The cost of health care continues to surge, even if the recent changes in real estate markets has pushed it off the front pages. I’m sure you’ve seen the stats. But have you seen anybody actually talking about the reasons? I haven’t either, at least not often.

I’m not an accountant, but I have some experience with cost accounting, both from my own businesses and a stint in the finance department at Boeing headquarters. Alas, I don’t have a couple of years to dig into the numbers and analyze the whole healthcare system, all I can do is look at some of the pieces. One factor, although I have no idea how large it is in the total picture, is the cost the gatekeepers add to medications.

For example, I’m muddling through life, but I’m coming a lot closer to making a go of things when I take 30-40mg of methylphenidate a day. Ciba patented the drug as Ritalin in 1954, so we’re not talking about anything terribly sophisticated to manufacture. There’s no way in hell that there’s a valid cost reason that I pay about 35 cents for a 10mg tablet of methylphenidate and less than two cents for a 325mg tablet of acetylsalicylic acid. That’s just the dollar cost, it doesn’t factor in the time-consuming hoops I have to go through to buy the stuff at all.

Uncle Sam is so certain that somebody will crush my tablets and snort them, which some apparently think is a good time, that they’ve classified it as a Schedule II Controlled Substance. That means that my prescription cannot be renewed, it’s a one-time deal, and my doctor can’t call it in or even fax it, he has to write a paper original which has to be hand-carried to the pharmacy. And the rules prevent the pharmacist from keeping a decent supply on hand. To get a bottle of 300 tablets (roughly a three-month supply), I first call the pharmacist the week before I run out so they can order it, then call the doctor to get the prescription issued, then I drive to Langley to pickup the prescription, then drive to Clinton to get it filled, and wait for half an hour so I don’t have to drive back the next day. So 300 tablets not only cost $105.58 in cash, it takes an hour of my time and involves driving over twenty miles, which almost doubles the total.

I also take HCTZ (hydrochlorothiazide) for hypertension, 25mg once a day. The more you buy the lower the unit cost, but the law allows pharmacists to dispense only a 90 days supply no matter what the drug is. Ninety tablets of HCTZ costs $7.69, but the prescription can be issued by phone and renewed up to three times.

After my stroke five years ago, I was told to take a “baby aspirin” every morning. Well, those things are too small and I kept dropping them on the floor, so I just take regular standard-size ASA tablets. (I honor Bayer’s trademark on Aspirin and try not to use that term for the generic product.) Both Larkin and I prefer the enteric-coated version, which prevents the drug from dissolving in the stomach, but has to add substantially to the cost of the tablets. Despite the fancy coating, a bottle of 500 Kirkland-brand enteric-coated ASA tablets is $6.49, and getting it involves adding it to the Costco list before my wife’s next trip.

So here are two tiny pills and one nice big fat one. The tiny pills are merely pressed tablets, the drug is mixed with a binder and possibly some filler and formed in a mold, then packaged. The big fat one is pressed as a tablet, coated with a material that holds up in the highely-acidic stomach and dissolves in the small intestine, then packaged. It’s pretty obvious that the big fat ones with the friendly extra coating is the expensive one.

Hah! The two tiny tablets are then sent through the prescription drug channel, where everything is controlled by professional pharmacists who can only act under orders from licensed physicians, both operating under a massive blanket of state and federal legislation. One of them is further controlled by moronic rules spawned by the complete failure known as the War on Drugs. So here’s the unit price per tablet for the methylphenidate, HCTZ, and ASA:
- $0.35193
- $0.08544
- $0.01298

Now here’s the unit price per gram:
- $35.1933
- $3.41777
- $0.03993

Is there a difference in manufacturing cost among these three compounds? Probably. But it’s clearly insignificant compared to the difference in delivery costs brought about by multiple layers of gatekeepers. Yes, there could be negative consequences of throwing the whole system wide open, but there are negative consequences to a system that drives up costs by a factor of a thousand. If I Were King, these distortions, or at least most of them, would end.