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How Much Does the Average Prescription Drug Cost

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Retail Prescription Drug costs: 1995 and 2007

Drug Type 1995 2007
All prescriptions $30.01 $69.91
Brand drugs $40.22 $119.51
Generic drugs $14.84 $34.34

The average prescription drug cost is $69.91. Of that amount, the manufacturer receives $54.30, the wholesaler receives $2.44 and the retailer receives $13.17.

Ever wonder why over the last decade or so Wall Street gave a higher P/E ratio to Walgreens than most retailers received? If you guessed that it was because they were receiving, on average, 19% of the cost of prescription drugs, you get a gold star. Its also why Walmart selling generics for $4 killed Walgreens’ stock price.

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    4 Comments

    1. Brian Karpuk
      Brian Karpuk on June 12, 2009 at 6:55 pm

      U.S. pharmaceutical makers
      spent $65.2 billion on R&D in 2008, nearly double the tally in 2002.

      Novartis earned $9 billion in operating income on sales of $41.5 billion.

      With patents on many older blockbusters starting to expire, the industry is poised to lose an estimated $140 billion in sales to generic competition over the next five years.

    2. Mike Beacom
      Mike Beacom on June 14, 2009 at 5:44 am

      Maybe I’ll have to rethink my Merck buy I was I planning next week. Hmmmmm.

    3. Keith
      Keith on August 8, 2009 at 2:35 am

      Hi,

      Just wondering what the source was for this data. US Census???

      Thanks