Should self-pay patients import medicine from other countries?

A few weeks ago I received an e-mail from a reader asking me what my thoughts are on patients who import their prescription medicines from other countries. I gave a brief reply to him, but thought it was a topic that I should probably address here in a full blog post.

It’s an important issue. As I’ve written about numerous times, prescription drugs are a major part of many medical treatments today, and they can be expensive. Prescription drug prices in foreign countries are often much less expensive than in the U.S. For example, a story by students in the Walter Cronkite School of Journalism at Arizona State University reported the following:

Americans Find Huge Savings From Pharmacies, Dentists Based in Canada and Mexico

Three years ago, Gail Lang, 70, was… diagnosed with tardive dyskinesia, a difficult-to-treat neurological disorder.

Tardive dyskinesia has no known cure, but medications can diminish its symptoms, Bob Lang said. She was prescribed Xenazine, a drug which would stop her body shaking and bring her relief.

But there was one big problem: It cost $9,000 for a 30-day supply of the drug, $112,000 a year.

While Medicare in 2010 offered coverage of most drug expenses over $4,550, Bob Lang said that when he went into Walgreens to buy his wife’s medication, he was told his plan would not cover it.

According to a National Academy of Sciences study, 13.6 percent of government prescription drug insurance plans do not cover Xenazine because it is an orphan drug, which means it is only prescribed for rare diseases. Lang said he did not know why the insurance did not cover his wife’s medicine but he checked back with another pharmacist for the price of Xenazine and got the same high price, which means it was not simply an error of the pharmacy.

Currently, only one manufacturer in the U.S. formulates Xenazine.

…following advice from his wife’s aunt, Lang went online and found Planet Drugs Direct — one of 77 online Canadian pharmacies approved by the Canadian International Pharmacy Association.  

By ordering the prescription through a Canadian pharmacy, the Langs only spend $1,776 a year for Xenazine. 

This particular story is fairly atypical in terms of the size of the savings, but it does illustrate the point fairly well. Importing prescription drugs from foreign countries can result in big savings, often 50% or more.

So, should self-pay patients consider buying drugs overseas? Although the potential savings can be considerable, my answer is no. There are two main problems that, for the most part, lead me to conclude that the potential savings just aren’t worth the other costs.

The first problem is pretty easy to explain – it’s illegal, at least in most circumstances. Here’s what the FDA has to say about personal importation of prescription drugs:

Is it legal for me to personally import drugs?

In most circumstances, it is illegal for individuals to import drugs into the United States for personal use. This is because drugs from other countries that are available for purchase by individuals often have not been approved by FDA for use and sale in the United States. For example, if a drug is approved by Health Canada (FDA’s counterpart in Canada) but has not been approved by FDA, it is an unapproved drug in the United States and, therefore, illegal to import. FDA cannot ensure the safety and effectiveness of drugs that it has not approved.

There are a handful of exceptions where the FDA will allow importation, including if “the drug is for use for a serious condition for which effective treatment is not available in the United States” and “the drug is considered not to represent an unreasonable risk.” In these cases the person bringing the drug into the country must also confirm in writing the medicine is for personal use and also demonstrate the drugs are being taken under the direction of a physician or that they are part of treatment that started in a foreign country.

I should mention up front I’m not a big fan of the FDA’s stated reason here why personal drug importation illegal. I’m of the opinion that, if Canada or the U.K. or Germany has approved a drug for people to use and a U.S. citizen and their doctor think that drug best suits the patient’s needs, then they should be able to get it.

But that’s a political and public policy issue, which I generally try to avoid getting into here. The other two main reasons generally given by supporters of the ban on drug importation have much more legitimacy in my opinion.

First, and I’ll only touch on it briefly because it’s also a political, public policy, and economic issue, is that the reason prescription drugs overseas are typically so much less expensive than in the U.S. is that other countries impose price controls on drugs.  I won’t run you through the economic case against price controls, I’ll just note that it’s widely accepted by nearly every economist that imposing price controls typically causes more harm than good. In this particular case that harm is, in my opinion, being inflicted at least in part on U.S. consumers who have to pay higher drug prices to make up for reduced revenue from foreign sales.

The second main reason for supporting the ban on importation of prescription drugs is far easier to explain: safety. Simply put, the U.S. has a pretty safe and secure prescription drug system (which is not to say perfect), and buying medicines from overseas, particularly over the internet, eliminates a lot of the protections that the FDA does provide.

