Tuesday, July 21, 2009
The Claritin Question
Back in 2000, when I first moved here, I had some sinus trouble and went to the pharmacy to buy some Claritin. Sure enough they had the same pill I knew from home, but the price was completely different. I don’t remember how much it was exactly, but I do recall that my jaw dropped significantly. How was it possible that the exact same medicine cost so much less here? I wrote it off to some sort of subsidies from the French health care system and let it go at that. Since then, I have noticed that almost any medicine you buy here costs startlingly less than it does in the States. And from what I've gathered, drugs are not subsidized here, though I think there may be price caps. It would be one thing if these were French versions made by different companies, but often they are not. They are the same medicines with the same names made by the same company. So how is it that the same pharmaceutical companies who insist that they are obliged to charge outrageous sums for their products in order to keep on top of research, etc. still find it profitable to sell their products overseas for a fraction of the price? I mean, Schering Plough does not sell Claritin in France for charity. If it were not profitable to sell Claritin here, they wouldn’t do it.
What kind of price difference are we talking here? Today I went to the pharmacy to see what Claritin sells for these days. A package of 15 pills containing 10 mg of the active ingredient, Loratadine, costs 5.54 euros here in the suburbs of Paris, or 36 euro cents per tablet. A package of 20 of the same pills costs $18.99 at Walgreens online, or $.95 per tablet. That’s almost three times as much (OK, if you want to take the exchange rate into account, it’s about two times as much, but that’s still quite a mark-up and besides, if you live in euros they have the same impact on your wallet as dollars). Interestingly, when I looked around the Internet I stumbled on an article in the New York Times Magazine (“The Claritin Effect, Prescription for Profit,” March 11, 2001), that mentions this international price difference on the first page of an 11-page investigation into the machinations of Schering Plough in its quest to get this expensive, and not particularly effective, pill to market. What’s more, it seems that the price of Claritin has actually dropped in recent years; another NYT article shows that when it went over the counter in 2003 the price fell from $3 to $1 per pill (“Nothing to Sneeze At,” May 7, 2003). The author of the article seemed to think this was a great savings to consumers, which it was, but when you realize that overseas consumers are paying a third of that “low” price, the savings doesn’t seem that great.
So here’s my question: what’s the deal, Schering Plough? How do you justify your prices? Why is it OK to gouge American consumers, when you know you can make a good profit selling at lower prices in Europe? Is it because Americans are so used to sky-high pharmaceutical prices that they just don’t question them?
Let’s hope that new health care bill makes it through the Senate in one piece. It’s time to start questioning.