Free drug samples will eventually cost you

The first taste is free

When your doctor hands you a free drug sample, you don’t get it in a generic, amber-colored plastic bottle. The pills are usually packaged 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.

Driving pills home

In 2005, the drug industry spent $18 billion on free drug samples. And in 2007, just five companies (Pfizer, Merck, Lilly, Baxter, and Abbott) collectively spent about $3 billion on 240 million samples.

This year, they’ll probably all spend much more because Pfizer, Merck and other companies have made their drug dealing even easier. Now doctors can order samples online. No need to wait for a sales rep to pay a visit. Just go online, point, click–done!

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

Well, after you finish the paltry 10 or 20 pills in your “free” sample, then you begin paying what’s often an exorbitant price for the drug (or your insurance company does). Of course, drug companies tell us prices are high because their operating budgets are so large. And one reason they’re large is because…they give away millions and millions of free 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, it’s like the seller makes one final pitch while your doctor actually puts the product in your hand.

And that’s how the 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 end up costing YOU.

Sources:
“Drug Industry Spends Billions On Free Samples Of Popular Meds” Jared A. Favole, Dow Jones Newswires, 6/4/10, nasdaq.com
“Pfizer Meets Doctors Online With Free Drug Samples” Peter Loftus, Dow Jones Newswires, 12/14/10, nasdaq.com