Consider this story from Maine, where the state legislature in 2013 legalized prescription drug importation (don’t ask how it is a state can permit, or at least thinks it can permit, something federal law directly prohibits – that’s probably a whole day’s worth of legal reading I don’t want to inflict on my readers):

Complaint challenges legality of Canadian company’s medication sales to Mainers

The president of the Maine Pharmacy Association has filed a complaint with state regulators alleging that a Canadian company broke state law by selling him generic drugs from prescriptions that were filled in India, Turkey and Mauritius.

… Kenneth “Mac” McCall… says that Maine law requires the company, Canada Drug Center, to sell Maine consumers only drugs that are made or processed in Canada…

McCall said his curiosity was piqued when he noticed a newspaper ad for lower-priced prescription drugs in November, not long after the law took effect to allow retail pharmacies in Canada, the United Kingdom, Australia and New Zealand to sell drugs to Mainers.

The newspaper ad offered consumers less expensive, generic forms of popular prescription drugs such as Celebrex (an anti-inflammatory used to treat arthritis), Nexium (to treat heartburn) and Advair (a steroid used to treat asthma, emphysema and chronic obstructive pulmonary disorder).

“Are you still paying too much for your medications?” the ad asked. The company selling the drugs was not identified, but there was a toll-free number, which McCall called.

He was directed to a website, CanadaDrugCenter.com, where he ordered three medications: Cobix, the generic equal of Celebrex; Izra, the generic version of Nexium; and Clopivas, the generic equivalent of the popular blood thinner Plavix.

When McCall’s order arrived, the labels showed that the drugs had been manufactured not in Canada but in India, and that the prescriptions had been filled in Turkey, India and Mauritius, an island in the Indian Ocean off the coast of Madagascar.

McCall clearly has a vested interest here, but that doesn’t change the fact that people who probably thought they were buying prescription medicines from Canada (with a fairly robust drug safety system as well) instead would wind up with drugs from countries where protections for patients are somewhat less stringent.

The dangers of getting drugs from outside of the protected U.S. system are fairly significant. Here is an excerpt from a news story in the Globe and Mail just a few weeks ago:

France seizes record stash of counterfeit drugs from China

French customs said on Thursday that they had seized a stash of 10 tonnes of fake aspirin and erectile dysfunction and diarrhea drugs from China in what they billed as the European Union’s biggest-ever seizure of counterfeit medicine…

The fake aspirin and anti-diarrhea drugs contained no active ingredient other than sugar, while the fake erectile dysfunction drugs did contain an active ingredient but dosed differently than the original product, the official said.

…shipments as big as the latest case are exceptional. In 96 per cent of cases, counterfeit drugs crossed borders in modest postal packets, and the drugs seized are mainly fake drugs for erectile dysfunction, the customs official said.

“We’re talking about people who don’t dare to go to the pharmacy, who order the drugs online at attractive prices but have no idea what they’re getting,” he said.

Viagra or aspirin that contain only sugar may not be a major health risk, but it can get pretty serious with other drugs:

Stolen  Vials  of  Cancer  Drug  Reintroduced  as  Counterfeits

Vials of the cancer drug Herceptin probably stolen in Italy have been tampered with and reintroduced into the medicine supply chain, the European Medicines Agency said.

Counterfeit drugs have been identified in the U.K., Finland and Germany, Roche (ROG) Holding AG, the Swiss maker of Herceptin, said in an e-mailed statement. There have been no reports of any harm to patients from the fakes, the EMA said in a separate statement today. Roche is recalling suspect vials as a precaution, the agency said.

Herceptin, used to treat breast cancer, is among Roche’s best-selling products, with sales of 6.1 billion Swiss francs ($6.9 billion) in 2013. An analysis of one of the stolen vials showed it doesn’t contain trastuzumab, the active ingredient in Herceptin, Roche said. Other vials were shown to have been diluted.

“This is the first time a product suspected of being counterfeited has entered the official drug distribution chain in Finland,” the Finnish Medicines Agency said in a statement on its website.

