Why CVS Charges $133 More Than Costco for Generic Lipitor

 Pfizer Inc. Lipitor is arranged for an illustration  (Photo by Jb Reed/Bloomberg via Getty Images)
Jb Reed, Bloomberg via Getty Images
By Emily Jane Fox

CVS (CVS) charges $150 for a monthly prescription of the generic version of the cholesterol drug Lipitor. The same drug goes for $17 at Costco.

That's according to a recent Consumer Reports nationwide survey that sent secret shoppers to 200 pharmacies that carry five blockbuster drugs: Lipitor, Lexapro, Plavix, Actos and Singulair, all of which lost their patents in the last two years.

Shoppers found they could be paying as much as $749, or 447%, more for a generic prescription drug in one year at the highest-priced pharmacy, compared with the lowest.

The priciest places to pick up these prescriptions were CVS, Target (TGT) and Rite Aid (RAD). The least expensive were Costco (COST) and Sam's Club, while Walmart (WMT), and Walgreen's (WAG) fell in the middle.

So what's behind the huge discrepancy?

Lisa Gill, a Consumer Reports editor who focuses on prescription drugs, said the difference stems primarily from what sells at the stores.

"At places like CVS or Rite Aid, the pharmacy is their major source of revenue and profit," she said. "Costco and Sam's Club are using the low drug prices to pull people in stores who will spend money on other things."
Consumers are often willing to pay higher prices at a drug store because many of them are conveniently located, open 24 hours a day and have drive-through windows, according to Gill.

But for most people, it can be worth the extra hassle. This is especially true for those who take medication long-term, since they will get better deals at the warehouse clubs, or big box stores, Gill said.

Carolyn Castel, a spokeswoman for CVS, said that pricing surveys like this are too small to draw "meaningful conclusions about which pharmacies offer the best overall value." She also noted that they don't take into account the discount and third-party insurance programs that pharmacies use to lower prices.

A Target spokeswoman said it offers a number of ways for customers to save on drug prices, like rewards and discount programs.

Consumer Reports' Gill said these programs are helpful, but they're not doing enough to lower costs.

It's no secret that the cost of drugs can be prohibitive, especially at a time when incomes are stagnating. Consumer Reports found in a separate national telephone survey that Americans who regularly took prescription drugs, spent $758 out of pocket in 2012, or 12% more than the previous year.

Gill said that one way for people to save is by refilling prescriptions every 90 days instead of each month, since most pharmacies provide discounts on three-month supplies.

To get the best price, she said, people should comparison shop by calling different pharmacies to see who offers the lowest price.

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dhsabra

here's why...I am a pharmacist and have worked at all of them. has nothing to do with what the researcher said...Has to do with how these retailers bill the insurance companies..The higher priced retailers bill insurance companies full AVERAGE WHOLESALE PRICES(totally fictitious), from the ORange Book..They have to charge insurance companies same as cash paying customers by law, so they charge everyone the higher price...Costco charges according to actual drugs cost(much lower), plus a small fee....Costco would just as soon not deal with insurance and wants to sell large quantities of drugs for a fair price, and many people can get these drugs cheaper without their insurance than pay a copay for a 90 days supply..For those who have a set copay on their insurance, they will pay the same wherever they go for the brand name drugs, but sometimes can actually get generics cheaper at Costco without their copay!!!!!!!!!!!!!!it's that simple.....Has nothing to do with what sells and what doesn't!!!!!!!!!!

April 04 2013 at 9:30 PM Report abuse rate up rate down Reply
kafienkarl

Some will blame Obama for this also.

April 04 2013 at 6:49 PM Report abuse rate up rate down Reply
George

Here's another consumer rip-off by mfg. Novartis. Diovan patent expired six months ago, but is still not available in the U.S. even though it is produced and sold in all other corners of the world. In fact my wife's copay increased from $150 (90-days) to $162.50 and the total cost of the med increased accordingly. Novartis has successfully blocked the generic manufacture. (Novartis does have a 30-day discount coupon, but not useable with any kind of government insurance coverage, including medicare.)

April 04 2013 at 6:44 PM Report abuse rate up rate down Reply
Faith

I asked another place the same, it depens on your plan. This story to me seems strange!

April 04 2013 at 3:35 PM Report abuse rate up rate down Reply
Faith

Now each one is different, depending on age, what tier you are at etc. Each tier in medical terms is different.

Tier 1
You Pay
What’s Covered?
Lowest
Most generic prescription drugs
copayment
2
Medium
Preferred, brand-name
copayment
prescription drugs
3
Higher
Non-preferred, brand-name
copayment
prescription drugs
Specialty
Highest
Unique, very high-cost
Tier
copayment or
prescription drugs, I think every case is different. I have a family member on a Union plan who gets 3 months worth of pills for like 10.00 I asked my insurance about more then a month and they would not do it. DOESN'T MATTER ANYWAY PEOPLE, COME OCT. OBAMACARE GET READY. I say to you be careful what you wish for, now you will see. Sometimes you find out the old way was not as bad as you think.

April 04 2013 at 3:33 PM Report abuse rate up rate down Reply
Faith

See I don't understand this story, I have a genric Lipator, I use to have Zetia and that was so high I almost had to mortgage the house. 142.00 for a 30 day supply, unreal, so I asked to change. My ins. carrier sent me a letter of drugs to use cheaper. Now for the first one they gave it to me free and my head almost flew off! After that 15.00 so where they get 17.00 is beyond me. I go to CVS. Now from what I understand is the medical people set the fees of the drug you know like Anthem BC. or etc. So how do they come to those amounts? The store can't set the rates, it has to be done in the system by the people who run the insurance.

April 04 2013 at 3:25 PM Report abuse rate up rate down Reply
David

Baloney! i pay $6 for a month's supply of Atorvastatin at my CVS in Las Vegas.

April 04 2013 at 3:10 PM Report abuse rate up rate down Reply
1 reply to David's comment
Faith

CVS 15.00 not in Vegas

April 04 2013 at 3:25 PM Report abuse -1 rate up rate down Reply
1 reply to Faith's comment
Kenny

I pay less here in henderson

April 05 2013 at 12:51 AM Report abuse +1 rate up rate down
David

Basically CVS is the highest priced drug store in the US!

April 04 2013 at 11:52 AM Report abuse -1 rate up rate down Reply
Bill

Why the extreme price difference? Simple.....GREED

April 04 2013 at 9:38 AM Report abuse -1 rate up rate down Reply
gkwahlberg

This story is not accurate. My prescription insurance coverage is with CVS Caremark, and I order on line and it is delivered to my house by USPS. I just got my 3 month supply of 80 MG Artorvastatin (Generic Lipitor). The cost was $69.00 and my co-pay was $17.00.

April 03 2013 at 11:06 PM Report abuse +1 rate up rate down Reply
1 reply to gkwahlberg's comment
Susan

CVS retail operates differently than caremark.

April 04 2013 at 11:34 AM Report abuse rate up rate down Reply