How a Simple Little Pill Ended Up Costing 1000 Percent More Than Its Ingredients

Devon HerrickA recent New York Times article profiled a pair of ultra-expensive pain medications designed to go easy on the stomach. Common pain relievers, like aspirin, ibuprofen and naproxen are prone to irritate the stomach if taken repeatedly throughout the day. A newer class of pain medication, called cox-2 inhibitors, are the preferred pain relievers for those who cannot take nonsteroidal anti-inflammatory drugs (NSAIDs) on a long term basis. Celecoxib, the generic version of Celebrex, is now available at a cost of about $2 per tablet, but that can add up to about $700 to $1000 per year.

More than a decade ago researchers found that taking heartburn medications with common NSAIDs could mimic the benefits of the costly cox-2 inhibitors. However, the study found (at that time) combining heartburn medications and NSAIDS would not deliver any cost savings due to the high price of prescription heartburn treatments. A lot has changed in the years since the study. The costly proton pump inhibitors for heartburn are now available over the counter (OTC) for $0.31 cents to $0.60 cents apiece. The drugs mentioned in the Times article, Duexis and Vimovo, are based on the premise of combining NSAIDs with heartburn medications.

The catch? Each drug costs more than $1,500 for only a month’s supply. The cost per tablet is $17 and $25 respectively. Why so much? That’s a good question that doesn’t have a logical answer. Although nearly 90 percent of the drugs Americans take are inexpensive generics, a small segment – about 1 percent of all drugs prescribed – falls into a category known as “specialty drugs”.
These are very costly medications, which now accounts for one-third of all drug spending. There is really no logic to what constitutes a specialty drug. They are often biotech drugs, derived from living substances that are both patented and difficult to copy — but not always. Their use is growing, and when a small segment of drugs costs increasingly larger amounts of money, some drug makers are on the lookout for ways to cash in.

Consumers have a better option. My case study illustrates how ludicrous it is to charge high prices for Duexis and Vimovo — or to even sell them as prescription drugs. A daily dose of Duexis requires three $17-dollar pills taken throughout the day. Each pill contains 800 milligrams of ibuprofen and 26.6 mg of famotidine. Ibuprofen is the active ingredient in over-the-counter Advil, which comes in 200mg tablets. Famotidine is better known as the heartburn medication, Pepcid. Pepcid is available over the counter in 20mg generic tablets. Twelve 200mg ibuprofen tablets and 4 generic famotidine tablets equals the ingredients in three Duexis tablets. Every six hours you could take one generic Pepcid tablet, and three generic Ibuprofen tablets, for total cost per day of $0.51 cents. That’s $0.51 cents; not $51 dollars!

The pain drug, Vimovo, is a combination of Nexium and Naproxen. Naproxen is the same drug as over the counter Aleve. Vimovo is available in either 375mg or 500mg doses of naproxen each combined with 20mg of Nexium. Nexium is the Purple Pill for severe heartburn, also available over the counter. Once metabolized in the body, its chemical composition is almost identical an older heartburn medication, Prilosec — known by its generic name, omeprazole. Rather than take two Vimovo tablets every 12 hours at a cost of about $50 per day, you could take two 220mg naproxen tablets every 12 hours along with one generic 20mg omeprazole tablet. Doing it this way would cost only about $0.80 cents per day, much less than the $50 to $55 per day for the pain reliever, Vimovo.

To prevent patients from experiencing sticker-shock when filling their prescriptions, the manufacture of these two drugs often asks doctors to bypass local pharmacies and submit prescriptions directly to its mail-order specialty pharmacy. The drug maker then attempts to collect up to $1,500 per month from patients, insurers and health plans. The intent is to lessen the chance customers will balk when their local pharmacy requires them to contribute exorbitant co-pays.

It may sound a little odd that a drug maker is reformulating cheap, over-the-counter drugs into combination pills costing $17 to $25 per tablet. The equivalent ingredients are available over the counter for $0.17 cents to $0.40 cents. So why does it do this? Because it apparently makes money. However, consumers can do their own repackaging at a 99% discount.

Devon M. Herrick, PhD is a health economist and senior fellow at the National Center for Policy Analysis. He has written on ways consumers can lower their drug spending for more than a decade.

5 replies »

  1. I work at a pharmacy that fills for Horizon products. It is such as a scam. The Horizon sales people are pushy and shady as well.

  2. Herbert Simon explained that as bounded rationality, where people satisfice — making suboptimal decisions — rather than make the effort for an optimal decision. Health care has more than enough perverse incentives that result in runaway costs without letting something like a combination OTC drug be sold for prices similar to specialty drugs.

  3. That is one of the many perverse incentives in our health care system. If your patient were paying the bill out-of-pocket, he or she would be glad to hear about a way to save 99%. But because they are not paying their own bills, your default is to let the insurance pay up to, say, $18,000 per year so you don’t suffer a very, very small liability risk.

    These combinations should be available OTC. But the FDA cannot approve without clinical trials, and no OTC drug maker has an incentive to jump through the hoops for an OTC drug.

  4. By day, Devon earns his keep wailing on the internet about perfidious public policies that distort marketplace outcomes in the healthcare arena. All right-thinking rational men will surely agree!

    Apparently by night he lets his hair down and admits that hey, people will recurrently abide some pretty irrational stuff going on. It turns out that in real life there are almost no right-thinking rational men!

  5. What’s the difference in bleeding events for taking Duexis vs. generic ibuprofen (2400mg/day- wow!) + otc famotidine?

    Thus, what happens when my patient develops a GI bleed after taking 2.4 gms of ibuprofen a day chronically, despite my advising him to add on the Pepcid? Is he going to sue me because I “could have” prescribed him a fancy, expensive medication that his insurance company is paying for, and only requiring him to make a $10 copay?

    BTW, you can get 20 mg famotidine more cheaply as an Rx, than OTC. In Walgreen’s “Value Priced Medication” program, you can obtain 180 famotidine for $20 (as a “Tier 2” med). That’s 11 cents per pill. (22 cents/day)

    Walmart pharmacy also has generic Zantac, 300mg, for $10 for a 90 day supply, and 20mg famotidine 90 day supply, for $10. That’s also 11 cents per day/dose.