None of this is to suggest that the U.S. drug market is wholly without problems either, as this report from the Partnership for Safe Medicines documents:

Black Market Cancer Drug Cases 2007 – 2013

Since 2007, 16 physicians and drug distributors have been prosecuted for the purchase or sale of non-FDA approved cancer treatments and the FDA is currently conducting more investigations. Since 2011, the FDA has notified more than 100 medical practices in 29 states that they may have purchased counterfeit cancer medications which were distributed by a fake online Canadian pharmacy. In total, the FDA has sent more than 1000 letters across all therapeutic areas to professionals who may have bought medications from known counterfeit drug sellers. The tested counterfeit cancer medication contained no active ingredients, only saline and acetone. Illegal distributors make a profit selling drugs that are illegally imported, expired, stolen, damaged by bad handling or outright counterfeits. Doctors purchasing these discounted drugs generate a profit for themselves by billing insurance, Medicare and patients at the same price they would for legitimate treatments…

The full report cites nearly 20 recent cases in which counterfeit, adulterated, or unapproved drugs were introduced into the U.S. system, many of them involving illegal importation by unscrupulous doctors, pharmacists, or medical suppliers.

I have often said that the point of saving money as a self-pay patient isn’t to save money, it’s to get the medical care you need at the best price possible. ‘Saving’ money by importing prescription drugs from other countries seems like an unacceptable risk given the dangers involved, especially when there are many other alternatives, including prescription drug discount cards, patient assistance programs, generics, and shopping around for the best price on drugs.

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9 Responses to Should self-pay patients import medicine from other countries?

  1. Jerome Bigge says:

    Other developed countries have much the same safety concerns, so a drug that is OK in another developed country would be OK here in the US. The reason the FDA opposes this is “political” and has nothing to do with safety, but operates like the rest of the US government to benefit “favored groups” at the expense of everyone else. The drug industry views the US as it’s “milk cow” where it can earn all the profit it wants. This also is why the government has made it illegal to import medical for your own use. It has nothing to do with “safety”, but a great deal to do with “profit”.

  2. Jim Johnson says:

    Jerome-
    I think the issue is a bit more nuanced than your post suggests. Pharma companies put a great deal of money and time and risk into new drugs. I heard recently the FDA review process is 14 years in some cases. They are entitled to whatever return on their investment they can get. Private companies (owned by private individuals) are not required legally or morally to give you a discount on their accomplishments. If you can’t afford what they ask, get a new insurance policy that will.
    Your approach is to build a “logical” argument or a moral argument when in fact it is simply your greed driving your point of view. You like so many seek the free lunch. Except it isn’t free. you want by implication for someone else to pay your way.

    Just because a drug exists doesn’t mean you are entitled to it. Again, get better insurance rather than trying to pick the pocket of someone else. If Uncle Sam is your insurance company, talk to your elected officials.

    Where might agree with you is to destroy the cozy relationship between the federal government and any number of large companies, industry associations etc. Pharma and GE, Boeing, Lockheed, Halliburton do come to mind. It is our government that is corrupt, not the industries themselves. The are just playing by the rules our “leaders” have created. That’s their right, just like it is yours to take a home mortgage deduction.
    Place blame first where it belongs.

    PS: I know everyone who reads this is crying big tears for Big Pharma. that’s not my point–sacredness of private property is.

    • AlBeaMaine says:

      You’re right in one respect. The government is, as usual, a major part of the problem. However, the last time I checked, Big Pharma was spending close to $10 Billion on television and magazine advertising. There should be NO reason to advertise prescription drugs.
      How about the huge number of drug company reps whose only job is to use available data to get providers to change their prescribing patterns. Or the huge fees paid to doctors to “speak” at conferences.
      I managed employee benefit programs for many years. I found that drug pricing was complex, corrupt and almost impossible to understand.
      So, please don’t tell me about the poor drug companies. Also, please explain why, if Pharma sells drugs at an enforced low price in other countries, I should be forced to pay “compensatory” prices.

      • sean@impactpolicymanagement.com says:

        I disagree regarding advertising – I used to work for a doctor who told me that once prescription drug spending was permitted (it was effectively banned on TV until the mid-nineties, I believe) patients started asking questions and telling their doctors about other conditions that they’d long assumed were just untreatable or not worth bothering the doctor with. There’s definitely a downside too (I think I’ve mentioned elsewhere that the same doctor told me about patients who weren’t going to leave their office without a prescription for whatever new wonder-drug they saw on the TV), but on balance I think drug advertising is helpful.

