The Current Price of Viagra is $22.12

1998 vs. Today

In 1998, when Viagra was introduced, if a pharmacy wanted to purchase Viagra, they paid $7 per 50 mg pill. In 2012 dollars, that would be $9.94 due to inflation. However, pharmacies today pay $22.12 per pill, so clearly factors other than general cost-of-living increases are at play. Based on a survey of pharmacies in and around the Chicago area, the average cost of Viagra is now just under $25 per pill .

While Viagra is still a top seller for the treatment of erectile dysfunction (ED), it is also competing against other ED drugs, particularly Cialis. So it seems astonishing that Pfizer, the maker of Viagra, is able to get away with charging 316% what it did in 1998.

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From 2006 to 2009, Pfizer reported that U.S. sales of Viagra rose from $796 to $962 million, an increase of 21%. During that same time period, the number of prescriptions written for Viagra in the U.S. dropped by 13%, from 11.2 million to 9.9 million. Pfizer’s revenues went up because they raised prices enough to more than offset the drop in Viagra consumption. The following graph shows the price trend for Viagra from March 1998 through June 2012.

Viagra prices from March 1998 through June 2012

General Drug Price Trends

The AARP Public Policy Institute studied prices on a combined set of commonly-prescribed drugs (brand name, specialty, and generic) from 2005 through 2009, and determined that prescription drug prices rose at a rate that was nearly double the overall inflation rate. This overall trend showed up in spite of significant decreases in the price of generic drugs. From 2005 through 2009, prices of the prescription drugs studied by the AARP rose by 25.6%, compared to a general inflation rate of 13.3%.

In 2009 alone, prescription drug prices for brand name and specialty drugs rose by 8.3% and 8.9%, while prices for generic drugs in 2009 decreased by 7.8%. The overall inflation rate in 2009 was -0.3%. The Pharmaceutical Research and Manufacturers of America (PhRMA) counters that in 2010, retail drug spending grew by only 1.2%, a historically low rate. The drugs studied by the AARP were those that were mostly likely to be prescribed to people with Medicare Part D coverage, so they may not reflect the overall picture of drug prices that closely. Still, however, there is little argument from anyone that prices of name brand prescription drugs in all categories have continued to increase.

Reasons Pharmaceutical Companies Raise Prices

According to a 2011 CBS MoneyWatch article, pharmaceutical companies raise prices for a variety of reasons, including:

New Monopolies for Old Generics: Companies can take old generic drugs that were “grandfathered” in when the FDA was formed and apply for FDA approval for them. If a company is the first to apply for FDA approval, they are essentially given a monopoly over the drug when approval is granted, forcing older makers out of business.

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It pays to shop around for price differences on Viagra. A couple of dollars per pill can add up.

Promotion of Off-Label Uses: While doctors frequently use drugs “off-label,” or for uses they were not designed for, pharmaceutical companies are not allowed to promote off-label use. Nonetheless, some pharma companies have been caught doing so and fined by the FDA. However, the fines are chump change compared to the profits gained from off-label use.

Drug Price Fraud: This happens when companies publish fake prices in formularies that the government uses for reimbursement. From 2009 through 2010, however, the government managed to recover $5 billion in overcharges from drug companies.

Monopolies, Plain and Simple: Until drug patents run out (which usually takes a decade), Medicare cannot negotiate prices but is bound by a formulary which may be based on incorrect published prices as noted above.

Injectable Drug Price Loopholes: Medicare is required to pay the entire price of an injectable no matter how high, while pills require a co-payment.

More Difficulty for Whistleblowers: Federal court decisions have made it harder for federal prosecutors and whistleblowers to bring cases against pharmaceutical companies that give kickbacks to doctors and pharmacies.

Heavy Lobbying in D.C.: The healthcare reform act does not allow Medicare to negotiate drug prices, and this is blamed on the influence of drug company lobbyists in Washington.

Pharmaceutical companies have a lot of political power and aren’t afraid to use it.

Deals Between Pharmaceutical Companies and Competitors: Drug companies can and do pay competitors to drop challenges to their drug patents, and the practice is legal.

Use of Fake FDA Approval Dates and Codes: When companies submit claims for reimbursement, Medicare doesn’t often check dates and code numbers, causing them to reimburse drug companies for things like vitamins and even popsicles.

The “Because We Can” Argument: Drug companies do need to have profits in order to fund drug research, but that is not the only reason they raise prices. In many cases, drug companies raise prices in an attempt to see just how much consumers will pay. Since Viagra remains a billion-dollar-per-year moneymaker for Pfizer, consumers obviously aren’t balking too much about price increases.

Competition in the ED Drug Market

Why hasn’t increased competition in the ED drug market from drugs like Cialis, Levitra, and Staxyn resulted in lower prices? Mainly because the market is big enough that the companies making the drugs can continue to raise prices, and men will continue to pay them. In other words, Pfizer and other ED drug makers have not yet found the price “ceiling” above which men simply won’t buy the product.

Makers of ED drugs have not yet reached a price ceiling above which sales drop significantly.

What About Generics?

This is big factor in the price of ED drugs. Pfizer’s original patent for Viagra was set to expire in March of 2012. However, after a courtroom battle, the patent has been extended to April 2020. In March 2010, Pfizer sued Teva Pharmaceuticals, an Israeli drug manufacturer that wanted to introduce a generic version of Viagra to the U.S. market when Pfizer’s patent expired in 2012.

Pfizer’s argument was that a second patent on Viagra, one which specifically indicated use of Viagra for treating ED, didn’t expire until 2019. This “method of treatment” patent held up in court, and Teva was sent packing. Furthermore, Pfizer was granted an additional six-month extension of patent protection for Viagra, because the company is studying the use of a drug containing Viagra’s active ingredient for treating children with a condition called pulmonary hypertension.

As for the other major drugs for ED, Cialis won’t come off-patent until at least 2017, and Levitra won’t be off-patent until at least 2018. So all those Canadian pharmacies you see online selling “generic” versions of Viagra, Cialis and Levitra are lying to you!

In the meantime, you’ll need to shop around for good prices on the name-brand, FDA-approved ED medications, and purchase them through a reliable source like online facilitator AccessRx.com. Buying generics made in other countries is illegal, and even if you’re not caught by U.S. Customs and Border Protection, your chances of ending up with a dangerous counterfeit product are too high to risk it.

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