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Is Your Doctor Making Millions off Your Medication?


Healthcare in the United States may not actually be that expensive after all. Sure, what most Americans pay for health insurance and medical costs is astronomical, but why are medications so expensive? How much of prescription costs is middleman mark-up?  If I you buy medication from your physician is he too marking-up the amount I pay for the drugs he said I need?

Popular prescription medications like Zantac and Soma cost mere cents on the dollar to make. According to The New York Times, doctors have begun selling these pills for over $3.00 each. The temptation to abuse the doctor-patient trust relationship seems strong when the person making money from  patients’ medications is the same person prescribing them.  Certainly when an MD will make a large profit from the medication he prescribes there is a potential financial conflict of interest.  When an MD does not make any money from the medication he prescribes his patients, his only reason to prescribe the medication is the health of his patient.  Will an MD prescribe medication his patient does not need, but is not likely to harm them, if he will make a profit from selling the prescription medication to his patient? We can certainly see how an MD has no potential conflict of interest when deciding whether to prescribe medication for his patient if he does not profit from their purchase, and does if he not only prescribes but sells that medication to his patient.

Instead of writing prescriptions and sending their patients off to the nearest pharmacy, many doctors have started pharmacies and drug distribution centers right in their own offices. So what kind of patient is going to pay ten times the price of over-the-counter Zantac? Well, many unsuspecting victims never see how much they’re being charged for their meds because doctors are billing their insurance companies directly. The worst part is that in many states, this is legal!  There are many states that allow doctors to mark up medication costs and as a result the practice hasn’t even come into question.

In order to successfully work the system, doctors’ offices must first set up their own in-office pharmacy. This includes installing computer software that will allow them to bill the insurance company and process payments, and developing relationships with distributors who package the medication specifically for office resale.

So what is the excuse for what Republican State Senator Alan Hays calls “immoral” pricing practices? The middle men (those who stand to profit off in-office pharmacies) claim that many patients are forced to wait hours, even days, at a regular pharmacy before receiving their prescription due to the bureaucracy of certain state’s worker’s compensation policies.  While long wait times for prescription drugs are certainly a possibility, it doesn’t justify 900% markups.

Huge markups are easy to get away with because of the vague language in state laws. The average price of medication can skyrocket simply by being repackaged. The result; a Maryland patient’s insurance company can be billed for over $7,000, while the same prescription in Oklahoma is billed for less than $4,000.

Many repackaging companies maintain special relationships with doctors’ offices, which use them exclusively in exchange for making a profit. These relationships developed into monopolies in certain states. As an example a single repackaging company provides overpriced medication to nearly half of Florida’s physicians.

This is such a widespread and serious problem that it was the subject of New York Times expose. Read the New York Times article in full to better inform yourself and learn how to keep yourself from being ripped-off.

How do you feel about this practice? Should these in-house pharmacies be legal? Should MDs be allowed to dispense medication they prescribe?  If your MD can sell you the medication he prescribes for you, must he disclose the profit he will realize from the sale? Let us

We care about what you think.  Please tell us your thoughts by posting your comments, opinions and experiences that can make a difference to others.  We are actively growing our community and by sharing your concerns, you can help others with your involvement.  Thank you, Stu.

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