Drug Rep Accidentally Emails Consumer Truth About Overpriced Pills

Reddit user TheKarateKid says he emailed a major drug company asking why their $500 version of a $10 generic is worth the $490 markup. The drug company rep accidentally emailed the customer back this message intended for her colleague.

Translation: it’s so you can continue to enjoy our quality advertising!

[via Reddit]

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  1. Hungry Dog says:

    This does not surprise me in the least bit.

  2. knackeredmom says:

    I’d like to know what the drug is, just out of curiosity. Looks like someone new will be reporting to Jim very soon!

  3. Marlin says:

    I use to work Pharm. Had free soda fountains in the break room, free breakfast every other friday, and hugh fridges. That was just the break room. Let alone the upper MGRs got piles of stock and bonus money etc…
    Gotta pay for that some how.

    • GuyGuidoEyesSteveDaveâ„¢ says:

      WHOA. You are telling me your company had fridges in the break room? Were y’all allowed to use them, or could you only look at them? I’ve never had a job that had fridges available to the employees….

      • jimmyhl says:

        He said they had hugh fridges in the breakroom. Don’t you remember. Hugh Fridges, the guy from Baywatch.

      • Marlin says:

        Think large industrial restaurant quality and sized fridges.

        Plus the single cup coffee machines with all the flavors. Can;t remember the name but you put the little flavor cup in an dit serves one cup of that flavor.

        Lots of other fun stuff as well, let alone the bonus money. ;-)

      • Berrygirl says:

        You can be such a dick at times…

      • Berrygirl says:

        You can be such a dick at times…

        • GuyGuidoEyesSteveDaveâ„¢ says:

          I worked for a credit card company, and we also had huge fridges and the rest. Our Delaware office had a free gym, arcade, etc… Happy employees are usually better employees, and save/make you money in the long run. Do you fault someone for investing 5k in their house to increase the value 10k?

    • Hoss says:

      It’s not just company perks, it’s the money they spend on doctors to get them to prescribe their products.

    • George4478 says:

      Hugh Fridges…

      Should I know who this guy is? Is he some famous actor or something? Took second place on American Idol? A finalist on Survivor: Bed-Stuy?

      I need to read People magazine more often….

    • frank64 says:

      See, everyone who won’t shop at Walmart because of the low wages should make a point of paying $500 for $10 drugs. See how great they treat the employees! I think we should all support such a great company. (:

    • MrEvil says:

      I work for a semiconductor company. We have soda machines that dispense free cokes all day long, plus coffee and tea. We have breakfast burritos every monday morning.

      Its not that uncommon to encounter these types of office perks when you get up the corporate ladder.

      • pot_roast says:

        Actually, that stuff was very common at the bottom of the ladder during the Dot Com Days… some of it is still around.

      • misslisa says:

        Way to go – When I worked at the chipmaker that rhymes with “in hell”, there was no free anything, not even coffee ($1.50 for my daily cup in the cafeteria sure added up). Now that I’m with a software company, we enjoy the same perks you describe, and many more. It was good for me to read this; reminds me to appreciate the niceties my career provides.

    • Awesome McAwesomeness says:

      I just read an article in Scientific American Mind that talked about how perks can increase productivity by up to 30%. Increased productivity can greatly reduce company costs. It isn’t all cut and dry that those things just cost everyone money and have no benefit.

      Offering a few cheap perks+ letting people decorate their offices how they want+ allowing people some autonomy in their job= Big gains in productivity=Saving on labor costs. I

      • sonneillon says:

        Agreed.

        Not that I am defending big Pharm because as an industry it is incredibly crooked, but your example is correct.

      • TheGreySpectre says:

        Big pharm isnt the only one to provide those perks either. I know Google provides really nice food so do bungie and blizzard.

        Not that I really want to side with big pharm…but if we could get more companies to provide perks that would be kind of awesome.

    • dolemite says:

      Nevermind the fact the drug salesmen buy buffets for the doctors/hospitals, other free perks if you “peddle” our drugs, etc.

      • UCLAri: Allergy Sufferer says:

        My wife worked for a doc at UCLA and is now a med student herself. She said that a lot of major hospitals are doing what they can to end pharm reps’ wining and dining of docs.

        In any case, it seems many docs are starting to turn down the reps because it all got so out of hand.

