Suppose Company A who is a resident pharmacy in Texas but conducts business in all 50 states does sterile compounding of pet medications. It buys the cheapest powders it can get. The powders come from overseas and are not USP grade powders. The powders are never tested before they are used in the compounds. The pharmacist is never in the sterile room. Instead, the tech compounds the medication. The pharmacy believes that testing of the compounded medication is entirely too costly so no test for stability, potency, etc. is done. There is no way to comply with the laws and regulations of all 50 states so they ignore all laws and regulations. They sell the compounded tablets for 10 cents each, making a $2.00 profit on each tablet.
Company B who is also a resident pharmacy in Texas only does business in Texas, Oklahoma, Louisiana, Georgia, and Tennessee. They only buy powers from the same reputable company overseas. The powders are USP grade powders. Compounded medication is never made without the pharmacist present and who is in fact doing the compounding. Each batch is tested for stability, potency, etc. even though these test are very costly. The pharmacy makes every effort to comply with the laws and regulations of five states it does business in. It has an attorney on retainer who regularly reviews the laws and regulations and procedures of the pharmacy and pharmacists making sure compliance is not an issue. They sell the same table made by Company A for $1.00 and make only 50 cents profit on each tablet.
Company A has 30 sales representatives in Texas alone. It has over 1000 national wide. It does mass marketing of its products, advertising on the Internet, through the mail, and flyer's, Each form of advertising claims that no one came beat Company A's price on compounded medications. The company also claims that of the compounded tablet that it sales for 10 cents each, it mass produces them, making about 10,000 of these tablets per month. The company claims the price and amount of tablet produced each month makes it the best company to purchase these tablets from.
Company B has only 5 representatives who are paid a salary. It does not have a price list. It does not advertise a price. It does not mass produce the tablets. Instead, it only produces the tablets when there is a specific order for the tablets. This company always offers its test results to any veterinarian it is trying to do business with.
The problem Company B always has is that the veterinarian always wants to know what the price of the tablet is. The veterinarian wants to know because Company A's sales representatives have already been in the vet clinic and offered to sell the tablets for way cheaper than any other company whose rep has been by the office. Nothing Company B's rep says will probably matter because the veterinarian wants the cheapest product for his customer. It does not seem to matter that test are not preformed on the powders or the tablet. It does not seem to matter that the tablet compounded by Company A may in fact not work and may in fact be harmful.
This is a perfect example of why PRICE should not be a factor in purchasing compounded medications. I have previously posted a blog entitled, Repost: Two Key Things Regarding Compounding: Follow the Applicable State Law and Price Should Not Be A Factor, arguing that if price is advertising the FDA may consider this manufacturer. I have posted that "you get what you pay for" in A Heavy Price to Pay For Cheaper Drugs and posted The Value of FDA-approved Drugs--Price Alone Not Justification to Compound In considering new laws and regulations, Congress, the FDA, and states need to clearly state that price is not a factor in two areas First, it is not a factor in deciding whether to in fact compound a medication. Second, it is not a factor in determining which compounding pharmacy to purchase from. Along this line, no price list can be used to make the sale of the compounded product. If all compounding pharmacies and pharmacists are following the same laws and regulations then the price for each compound should technically be fairly close among all compounders.
Should price be a factor or not? If it is a factor, shouldn't it be a factor indicating that the pharmacy is in fact a manufacturer? What do you think?
Company B who is also a resident pharmacy in Texas only does business in Texas, Oklahoma, Louisiana, Georgia, and Tennessee. They only buy powers from the same reputable company overseas. The powders are USP grade powders. Compounded medication is never made without the pharmacist present and who is in fact doing the compounding. Each batch is tested for stability, potency, etc. even though these test are very costly. The pharmacy makes every effort to comply with the laws and regulations of five states it does business in. It has an attorney on retainer who regularly reviews the laws and regulations and procedures of the pharmacy and pharmacists making sure compliance is not an issue. They sell the same table made by Company A for $1.00 and make only 50 cents profit on each tablet.
Company A has 30 sales representatives in Texas alone. It has over 1000 national wide. It does mass marketing of its products, advertising on the Internet, through the mail, and flyer's, Each form of advertising claims that no one came beat Company A's price on compounded medications. The company also claims that of the compounded tablet that it sales for 10 cents each, it mass produces them, making about 10,000 of these tablets per month. The company claims the price and amount of tablet produced each month makes it the best company to purchase these tablets from.
Company B has only 5 representatives who are paid a salary. It does not have a price list. It does not advertise a price. It does not mass produce the tablets. Instead, it only produces the tablets when there is a specific order for the tablets. This company always offers its test results to any veterinarian it is trying to do business with.
The problem Company B always has is that the veterinarian always wants to know what the price of the tablet is. The veterinarian wants to know because Company A's sales representatives have already been in the vet clinic and offered to sell the tablets for way cheaper than any other company whose rep has been by the office. Nothing Company B's rep says will probably matter because the veterinarian wants the cheapest product for his customer. It does not seem to matter that test are not preformed on the powders or the tablet. It does not seem to matter that the tablet compounded by Company A may in fact not work and may in fact be harmful.
This is a perfect example of why PRICE should not be a factor in purchasing compounded medications. I have previously posted a blog entitled, Repost: Two Key Things Regarding Compounding: Follow the Applicable State Law and Price Should Not Be A Factor, arguing that if price is advertising the FDA may consider this manufacturer. I have posted that "you get what you pay for" in A Heavy Price to Pay For Cheaper Drugs and posted The Value of FDA-approved Drugs--Price Alone Not Justification to Compound In considering new laws and regulations, Congress, the FDA, and states need to clearly state that price is not a factor in two areas First, it is not a factor in deciding whether to in fact compound a medication. Second, it is not a factor in determining which compounding pharmacy to purchase from. Along this line, no price list can be used to make the sale of the compounded product. If all compounding pharmacies and pharmacists are following the same laws and regulations then the price for each compound should technically be fairly close among all compounders.
Should price be a factor or not? If it is a factor, shouldn't it be a factor indicating that the pharmacy is in fact a manufacturer? What do you think?
1 comment:
The phrase isn't "You get what you pay for". You often get less.
A better phrase is, "You don't get what you don't pay for." as you rarely get more.
A pharmacy that advertises based upon price (such as Rejuvi Pharma did to me when they wanted my business) often is cutting corners (as they were proven to do, and now only have a license because they agreed to a pretty strict probation term and a lifetime ban on dispensing controlled substances or sterile/injectable products).
Ken Woliner, MD
www.holisticfamilymed.com
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