The Cost of Doing Business


Carl: You won’t believe this Lee: I just read an article on the gigantic markups on drugs. for example:

“Celebrex:100 mg

Consumer price (100 tablets): $130.27

Cost of general active ingredients: $0.60

Percent markup: 21,712%”

Lee:  The article was deliberately misleading Carl; When you and I were young men, the cost of materials was high and labor was cheap. Remember when we were working our way through college  for a buck an hour? Today that has changed.

The cost of doing business has almost nothing to do with the cost of raw materials. For every penny spent for ingredients there may be several dollars spent on factories, laboratories, labor, advertising, warehousing, sales commissions,and on and on. It is actually possible that an item sold at a 20% loss had a materials cost that had been marked up 20,000%




Note: Carl was reading a propaganda piece written by someone at COSTCO. The article began with Snopes says “this is true”. The facts reported out of context were true but meant nothing. The only important information was that which had NOT been reported.


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