        • Clyde Barrow says:

          Hey dude, at least get your wife to ask the Pharm’s to pay for your medical school loans first before making this change.. lol. Hey it’s worth a shot!

        • Scoobatz says:

          Everyone’s quick to blame the sales people, but I have news for you… many times, the doctors are the problem. Lots of them demand to be treated this way, or they won’t buy products from reps. I’m not in sales myself, buy I have lots of friends who are. They all tell the same stories about doctors who want seats to professional sporting events, then turn them down because they’re not good enough. Or, they want to eat at the best restaurants on short notice — with their entire family — and demand that transportation be provided in the form of door-to-door limo service. Bunch of fucking pricks. I don’t have thick enough skin to put up with that shit.

          • operator207 says:

            THIS. My last gig was “roaming IT” for a medical company that serviced GPs and some specialists. One location with 9 doctors, had lunch every day. Very nice $15 to $35 a plate lunch. ya you were eating on paper plates and using plastic forks, but you were eating steamed asparagus, steak and baby carrots, or expensive BBQ. That was my main location, so I was housed out of that location. I usually stayed there unless was called out to another location. I ate lunch for free almost every day. If for some reason a drug rep did not provide lunch one day, the ENTIRE STAFF (including the nurses, the clerical staff, and the “girls at the registers”) would bitch up a storm. If that happened, usually one of the mangers would buy pizza, dominoes or pizza hut. They would get their free lunch, but still complain that the pizza was not specialty pizza, with artichokes or fresh basil on it.

            I have overheard many a doctor tell a drug rep that they wanted other things (like the sports seating or expensive dinners) or they would tell their patients to use any other drug than the drug reps.

            One of the nice things about the drug reps perks was most of the doctors did not want them. I still have Viagra post-it notes and little bags (work perfect for a trash bag in my car) and a really nice flashdrive/laser pointer/pen, with a Viagra logo on it.

            • Rena says:

              “one of the mangers would buy pizza, dominoes or pizza hut.”
              I like how you imply that Pizza Hut is not pizza. :-p

            • Rena says:

              “If that happened, usually one of the mangers would buy pizza, dominoes or pizza hut.”
              Heh, not to be a grammar Nazi, but this got a laugh out of me as it reads as “pizza or Dominoes or Pizza Hut”, implying the latter two aren’t pizza. (Maybe that was intentional?)

              (I was going to correct my other reply, but apparently it vanished. >.>)

      • catastrophegirl chooses not to fly says:

        the changes to the PhRMA code mean a whole lot of that is going away.
        http://ethics.doodig.com/2010/02/02/proof-of-compliance-with-the-new-phrma-code/

    • richcreamerybutter says:

      The Devil used to be a guaranteed well-paying gig, but in my field it’s no longer “trickling down” as it used to. There’s no point in selling your soul anymore for that price.

    • catastrophegirl chooses not to fly says:

      i think we used to be coworkers

  4. Muddie says:

    A rep was asking for help on what to tell a client. This isn’t scandalous. It also isn’t rocket science. What did the writer expect to get back other than the typical corporate canned response?

    • GuyGuidoEyesSteveDaveâ„¢ says:

      Don’t you know that the only ones who can gouge prices for un-regulated meds are the anti-big Pharma people? I mean, $20 for rose hips? Roses grow in my back yard. Why should they cost so much? And is $10 the cost w/coverage?

    • ames says:

      it’s not that the rep was asking for advice, it’s the implication that there actually isn’t a good reason for the $490 price difference – other than they just automatically raise the price every few months.

      And no one’s saying it’s SCANDALOUS – more pointing and laughing, and “we knew it”.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • Muddie says:

        The title of the article makes it sound like the consumer got an email which — well — had the truth about their cost structure when all it was was a request for wording from another rep.

        Very misleading (and very evening news-y) headline, Consumerist.

      • trentblase says:

        But the drug rep didn’t “accidentally email the truth” about overpriced pills. The information in the email is “what [they] always tell customers,” so no secret truth.

    • denros says:

      What’s wild about this is that the drug companies still act like we don’t know this, or at least care. It’s like when you were maybe 9, 10 years old, you pretty much had it figured out that there was no Santa, but everyone just kind of kept on like the fat man was actually coming down the chimney in the middle of the night.

    • Muddie says:

      ACK! Sorry for the multiple comments!. My browser couldn’t connect and kept retrying. Terribly sorry!

