The reason Tylenol is "the pain reliever hospitals use most," as the ads say, has little to do with quality, a consumer-advocacy magazine contends. Rather, Tylenol is, among other things, cheaper to hospitals than other brands, thanks to deep discounting by its maker, Johnson & Johnson.
In a survey of nine hospitals in different parts of the country, the editors of Consumer Reports found that eight of them stocked Tylenol; the ninth had Anacin-3.
Because hospitals use competitive bidding to purchase drugs, they usually stock only one brand of each kind. Hospitals prefer acetaminophen -- the active ingredient in Tylenol -- because it has fewer side effects than aspirin. And they prefer Tylenol, says Consumer Reports in its June issue, because of the king-size discount the company offers hospitals.
Johnson & Johnson often underbids the competition, including generic products. The eight hospitals bought Tylenol for about 0.7 cents per tablet -- usually in 5,000-tablet lots, the study showed. Other brands, such as Anacin-3, cost the hospitals from about 0.3 cents to 1 cent per tablet. For most individual customers, however, Tylenol sells for nearly a nickel a tablet at their neighborhood drugstore, making it one of the most expensive pain relievers bought at retail, according to Consumer Reports.
A spokesman for Johnson and Johnson pointed out that Tylenol is sometimes selected by hospitals even when its cost is not the lowest offered, because of the company's "ability to provide service and the availability of hospital-required packaging. Like any high-volume product, it can be sold for a lower unit price in large quantities." Actual production costs, said the spokesman, are considered proprietary information. Tylenol is manufactured by a Johnson & Johnson subsidiary, McNeil Consumer Products Co. of Fort Washington, Pa.
Even allowing for the volume discounts cited by the manufacturer, says Consumer Reports, the advantage to companies that get their products into a majority of hospitals is so substantial in terms of promotional value that it far outweighs any loss they may take in selling the product so cheaply: When physicians are told by sales representatives that a specific product is the choice of most hospitals, they are more inclined to prescribe it. When a company gets its product into a major teaching hospital, the hope is that interns and residents will become so familiar with the brand that they will continue to prescribe it when they enter private practice. When hospital patients are given certain brand, they tend to view that product as more effective and prefer it for subsequent use.
"Hospital pharmacists and doctors who evaluate the drugs dispensed by their hospitals said that one brand of acetaminophen is as good as another," reported Larry Katzenstein of Consumer Reports. "Doctors at hospitals in our survey told us Tylenol's price was so low they almost had to buy it."