pay $900. When she demurred from what seemed like an excessive price, the pharmacist offered to supply a lesser quantity of pills – 10 for $150. This was still the same price, but a lesser quantity of pills.  The patient was informed that all pricing of drugs was done centrally by CVS and that nothing could be done at the store about the price. She left the pharmacy and asked me for assistance.

I checked my Epocrates software and learned that thirty 4mg Ondansetron tablets were available on drugstore.com for about $39.99. The equivalent price for this patient’s prescription (120 4mg tablets) would be $160, not $900. To verify that this was a fair price I called a local pharmacy I use frequently in the Bronx and asked them how much they charged for sixty 8 milligram tablets.  I was told that they could sell this for $135, perhaps less if my patient did not have much money. When I mentioned the CVS price of $900 the pharmacist remarked, with a touch of irony, “that’s quite a mark-up.”

The “mark up” in this case meant that CVS charges roughly six times what other pharmacies are charging.  I would consider this to be price-gouging (“pricing much higher than is considered reasonable or fair“).  It is particularly concerning that the victim of this was a vulnerable elderly patient undergoing her first round of chemotherapy.  Fortunately, she was able to get her medicine for considerably less at a pharmacy I recommended.

CVS responds

I wrote to CVS about this case and here is the gist of their reply:

1.  CVS’s two primary drug chain competitors charge more for Ondansetron.

Learning that three of the major pharmacy chains all charge six times the going rate for Ondansetron is hardly reassuring.  And, as I never tire of repeating to my sons, “the fact that someone else gets away with doing something wrong, doesn’t mean you should do it.”

2. CVS also sells other anti-nausea medicines (notably Prochlorperazine and Promethazine) at considerably less, about $10 for a ninety day prescription.

This may well be true, but what exactly does it mean for my patient? Certainly, CVS cannot suggest that she should have exercised some type of medical judgment that Promethazine (a drug she undoubtedly never heard of) was equivalent to the medicine prescribed by her oncologist. Should she have had the oncologist paged at 6PM to request a cheaper medicine? And what if the oncologist had stated that drugs like Ondansetron  are considered among the drugs of choice for chemotherapy related vomiting? (See, for example, The Medical Letter, 12/15-29/2008)

3. Finally, CVS noted that it provided a variety of other services, such as expanded hours and online prescription ordering, that were not offered by its competitors.

Yes, but do such services justify these prices?  And will my patient be making an informed choice when she spends the extra $700 plus dollars for the CVS extras?

Let the buyer beware

The most important lesson of this story is that drug prices vary dramatically from store to store.   The chain stores are not always the cheapest. And, as many patients learn, you might have better luck bargaining with a local pharmacist.

What are the larger implications of this case?

As the debate over health care reform rages in Washington, it is important to keep in mind the fundamental question we face:  Is health care just another commodity (like bricks or toothpaste) or is it a human right?

The social argument for making health care a commodity is based on the idea that market rationality will create an efficient health care system.  Individual consumers guided by rational self-interest will make wise choices, rewarding efficient health care suppliers with their patronage and punishing inefficient health care suppliers. Of course, no actually existing health care system is run this way.  And there are many ways in which health is not like a commodity. Nonetheless, the belief that rational markets will create efficiency in health care is behind many recent reforms internationally and the current proposals to have insurance companies administer the US health care system.

But a case like that of this patient shows several of the weaknesses of this argument.  Having just received her first session of chemotherapy and without any medical expertise, this patient was particularly vulnerable and clearly  in no position to make the presumably rational choice of – for example – calling up a variety of pharmacies to ask for alternate prices.  Or of calling up her oncologist and querying her oncologist’s medical judgment.  Or of deciding that she would prefer more nausea to less money.

Indeed, can there be an economically rational choice with respect to nausea versus money?

It might be argued that the responsibility for economic rationality lies with the physician, not the patient.  But in this case the physician had prescribed a generic medication, an economically rational choice.  Is one really to expect physicians to know the prices of all the medications they prescribe at all the potential pharmacies their patients visit?

This is a dramatic case, but the issues are similar in less dramatic ones.

Wouldn’t the rational thing be for the government to assure that people get the drugs they need and negotiate real prices with the drug companies?  This solution is not without its own set of problems, but surely they are better than what happened to my patient.