        I don’t think we’d disagree at all on the nature of drug pricing, and I’m not here to defend the ‘poor drug companies’ (they have PR departments for that). But (and I try to keep the economics/policy discussion to a minimum here) there are pretty good reasons why you’re paying more for a drug here in the U.S. than you might in the U.K. or Canada (or Ghana for that matter), and not all of them are about pharmaceutical company profits. I’d refer you to, among others, this report that I think reasonably presents the case against drug importation: http://www.ipi.org/docLib/PR-184-DrugReImport-3.pdf-OpenElement.pdf.

    • Daniel Hines says:

      Pharma puts a great deal of money in Marketing–more than it spends on R&D–25 percent of the cost of R&D for new drugs comes from Taxpayer money…that’s why there is a provision in the law that could allow restrictions to the public benefit of American consumers–much of the patent protection maneuvers of Pharma are nothing more than ‘design’ moves to extend patent life…Pharma uses pay to delay deter generic drugs coming to market–50 million Americans are deferring the prescribed access to prescriptions because they are unaffordable–drug costs are a major driver of our rising health care costs, and they easily outstrip inflation–virtually no prescription medicines are produced exclusively in the US–and, a drug that is unaffordable is unavailable…as Senator Bernie Sanders once said, ‘show me the dead Canadians…’ –the Maine situation is clearly a question of state rights, and the Maine Pharmacy Board, a creation of the state of Maine is subject to the laws of the citizens of Maine as represented through their elected officials (the creation, the Pharmacy Board, cannot be greater than the creator (the people of Maine).

  3. Eric Potter MD says:

    Good morning,
    This addresses a small portion of the pharmaceutical crisis in our country. Another aspect is the cost of the non-extraordinary drugs that far more patients take on a regular basis. I firmly believe in capitalism and a creator’s right to profit from their labor, but the administrative and bureaucratic costs are a significant part of the issue which needs to be addressed.

    Then there is the unnecessary prescribing of medications for many “problems” caused by poor self care. When the church begins to teach the wholistic nature of man’s health while encouraging its members to practice wholistic care of body and soul as one, then we will see less “prescription” costs and better health.

    Just my 2 Biblical cents…..

  4. Eric says:

    I’ve lived half of my adult life outside of the USA and I was perfectly happy purchasing prescription drugs while I was living there. And, I know what to look for to make sure it is made by a reputable company. and I find too many Americans feel that if it isn’t made in the USA it isn’t as good. Virtually every pharma manufacturer has authorized manufacturing plants in multiple countries. I personally have no problem buying those made outside of the USA. It is also a false belief that most drugs are cheaper overseas because of price controls. That may be true in some countries. But for many others, they are cheaper because the local market isn’t willing to pay what Americans (or, more accurately “American insurance companies”) are willing to pay. So, unless the drug companies lower their price in those countries, their products don’t sell. I will continue buying medications from overseas channels if I feel the price discrepancy is too high between overseas and local as long as the federal government continues to have their policy of not enforcing import laws for small personal-use quantities as is their current policy.

  5. Tom Stevenson says:

    As a consumer, it has long angered me that foreign countries were able to, essentially, levy a tax on American consumers by creating an artificial two tier pricing structure on pharmaceuticals that unfairly requires us to bear the responsibility of amortizing research costs.
    There is an easy way to protect Americans without stifling research, by requiring other nations to pay their fair share. Congress should merely prohibit pharmaceutical companies from pricing drugs more in the US than they do elsewhere. This is not to say the companies would, necessarily, have to lower prices. If some country were to impose a price that a drug company could not sustain in the US, the company would merely have to remove the drug from sale in that country so that they were not bound by that price here.
    Needless to say, if drugs started disappearing from shelves, you could bet that nations around the world would start paying their share.
    In some cases, no doubt, there may be costs associated with marketing a drug in the US that aren’t beared elsewhere, and the law could allow for price differences to offset those costs. But, I believe, the net benefit to our patients and to the world in general would be great.

  6. mark usher says:

    A British television production company in London is looking to hear from people in the USA who buy prescription medication online, as part of a documentary into counterfeit medication.

    In particular we are looking to hear from anyone who may have purchased medication online, which has turned out to be fake, but due to financial constraints have no other option but to keep shopping online for their prescription medication.

    Through the documentary we would like to give a voice to those who are being forced to make decisions about their health based on how much they can afford. A worrying factor for many who are in need of necessary medication.

    If you have a story to tell please do get in touch on the following email. mark.usher@walltowall.co.uk

    Many thanks

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