So I understand the laws of supply and demand but Tetracycline is a very old generic antibiotic, so I was very surprised to see the price of it was 700+ dollars (without insurance) at CVS pharmacy. After insurance it was 100+ dollars but that is not important. To be specific, we are talking about 56 Tetracycline capsules of 500 mg each.
I can afford it but there are others who may not be able to.
So what’s the straight dope ? Why is Tetracycline so expensive currently ? Is there something going on that has put a huge demand on this ? Or has the supply side suffered huge setbacks ?
Tetracycline is the generic name for the drug; as far as I know, it’s been available as a generic for decades.
The Wikipedia article on tetracycline notes that its price has risen dramtically in recent years, even for generic versions. It quotes a Boston Globe article, noting that many generic drugs now have few manufacturers, and with little competition for some drugs, manufacturers feel empowered to raise prices – sometimes a great deal.
Out of curiosity I looked up Tetracycline on Amazon to see if they had generics there (long shot, but eh). I found some medicine used for aquarium fish skin care as an antibiotic and then this gem:
$88 for 25 grams, a similar quantity (and probably similar purity) to your purchase, but outside the clusterfuck that is the U.S. healthcare system. So that gives you a good sense of a profitable retail price for a manufacturer. Marginal cost of production is presumably around $25-$50.
It’s prescribed very little due to the damage it causes to bones, so there isn’t much of a market for it.
Members of that antibiotic family are responsible for the dark yellow color of millions of people’s teeth (other bones as well, but if you’re seeing any other one of your bones you need a traumatologist now). Given how quickly that happened and in how many of the patients who received tetracyclines, its use was almost discontinued completely, in hopes that any further damage could be avoided. Note that the color change involves a change in the structure and composition of the bones: it’s not merely cosmetic.
Another note on production costs (from the UK) - this gives a Drug tariff price for 28 x 250 mg capsules of £1.30. The drug tariff price is effectively the reimbursement price for the drug, so it’s a measure (in theory) of how much it costs the NHS in the UK. The price always used to be based on the average price of the drug as supplied by the 5 or 6 largest generic suppliers (of that specific drug) in the UK, and so far as I know that’s still how it works. If I understand the page correctly, a couple of suppliers are actually charging above this price, which suggests to me that the market may be unstable and rising (slightly - but I’m far from an expert in this) but even so the highest NHS indicative price (which I take to be the price that supplier will charge the NHS) is only £3.20.
Unless there has been a very recent spike in price (caused by eg global shortage) that this page does not yet reflect, price in the UK appears considerably less than the US. I see no particular reason why US production prices should be huge compared to those in the UK.
The Boston Globe article to which I linked upthread noted that the per-pill retail price of generic tetracycline in the U.S. rose from $0.06 to $4.60 in a two year span (apparently, from 2013 to 2015); according to the OP’s post, the retail price (without insurance) is now over $12 a pill.
I agree, there’s no compelling reason to believe that the price increase is driven by the cost to produce it. Even if production prices had increased, it’s extremly difficult to imagine that the cost to produce a drug which has been successfully (and extremely inexpensively) produced for 70 years suddenly increased by so much that the per-pill price was forced to increase by 200 times or more in 6 years.
On pharmacychecker, it is still $0.25 a pill and I believe they use pharmacies based in Canada.
My understanding is that in order for a generic drug to spike in price the following has to happen.
There has to be a small market for the drug, and only one domestic manufacturer. It costs a lot of money for new manufacturers to enter the marketplace due to regulations, so if that one manufacturer jacks up the price there is nothing people can do.
It is illegal for US citizens to buy drugs overseas for ‘safety’ reasons and if there isn’t enough of a domestic marketplace for the drug, there isn’t enough incentive for new manufacturers to enter the marketplace. If someone jacked up the price of a widely prescribed drug like HCTZ or metformin, other manufacturers would enter the marketplace.
Solutions for this situation include.
Buying your drugs from overseas (which can be far far cheaper).
Making it easier for domestic manufacturers to enter the marketplace and drive up competition.
Bypassing pharmaceutical companies altogether by doing things like buying from compound pharmacies, etc.
But tetracycline fulfills none of those conditions. AIUI, it’s among the most commonly prescribed antibiotics in the world. It’s in the WHO’s list of essential medicines.
