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 Samâ€™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 Samâ€™s Club, the price differences were astounding. Here are the prices he found at Houston stores for 90 tablets of generic Prozac:
Samâ€™s Club: $15
Those arenâ€™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 Walgreenâ€™s instead of Costco?
His answer: if a retiree is used to filling his prescriptions at Walgreens, thatâ€™s where he fills his prescriptions â€” 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.