In a world filled with uncertainty, one thing we can count on is that drug prices will rise and fall (sometimes significantly). Knowing when and how much to expect on the pharmacy counter can be difficult. That’s why it’s important to have a general understanding of what’s going on with the drug prices as they relate to you as a customer. Below we’re going to walk you through some useful information about average wholesale prices of popular prescription drugs, including Viagra (sildenafil). We’ll begin by defining some key terms and presenting a high-level overview of what’s going on with drug prices. Then we’ll get into the weeds and provide more details on Viagra. At the end of this article, you’ll have all the information you need to know about average wholesale prices of Viagra and other drugs.
What is the Average Wholesale Price of a Drug?
The terms “average wholesale price” and “average retail price” are often used synonymously. However, they are not the same thing. Availing wholesale discounts is one strategy for lowering your drug costs. Learn more about the average wholesale price vs. average retail price here. The average wholesale price is the amount a drug company or distributor charges for a drug before the company or distributor takes into account the cost of manufacturing, transportation, and marketing. You’ll often hear pharmaceutical companies advertise that their drugs are “generally” or “on average” affordable, because they have built-in discounts for government programs like Medicare and Medicaid into their prices. These are average wholesale prices. The average retail price (or list price) is what a pharmacy or other retail stores charge for a drug without taking into account any discounts.
Why Are Drug Prices Rising In General?
Although there are exceptions, over the last few years drug prices have been increasing as a general matter. In 2019 alone, prescription drug prices rose by an average of 4.4%
One factor likely contributing to this trend is the steady rise of generic competition. Because generic drugs are equally effective as the brand name drug (with some exceptions, such as asthma inhalers and insulin), companies must lower their prices to stay in business. Companies will sometimes use more expensive raw materials in the manufacturing process of generics, resulting in higher costs. However, using those same materials in the production of a brand name drug will sometimes yield a better price. The risk of using cheaper materials is that a generic drug’s performance can be compromised, which in turn could lead to adverse reactions or complications.
What About On-Patent Drugs?
On-patent drugs are those that are protected by a government patent, which gives the manufacturer a certain period of time during which they are allowed to produce and sell the drug at a certain price. The government grants these exclusive rights to create a drug to fight a certain disease or condition. However, once the patent expires or is otherwise no longer valid, the price of that drug will rise, often significantly. This trend was most notably seen with the introduction of the generic version of exemestane in 2016. Before it was approved by the FDA, the list price for a bottle was over $300. Now that it is a generic drug, the price is closer to $100.
It’s also important to note here that although the price of a drug may be reduced after it’s patented, this does not necessarily mean that the drug will be cheaper for the consumer. As we’ve discussed before on this blog, the pharmaceutical industry heavily promotes its drugs, using tactics ranging from discounts for government programs to expensive branded merchandise, all of which has the goal of enticing as many people as possible into buying their drugs. So although on-patent drugs are often a bargain for pharmaceutical companies, it’s important to keep in mind that getting a good deal does not mean that the consumer is in fact getting a good deal.
What About The Future Of Drug Prices?
As we’ve discussed previously on this blog, knowing when and how much to expect on the pharmacy counter can be difficult. That’s why it’s important to have a general understanding of what’s going on with the price of drugs. Below we’re going to walk you through some useful information about average wholesale prices of popular prescription drugs, including Viagra (sildenafil). We’ll begin by defining some key terms and presenting a high-level overview of what’s going on with drug prices. Then we’ll get into the weeds and provide more details on Viagra. At the end of this article, you’ll have all the information you need to know about average wholesale prices of Viagra and other drugs.