Walgreens- Unfair Pricing

Over at the Freakonomics blog they have a post that is quite disturbing.

Many of his patients, he explained, must pay for their drugs out-of-pocket, and yet even the generic drugs at pharmacy chains like Walgreens, Eckerd, and CVS could cost them dearly.

So Wolf began snooping around and found that two chains, Costco and Sam’s Club, sold generics at prices far, far below the other chains. Even once you factor in the cost of buying a membership at Costco and Sam’s Club, the price differences were astounding. Here are the prices he found at Houston stores for 90 tablets of generic Prozac:

Walgreens: $117

Eckerd: $115

CVS: $115

Sam’s Club: $15

Costco: $12

Those aren’t typos. Walgreens charges $117 for a bottle of the same pills for which Costco charges $12.

I was skeptical at first. Why on earth, I asked Wolf, would anyone in his right mind fill his generic prescription at Walgreen’s instead of Costco?

His answer: if a retiree is used to filling his prescriptions at Walgreens, that’s where he fills his prescriptions — and he assumes that the price of a generic drug (or, perhaps, any drug) is pretty much the same at any pharmacy. Talk about information asymmetry; talk about price discrimination.

Read the whole story.

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  1. Jack's Shack March 22, 2007 at 7:18 am



  2. Joe the Troll March 21, 2007 at 6:55 pm

    My Costco membership is about $50/year. Anyone who can pay $117 for a prescription can pay $62 for a membership and that same prescription.

  3. Jack's Shack March 21, 2007 at 3:19 pm

    Big noise,

    I hear what you are saying.

  4. Kol Ra'ash Gadol March 20, 2007 at 9:36 pm

    I saw this on boingboing – veeeery interesting.
    As someone who currently has to pay costs for drugsout of pocket, it makes me very glad that we got the CostCo card – we checked the web for pricing a,nd that ‘s how we came up with it. I love the unbeliveab;e markup though – that’s the truly amazing part. Hundreds of percentages above cost.
    It’s not like drugs are usually so chep to start with y’know?

  5. Jack's Shack March 20, 2007 at 4:51 pm


    I understand that too. But at the same time look at the prices.A $100 more covers a yearly membership fee and the drugs.

  6. Annie March 20, 2007 at 4:24 pm

    Jack- also, it costs money to be a member of Costco/Sam’s club. For many people, that kind of outlay of money, even if it would save later on, is impossible.

  7. Jack's Shack March 19, 2007 at 8:52 pm

    I can appreciate that, but to save a 100 bucks…


    The first time ever?

  8. Paula March 19, 2007 at 6:13 pm

    I just went to Costco for the first time on Saturday – had to park like a half-mile away cuz it was so crowded. That could be an issue for an old and/or sick person as well. When I go to Walgreens, I usually get a spot right by the door, and they also have a drive up Rx window. But most likely people just don’t know about this.

  9. Anonymous March 19, 2007 at 5:48 pm

    “Why on earth, I asked Wolf, would anyone in his right mind fill his generic prescription at Walgreen’s instead of Costco?”

    Answer # 2: Because I can walk to Eckerd, but it would take me 45 minutes each way to get to Costco. This could be a time-management problem for a person who’s employed full-time or a stay-at-home parent (especially one with a disabled child) with no car.

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