That’s exactly what has happened to tetracycline, a widely prescribed drug. And yet, the price has been high since at least 2015.
So I guess I don’t know why you’re presenting this as a hypothetical and using other drugs to illustrate the hypothetical. If I’ve missed something—and I really might be missing something—please say so.
But how many prescriptions for tetracycline are written in the US each year? Is there any way to gather that data? If you assume a course of tetracycline is about 5-20 grams, how many kg does the US need to produce to meet domestic demand? If there are roughly 300 million antibiotic scripts written a year, I’m not sure what % of them are tetracycline drugs.
I was under the impression that the spike in generic drug prices was among drugs with a small market for them, since new suppliers chose not to enter the marketplace to compete. Since buying from international suppliers (where it is still less than a dollar a pill) is illegal, that means domestic manufacturers can charge whatever they want since there is no domestic or international competition.
I totally missed Nava’s post about how often tetracycline is prescribed. I looked it up, and it’s not among the 300 most prescribed medications in the US. So between your post and hers, I believe ignorance has been fought.
I apologize for my post and its perhaps-incredulous tone. You guys were right and I was wrong.
Buying tetracycline off of Sigma-Aldrich will come with all sorts of warnings about how it’s not intended for human use. Pharmaceuticals that are manufactured for human use go through a documentation process called GMP (Good Manufacturing Processes), which certifies various boring but important analyses of the product. GMP-certified products do cost more to make, but …
… ultimately, the retail cost of the drug has little to nothing to do with the cost of manufacturing it. It’s not unlike noting that a blank CD costs less than $1 but a CD with music costs $15. In part, it’s the content creators getting paid; in part, it’s the distribution cost; in part, it’s corporate greed. And when a pill goes off-patent, only the first part goes away. It’s still supply and demand, and unless people want to (or people want their government to) tinker with supply and demand, it’s always going to feel like you’re getting ripped off.
Tinkering with supply and demand is something that people should take more seriously. One of the problems with things like antibiotics is that the usage often spikes during outbreaks. Let’s say that you sell 1,000,000 units a year normally, but there’s a 10% chance you’ll need 10,000,000 units in a year. Do you make 1,000,000 units (and have gross shortages during outbreaks), 10,000,000 units (and only sell 10% if there are no outbreaks), or something in between? The government does exert influence on other fundamental aspects of the market, such as paying farmers to run a surplus, and it’s reasonable to propose a scenario where the government keeps a stockpile of essential drugs and releases it or buys more to smooth out supply and demand.
The bigger question of how to ensure a balance between pharmaceutical companies (who ultimately do need to profit if they are for-profit outfits) and consumers is probably the more interesting issue here. Tetracycline is off-patent, but there are also many tetracycline-resistant infections. Newer (read: more powerful) tetracycline-like antibiotics are on the market. If the solution is to screw the pharmaceutical companies, import from other countries, etc. - that creates perverse disincentives for future investments. Even companies that spend more on advertising than science still spend billions on science, and the (IMO naive) attitude that all the pharmaceutical companies do is take an existing drug and resell it is not very productive.
Tetracycline is expensive because it does a lot of good. It may be more expensive than it “should” be, but there’s no easy solution to determining what the price “should” be.
That may be, but even if 6 cents a pill (where it was in 2013) was less expensive than it “should” be, is there any real reason to believe that the sudden, enormous increase in price since (to the point where it’s apparently now over $12 a pill) is anything other than a decrease in competition, and a willingness of the remaining manufacturer(s) to price exorbitantly, solely because now they can?
Obviously I wasn’t suggesting that the Sigma Aldrich product is suitable for humans. But from a technical point of view, the purity is similar, so it gives some idea of a profitable price point for producing a physically similar product outside of the human healthcare system.
As for everything else you’ve said regarding products within a healthcare system? Well, all of those principles applies in the U.K. too. Yet (as Treppenwitz noted above) the price for tetracycline the U.K. is significantly lower even than the Sigma Aldrich product for cell culture, and dramatically lower than the U.S. price for the human drug. So that fact remains that the fundamental reason that this product is so expensive in the U.S. is because the U.S. healthcare system in particular is a clusterfuck.
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