    • Muddie says:

      ACK! Sorry for the multiple comments!. My browser couldn’t connect and kept retrying. Terribly sorry!

    • Muddie says:

      ACK! Sorry for the multiple comments!. My browser couldn’t connect and kept retrying. Terribly sorry!

  5. VeeKaChu says:

    “What we can get away with!” is the new “What the market will bear”.

  6. aaron8301 says:

    Reply All != Reply. Email fail.

    • Donathius says:

      There’s someone in one of the academic departments I support that has no idea how to send an email to just one person if he can’t reply to one of that person’s emails. Instead he keeps one email that was sent to the whole department and just uses “Reply All” when he needs to send an email to just one person.

      Everyone got a good laugh when he asked the administrative assistant out (she said no).

      • jesirose says:

        Why don’t you support him, and go show him how to do it the right way?

        • dpeters11 says:

          There are times where you just give up and let them do it their way. I spent 20 minutes trying to tell someone that they needed to dial a 1 before area code on a land line. I eventually gave up and just told her to use her cell phone.

        • AstroPig7 says:

          I once spent 15 minutes teaching a corporate vice-president how to cut and paste using the mouse. He had a copy of Paris Hilton’s sex video on his desktop. Some people are just clueless.

  7. Hoss says:

    Will Jim allow the account manager to say if they charge $400, the health insurer gives us $10. If we charged $10, we’d get enough for penny candy

  8. NeverLetMeDown says:

    The real answer is “you’re perfectly welcome to buy the generic.”

  9. DarrenO says:

    While I’m not a fan of high drug prices, I think what people almost always forget is research and development costs. Yes, when a generic comes out by all means buy it but it’s the companies that put money into R&D that come out with the new drugs that save lives and that costs big bucks.

    • john says:

      You need to stop using facts and logic here. People won’t like it.

      • DarrenO says:

        lol.. sorry.. I’ll try to curb the common sense!

      • ParingKnife ("That's a kniwfe.") says:

        How is it logical? There are no facts here. The drug industry doesn’t spend half as much on R&D as the PR departments would have you believe, and by the time a generic can hit the market they’ve had their bite at the apple anyway. They extend patents in the most dishonest ways- they’re tack on an antacid functionality and pretend that it’s suddenly a new super amazing drug when it’s just an old patenting trick.

        • zt says:

          See the following study: J. A. DiMasi, “The price of innovation: New estimates of drug development costs,” J. Health. Econ., 2003, 22, 151-185. While getting a little old now, most people consider this the best study of the total cost of bringing a new drug to the market. The figure he came up with is that companies spend, on average, $802 million for every new drug brought to market. People can argue one way or the other about some of the assumptions (it is a very complex business, some people argue for a much higher cost, some a much lower cost), but, the fact is, it is really really expensive. I’m not saying that there is no waste, that some things couldn’t be done more efficiently, etc., but there is really no way that we know of to dramatically substantially lower the cost.

    • uber_mensch says:

      Lets not forget research is subsidized by the government through grants and university research.

      • Bonster says:

        Some is. A lot is not. Funding has become increasingly scarce, and you may be underestimating just how much time and money goes into researching these things.

        I’m not saying I like these things – without insurance, I would be paying close to $700 a month in prescriptions.

      • zt says:

        The majority of research and development costs for new drugs is not funded by government grants or performed by academia. On average, a drug company will spend close to one billion dollars for every new drug that comes to market. This is before they make any money from that drug. This is the major reason that branded drugs are so much more expensive than generic. The R&D costs for a generic company are negligible (pay some lawyers, read patents, do some cheap bioequivalence studies).

    • Sneeje says:

      Huh? No one’s forgetting that, but R&D is a sunk cost and by the time generics are an alternative, have long been recouped.

      What you should be saying is: everyone forgets “patents” which allows them to maintain an artificial monopoly and charge whatever they want instead of letting the market setting the price.

    • Hoss says:

      Not to mention the millions they spend on wining and dining docs to get them to prescribe their products. (BTW — if a genetic is available, the R&D is long recovered)

      • GuyGuidoEyesSteveDaveâ„¢ says:

        And do the new drugs develop themselves? And what about failed drugs? Do you get all the money you paid into R&D refunded by your employees?

        • ParingKnife ("That's a kniwfe.") says:

          I wasn’t aware it was my job to pay for failed drugs.