A suggestion for action on this issue:

This story is old news.   In August of 2004, the (then) New York State Attorney General Elliot Spitzer released a survey of drug prices in the state and documented “Sharp Price Differences … in Common Prescription Medications.” To remediate this situation the Attorney General’s office set up a website that would allow consumers to comparison shop the 150 most common drugs: http://rx.nyhealth.gov/pdpw/Other States have undertaken similar initiatives.

And yet the price disparities continue to exist.  Perhaps this should be one of Project Censored’s top censored stories.  They take nominations at this link.

Disclaimers

The patient in this case graciously provided me with permission to share her story.  I have no financial interests in any pharmaceutical company or drug store chain.  I would not want readers of this column to construe this story as a specific endorsement of drugstore.com.  Buyers should beware, always.

posted by Matt Anderson, MD

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8 Responses to “Is CVS price gouging cancer patients?”


  1. 1bronxdoc

    Readers of the Portal may want to visit Martin Donohue’s website: Public Health and Social Justice: http://phsj.org/ and particularly his page devoted to the pharmaceutical industry. Matt Anderson, MD

  2. 2bronxdoc

    Dear Dr. Andress, Looking on the Internet I don’t see any website to allow Texas consumers to compare drug prices at different stores. TexPIRG – Texas Public Interest Research Group – has a working group on prescription drugs but no comparison tables. The link is at: http://www.texpirg.org/issues/health-care-and-prescription-drugs. Obviously it is a major investment of resources to put these comparison tables together.
    As a practical matter, I would suggest you check out the prices at drugstore.com and take this as a standard by which to judge the price any given store offers you. Matt Anderson, MD

  3. 3Martin Donohoe

    CVS owns and operates about 450 “Minute Clinics” in its stores around the country. It had 545 a few months ago, but shuttered some because of the current economic climate, which makes me think that people with more minor illnesses are simply forgoing care. As the clinics themselves do not make money, the profits come in store sales, including sales of pharmaceuticals. Patients would not have to fill their prescriptions at CVS, but in the absence of information re comparative drug prices, many would. Can you say “conflict of interest”?

  4. 4Lauri Andress Ph.D.

    My mother is 78 and takes a lot of medication. Helping her to make informed cost conscious decisions is time consuming. It is very difficult and I am not aware of a helpful comparison list here in Texas. I agree with all of the comments except the LiIbertarian. The government is a protector and an opportunity maker- each and everyone of us including Libertarians need the government for some thing at some point. How do you decide whether that need is legitimate versus another? We have aliving Constitution- everything we required or would have to encounter was not covered but rather the document was written to with stand time and to prevent government abuses- it says what the government should not do basically. it is up to our society at any given time to set the parameters of justice and government actions.

  5. 5Daniel

    I don’t believe that healthcare is a human right; I do however believe that a modern society needs compassion and should be able to care for their citizens. I am however split in this issue, As a libertarian I believe in a small government, I also believe in making people conscious about their choices in life and I believe that if healthcare is given free, well it will be payed by tax, people will make more choices that they wouldn’t done if they paid an insurance based on probably a more healthy living. There is much more to this issue and much more complicated, I know.

  6. 6Leslie Ramirez

    Ondansetron is one of the most glaring examples of price variation for meds among the retail pharmacy chains. There are hundreds of medicines that have wide variations in pricing. Amlodipine 10 mg can cost $5/month at Kmart or $56/month at Walmart (and everyone assumes Walmart is the low cost leader?). Ventolin HFA costs $9 at Target, or $43 at Osco (aka Albertsons). It’s a crazy unregulated mess out there. In order to help our patients here in Chicago find the best prices for their meds we set up a free and independent website: http://www.LesliesList.org, featuring the price of over 450 meds at 6 major retail pharmacy chains. I use it in my office all day long- I just print out the price list and hand it to my patients, who are extremely surprised and grateful for the info.

  7. 7Claudia Chaufan

    Sad tale…which is why no civilized country allows this nonsensical “shopping around” for medically necessary drugs, but works with drug formularies, with regulations, and with bulk purchases. Yet one more reason to join Mad As Hell Doctors!

  1. […] is also invoked in other cases without price increases, but simply when prices for a product are higher in some stores than they are in other stores.  So rather than assert price gouging requires “a price increase judged as unfair,” […]

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