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Uncovering the Hidden Factors Behind High Drug Prices

Are you wondering why weight-loss drugs like Wegovy and Zepbound cost over $1000 a month in the US when they only cost about $25 a month to manufacture? It’s shocking, but there’s more to this story than meets the eye. 

The cost of drugs has been skyrocketing, especially in the US, where the pharmaceutical industry is heavily influenced by lobbying. While a month’s supply of Wegovy costs around $1350 in the US, it’s about $500 in Canada – still steep compared to the $25 production cost, but much lower than in the US.

So, why are these drugs so expensive? 

First, there are the usual suspects: inflation, new technologies, distribution, marketing, and the need to make a profit for shareholders. Then, there’s the substantial investment in research and development, which can reach nearly $2 billion. Companies need to recoup these costs, hence the high prices.

Another factor is drug patents. Once a patent expires, generic versions can enter the market, often at lower prices. This limited window to make back their investment incentivizes companies to hike prices even more.

However, drug companies might not be the only problem. Enter Pharmacy Benefit Managers (PBMs) – the middlemen who manage prescription drug benefits for insurers. PBMs decide which drugs are covered, process claims, negotiate prices, and set patient copays. They’re supposed to make drugs more affordable, but they often blame high prices on drug companies.

The top three PBMs in the US – Express Scripts, OptumRx, and Caremark – are among the top 40 US companies by revenue. For a drug company to sell through a pharmacy, they must go through a PBM, which demands rebates on top of drug costs. These rebates don’t go to patients but to the PBMs, sometimes making up 70% of a drug’s cost.

For instance, Wegovy costs $1350 a month in the US. If a PBM like Express Scripts demands a 70% rebate, that’s $945 of the $1350, leaving $405 set by the drug company. This price aligns more with what we see in other countries.

Why is the US particularly affected? Three big PBMs control 80% of the market and have been scrutinized for anti-competitive practices. This issue is spreading to other countries, but many, like Canada, have price caps to prevent drug costs from soaring. Despite this, PBMs’ influence is growing, fueled by increased lobbying spending.

Drug companies aren’t blameless, but PBMs are a significant part of the problem. What can you do? Contact your lawmakers and push them to act in the public’s interest, not just for payouts.

Thanks for watching and always remember: small tweaks lead to massive peaks! 

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Don’t forget to hit the subscribe button for more insightful content, and consider joining our YouTube Members Membership for exclusive benefits and monthly live sessions. 

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Watch my previous videos to learn how to fight obesity and about the best medicine for weight loss: 
▪️ Watch This Before Taking Mounjaro  
▪️ From Ozempic to Mounjaro 
▪️ Muscle Loss with Ozempic, Wegovy & Mounjaro 
▪️ Managing Nausea from Ozempic, Wegovy and Trulicity!  
▪️ Ozempic: Stomach Paralysis Update  
▪️ How to Switch from Ozempic (or Wegovy) to Mounjaro  
▪️ Ozempic Paralyzed My Stomach 
▪️ How to Inject Mounjaro: step-by-step tutorial

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Live in Alberta? Come see me at my Pharmacist-led Obesity Clinic at Apothecare Pharmacy – http://apothecarerx.ca 

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Products I recommend to support your weight-loss journey: 
▪️ Managing Constipation 
▪️ Managing Diarrhea 
▪️ Managing Heartburn 
▪️ Internalized Weight Bias 
▪️ Protein Bars
▪️ Scales and More 
▪️ Supplements 
▪️ Activity Trackers  
▪️ My favorite Books 

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Dr. Dan

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