          • zt says:

            Unfortunately, we have no way to tell which drugs will fail until, well, they have failed. So it *is* absolutely your job to pay for failed drugs. If we can’t pay for the failures, drug research and development will stop and there will be no new drugs.

    • Mecharine says:

      Research costs for drugs, once they go to market, is considered a sunk cost, as in a cost that does not re-occur. Now, the cost for advertising those drugs are not sunk costs, because they do reoccur. A already manufactured drug doesn’t accrue costs for merely existing, even when you increase manufacturing costs.

      • zt says:

        Research and development are sunk costs, but the company still needs to make money if it is going to be able to fund additional research and bring new drugs to the market. Drug discovery is very expensive. If we think there is no need for any new medications, if we have solved everyone’s health problems, then we can stop funding further discovery efforts, and cut prices on current drugs. I think there are still huge unmet medical needs, and I want to see drug research continue.

    • Conformist138 says:

      You know who I love? Jonas Salk, the guy who led the team that developed the first polio vaccine. He didn’t want to get rich, he didn’t want anyone else to get rich off it either. He did the work purely for the love of research and the knowledge that he’d done something important for people all over the world. There wasn’t even a patent on the vaccine (“There is no patent. Could you patent the sun?”) and it was able to reach everyone and virtually wipe out the disease.

      Now, he was working for a university and not a private pharm co, but it still proves that real cures CAN get needed R&D at a cost that doesn’t require milking every penny from those who need it most. The trick is to not be greedy and demand ever increasing riches into infinity on the grounds that you “earned” it. That will just impede the whole reason you actually deserved recognition in the first place- the help you provide goes down when fewer people can’t afford the cure and the disease is still a real threat. It’s a catch-22: To be truly deserving of great rewards, you often can’t accept them.

      We need more people like Dr. Salk.

    • grumpygirl says:

      I don’t forget about that. I also don’t forget about the fact that because of all the strict, price-controlled contracts the Pharma companies are in with other countries, the US market pays all the R&D costs for the entire world. It’s an interesting situation we’re in where one nation is paying for the drug R&D costs for an entire planet.

  10. El-Brucio says:

    “Because we are hoping that most people are unaware that the generic exists yet and plan to milk this for all it is worth until people wise up”.

    I do have some sympathy for the pharmaceutical industry, because their R&D costs aren’t cheap compared to a lot of other industries, but I swear, some of the pricing sometimes seems to be built on “They need this or they’ll die. We can charge whatever we want. Bwahahahaha!!!!”

    • Keavy_Rain says:

      There was a conservative radio show host here in Sacramento, CA (Not sure if he’s still on the air) who used to go on about how we’ll never see another cure for anything ever again because you can only sell a cure once, whereas you can sell a treatment forever.

      Your comment made me think of that.

      • jimhsu says:

        Forgot which post it was (I think also on Consumerist)… but if big pharma were to actually invent a cure(1) for cancer(2), you bet their marketing budgets that they would market and distribute the hell out of it. Why? a) big pharma have people that either have, or know of someone who has, the condition in question and want every way possible for that treatment to become reality, AS LONG AS it passes safety/efficacy/approval, and b) what better way to market NEW drugs than to have the reputation as “X. The company that cured cancer. Now bringing you Y?” It’s just that treatments and lifestyle drugs are a) far easier to develop, and b) far easier to prove efficacy (progression free survival, QALY/$, MFS, pick your poison) than one-shot blockbuster cures. Like any reasonable profit-oriented business, they pick the conservative approach and leave the one-shot blockbuster approach to small biotechs (then they buy them right up).

        1) Defining cure to be a treatment that completely prevents the possibility of reoccurance
        2) Defined either as a specific cancer, or cancer in general

  11. JoJack82 says:

    If you want a good idea of why drugs cost what they do check out episode “392: Someone Else’s Money” of This American Life. It originally aired October 16th 2009.

  12. ashmelev says:

    Pharma companies have about 25 years from the initial drug development application to the patent expiration. It takes years to develop the drud and run it thru FDA mandated multiple phases of clinical trials. At the end, when the drug hits the pharmacy shelves and commercials start to roll on TV, pharma companies are left with 5-10 years left until their drug patent expires. They also need to recoup the marketing costs which nowadays may be half or even comparable to the drug development cost.

