The Free Market Strikes Again!

I spend less than $1,000 a year for supplies, so giving them out gratis is no sacrifice. Two or three times a year, I place an order at a pharmaceutical web site. It’s easy, but sometimes I get a jolt.  

I hand out doxycycline, an old antibiotic and the recommended treatment for the most common pneumonia and the most common sexually transmitted disease. In 2012 I paid $50 for a bottle of five hundred. That’s twenty-five treatments which works out to $2.00 for each. When I ran low in 2014 I decided to reorder. Checking the web revealed that five hundred seemed to cost $1,655. That couldn’t be right, so I looked around, but it wasn’t a typo. So I ordered azithromycin, effective and about $4.00 per treatment.

This happens regularly. Remember penicillin? You may think it’s obsolete, but it remains a superb antibiotic and the best treatment for common infections from strep throat to syphilis. Twenty years ago it was as cheap as aspirin. I could buy a thousand for $30. Now the price is $130 and rising.

Here’s what happens. As a drug gets older and older, it gets cheaper and cheaper. But doctors like newer drugs. Everyone (you included) believes they are immune to advertising, but you’re not, and doctors are no different.

It’s a good rule that any drug in an ad is wildly expensive and not superior. Look at the ad: if it doesn’t say the drug is the best, it isn’t. A few years ago Avelox or Levoquin would cure your pneumonia as well as doxycycline at forty times the cost. Doxycycline at $1655 a bottle still costs less but not by as much.

As doctors incline toward a new drug, they prescribe the older one less. Pharmacies buy less. Pharmaceutical companies stop making it. Eventually the remaining companies notice the absence of competition, and the free market works its magic.   

Free Enterprise in Action

Visiting Disneyland, a couple’s two year-old twins fell ill. The parents consulted the concierge, and a doctor who wasn’t me duly arrived.

A week later, the family traveled to Hollywood to spend a few days before flying home. That’s where I came on the scene.

The children had recovered, and I wrote my clearance-to-travel. From the parents’ description, they had suffered viral upper respiratory infections with cough, congestion, and general miseries. The hotel doctor had diagnosed: “otitis, tonsillitis, bronchitis, and mild pneumonia.” He had given injections, handed over medication, and written prescriptions for antibiotics, cough medicine, and eardrops.

The parents showed me his invoices. The fee for one child totaled $495, for the other $390. The prescriptions and injections came to over $100, so they paid about a thousand dollars for a single visit.

Nothing I do in a hotel room costs much, so I quote a flat fee and never charge extra for anything. That doctor billed $30 for an injection; those I carry for common problems (vomiting, pain, allergy) cost less than a dollar a dose. A syringe costs a dime. He handed over small packets of pills, charging $20 apiece. I carry similar packets containing from three to eight pills. Each pill costs between a nickel and a quarter. A bottle of cough medicine costs $1.50. A week’s supply of antibiotics is usually less than $5.00. I pay about $3.00 for a bottle of antibiotic eye drops. Perhaps my most expensive drug is antibiotic ear drops at $8.00. Doctors may charge $30 for a urinalysis, but the dipsticks they dunk in your urine come in bottles of 100 at $40.00. That’s 40 cents a dipstick.

Medicine is a noble profession, but while I’m in favor of doctors earning a large income, it’s beneath their dignity to pay obsessive attention to it. This might not be a majority opinion. Doctors regularly claim that they are businessmen operating in a free market. As such, it’s reasonable to charge for every service. Sensible patients understand, they insist.