Most Favored Customers Drug pricing is complicated and drug companies closely guard their pricing strategies. For example, drug companies require HMOs to sign confidentiality agreements before offering them pricing discounts. The federal government pays for prescription drugs through several different programs. This analysis uses the lowest price paid by the federal government as a proxy for the prices paid by drug companies most favored customers. All prices were updated in February 1999 to reflect current pricing.
Companies Typically Charge More in the United States Than In Canada .
For drugs that were not included in the GAO report, the study used the dosage, form, and package size common in the years 1994 through 1997, as indicated in the Drug Topics Red Book . In order to determine whether the differential between the most favored customer prices and retail prices for drugs commonly used by older Americans is unusually large, the study compared the prescription drug price differentials to price differentials on other consumer products. To make this comparison, a list of consumer items other than drugs available through the FSS was assembled. FSS prices were then compared with the retail prices at which the items could be bought at a large national chain.