    The generic drugs approval is less complicated and it takes only few years of development and testing. Their interaction with other medications is not tested as rigorously as the brand name drugs.
    Also, even that the generics may have the same medication formula as the brand name drugs, other packaging components may be different so the generic pill may release the medication faster or slower and be not as effective as the brand name drug.

    So there’s a reason for generics to be cheaper, but the bran name drugs could be sold cheaper after the patent expiration as well.

    • AstroPig7 says:

      Couldn’t they cut out most of the marketing campaign and reduce their overall costs? Why do they need to run commercials for a prescription-only drug? I know doctors who hate being asked by patients about irrelevant or less-effective treatments that they saw advertised during their favourite show, and I’m sure that they’re not in the minority. Doing your own research is one thing, but if a commercial gives you better information than your doctor, then you’re seeing the wrong doctor.

  13. Awesome McAwesomeness says:

    They do it for the same reasons Medco (my prescription insurance provider) charges $90 for a Target $4 generic–because they are assholes. At least the pharma company won’t call your doctor behind your back, tell him you want to use their prescription service when you don’t, and charge you $90 for each drug, then send it to your house. When you open the package, not sure what it’s for, they then promptly refuse to allow you to return it because it may have been tampered with, leaving you with an almost $300 bill for $12 worth of drugs.

  14. TWSS says:

    Weird. Any pharma PR department worth their salt has a boilerplate response to this sort of request.

    Also, I’d much rather see a leaked response to the question of how drug companies get away with tweaking their formulation just enough to qualify for a new patent – but not enough to increase efficacy to any statistically significant degree (e.g., Prilosec and Nexium).

  15. dreamking says:

    No one wants to come out and say it, but there is such a thing as too much profit on something. Normally the forces that would control prices have been mitigated by the lack of competition or by political shenanigans. The health insurers can’t get their heads wrapped around the idea that they should be covering kids is because they can’t understand they’re being told their margins are too high. Instead of the government being used to minimize external competitive pressures, the government – for once – was being used to apply indirect pressure on prices. They’re being told you -can’t- expect to make 40% net profit while simultaneously selectively reducing human ‘risk’ in your pool every chance you get. American citizens aren’t cars. (I’m not a fan of doing this with all things, always, but when it comes to health care – and infrastructure – it’s a common public good.)

    Likewise with any industry that’s long become addicted to the cudgel of helpful government interference and legal protections. They’re going into withdrawal, and they hates it. Oh they hates it. I completely respect research and development costs. But you don’t get to cry high research costs AND net huge returns AND charge so much above the floor price for the same drug without consequences. At least, one shouldn’t.

    • NeverLetMeDown says:

      40% net margin? That’s hysterical. Take Pfizer, for example. Over the last twenty years, their average net margin has been about 16%.

  16. kursk says:

    I can only imagine the sink that hit the feeling of that CS rep when he realized he hit REPLY ALL. And then the feeling when his/her boss came into the cubicle to let them know they were now famous.
    Now THAT is going to show up on their performance review…..

  17. EllenRose says:

    There’s one specific example that especially grates on me: Provigil and Nuvigil. Provigil is about to go generic, so Cephalon introduced Nuvigil. It is simply the more effective isomer of Provigil. They’re giving out all kinds of ‘free trials’ on Nuvigil. That’s legitimate.

    Meanwhile, they’ve raised the price of Provigil sky-high. I cannot but think they did it to make Nuvigil more attractive – if a drug works for you, it makes sense to stick with that drug, unless the cost is prohibitive. This way they’ll have a substantial user base for Nuvigil that won’t go away when Provigil goes generic.

    http://blog.prescriptionaccess.org/?cat=426

    • Bort says:

      look at xyrem, the price is going sky high every year, the R&D costs were about zero, production costs are miniscule…

  18. pegasi says:

    there’s no restriction on profiteering, charging “what the market will bear” and basically making the US consumers pay the development and profit costs for new drugs, so companies charge whatever they can get away with, until public outcry makes them do something.

    when they can get away with 500-1500% profits on generics at the pharmacy level, then there’s something wrong. It’s just profiteering on the backs of people who can’t go anywhere else for the meds, other countries limit profit-taking and we don’t, so we get the overcharging.

  19. gianspi says:

    The drug costs a fraction of a penny to make, but it took $1b to make the first one.