Here’s how the drug company con game called “free sample” works

Giving it Away

“Drug Industry Spends Billions On Free Samples Of Popular Meds”

That Dow Jones headline probably made a few people choke up as they imagined the selfless generosity of drug companies. Why, they actually GIVE their product away! That is so generous!

In 2005, the industry spent $18 billion on free samples. Free!

And in 2007, five companies (Pfizer, Merck, Lilly, Baxter, and Abbott) collectively spent about $3 billion on 240 million samples. Again: free of charge. Go on! Take ’em! Enjoy!

So how can these guys make any money when they give so much of their product away?

Easy. They cook the books. But it’s like going to Benihana –-they cook them right in front of you.

Circle game

If you’ve ever received a free drug sample from your doctor, you know that it isn’t just handed over in a generic, amber-colored plastic bottle. The pills are usually contained in a fold-out blister pack that has a colorful design and printed information. It’s like a gift. You break the seal, unfold the package, and there’s your free prize!

That’s the beginning of a circular con game. And you’re the mark, of course.

After you finish the paltry dozen or so pills in your “free” sample, then you begin paying what’s often an exorbitant price for the drug (or your insurance company does). Why is the price so high? Drug companies tell us it’s because their operating budgets are so large. And one reason they’re large is because…companies give away millions of samples.

But let’s call a “free sample” what it really is: nothing more than a very aggressive advertisement. After you’ve seen all the print ads and TV ads, the seller makes one final pitch while actually putting the product in your hand. If they could go one more step and put the pills directly into your mouth, I’m sure they would!

And that’s how this free sample con works–right out in the open where everyone can clearly see each step.

What isn’t so obvious is how much each sample is really worth. And I’m not talking about a pill that a pharmacist could sell, but rather the active ingredient inside the pill.

A few years ago, Life Extension Magazine published a list that compared the consumer price of various drugs to the actual cost of manufacturing the active ingredient. Here are three examples from that list:

• Prozac (made by Lilly)–consumer cost: $247.47 per 100 pills / active ingredient cost: 11 cents per 100 pills
• Xanax (made by Pfizer)–consumer cost: $136.79 / active ingredient cost: 24 cents
• Prilosec (made by Procter & Gamble)–consumer cost: $360.97 / active ingredient cost: 52 cents

There’s only one word for those markups: obscene.

But when drug companies report the value of their free samples to Congress, they give the wholesale or market price, not the actual manufacturing cost of the stuff that makes the drug work.

So you can just imagine what cost they’re quoting to the IRS when it comes time to write it all off as a business expense.

One thing is for sure: The actual drug in a “free” sample won’t cost the drug company much. But it IS going to cost you.

To Your Good Health,

Jenny Thompson

Sources:
“Drug Industry Spends Billions On Free Samples Of Popular Meds” Jared A. Favole, Dow Jones Newswires, 6/4/10, nasdaq.com
“Consumer Rape” William Faloon, Life Extension Magazine, April 2002, lef.org