Crossing borders: importing prescription drugs, illegally or legally, into the United States isn't expected to have a significant short-term impact on health insurers, but long-term could be a different story.
* Nearly 20 million packages of prescription drugs are estimated to be shipped into the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. each year--a supply worth more than $3 billion.
* Many health plans believe drug importation has had little, if any, impact on their operations thus far.
* The federal government and many states are trying to craft solutions to the drug importation problem, and about 30 proposals recently have been introduced to Congress.
Rising prescription drug prices are driving nearly 2 million Americans to cross national and global borders to seek necessary medications. Some are physically venturing into Canada and Mexico for the pharmaceuticals, while others are turning to mail-order pharmacies or storefront brokers via the Internet. Thus far, many health plans have noticed little effect from the practice and are hopeful that passage of pending legislation to lift the ban on importing drugs into the United States also would have little impact on the industry. Many are concerned, however, about the safety of imported drugs and the effect that importation eventually will have on drug manufacturers' funding for research and development.
Today, nearly 20 million packages containing prescription drugs are estimated to be shipped into the United States each year--a supply worth more than $3 billion.
While it's illegal for anyone other than drug companies to import drugs into the United States, many Americans see it as the only way to purchase necessary pharmaceuticals at affordable prices. A growing number of Americans are already playing Russian roulette Russian roulette
suicidal gamble involving a six-shooter, loaded with one bullet. [Folklore: Payton, 590]
See : Chance with their medications. According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. a study by the Civil Society Institute, more than 20 million Americans worried about drug costs either skip medications or reduce dosages to stretch their medication.
Legislators are trying to craft a solution. Several dozen proposals concerning drug importation have recently been introduced in Congress, ranging from permitting drugs to be imported only for personal use to allowing imports for commercial purposes. Several states are also trying to pass legislation about the issue.
In addition, many Americans are in favor of change. A recent poll by the Henry J. Kaiser Henry John Kaiser (May 9, 1882—August 24, 1967) was an American industrialist who became known as the father of modern American shipbuilding. Early life
Beginning as a cashier in a dry-goods shop in Utica, New York, Kaiser moved many times as he pursued the Family Foundation and the Harvard School of Health found that nearly 80% of people receiving Medicare benefits favor allowing drug importation from Canada if it means lower costs for their drugs. In addition, several states, such as Minnesota, New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). , North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). , Rhode Island Rhode Island, island, United States
Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. and Wisconsin, have set up programs to help residents buy medicines from Canadian pharmacies.
The impact of drug importation on health plans is minimal because members are receiving cost-saving alteratives through lower-cost copays, said Dr. Ed Dr.
dram. Wong, pharmacy director for Premera Blue Cross Premera Blue Cross is a nonprofit Blue Cross Blue Shield licensed health insurance company based in Mountlake Terrace, Washington. It sells health insurance plans under the Blue Cross license in Washington state except Clark County and under both the Blue Cross and Blue Shield , which serves members in Washington and Alaska. "So, a $100 drug isn't a $100 drug but rather only $10 to $20 for members," he said. "As an insurance company, we want to provide peace of mind for members that we provide access to drugs that are safe and effective. The only people having the impetus to go to Canada are cash-paying people, primarily the elderly."
Importation has been a hot topic in the media and an alternative for the elderly and other cash-paying citizens without prescription drug coverage, said Premera's Wong. "Typically, health plans have processes to reimburse members who obtain medications out of the country while on vacation or on a work assignment. Premera's standard out-of-network pharmacy benefit applies whether members are filling prescriptions at home or around the world."
Except for a few complaints from its members, the impact of imported drugs also has been minimal for the Regence Group, said David Clark David Clark or Dave Clark can refer to different people:
A.M. Best Co. analyst Christian Miles said it's difficult at this point to measure the exact impact illegal drug importation is having on the industry because it doesn't address the root cause of the issue--that drug manufacturers obtain their highest margins and funding for research and development in the U.S. market. "Other markets, such as Canada and Europe, have price 'ceilings' and are subsidized by the U.S. market, in effect. Broader use of importation could lower U.S. margins for drug manufacturers, thus reducing their return on investment and funding for continued R&D," he said. Miles believes importation is more of a political short-term issue; the real question is how drug manufacturers will spread costs over markets with different price thresholds over the long term while generating adequate cash flow to fund research and development.
Eric Elliott, vice president, pharmacy management, for Aetna, also believes the real issue doesn't lie solely with importation. "Instead, the issue is pricing and lack of parity of pricing globally for similar medications," he said. Some of the activities on border states--such as people moving into coalitions and orchestrating trips across the border for medications--is keeping the topic in a high-profile position. "If you look at supply, Canada has about 2% of the world's drug supply and the United States consumes something north of 40% of the world's prescription reeds, so our concern is having this as the only solution to the issue, which could result in a solution that doesn't really get you the answer you need," he said.
Instead, the answer for many health plans, including Aetna, is to educate members about other lower-cost alternatives, such as the availability of generics. Aetna, for instance, is continually talking to Noun 1. talking to - a lengthy rebuke; "a good lecture was my father's idea of discipline"; "the teacher gave him a talking to"
rebuke, reprehension, reprimand, reproof, reproval - an act or expression of criticism and censure; "he had to members about these lower-cost products and has found good results in members' use thus far, said Elliott. In addition, the company recently entered into a joint venture to develop Aetna Specialty Pharmacy, which allows Aetna to directly contract for discounts with manufacturers instead of through third parties. "We can bring in specialty pharmaceuticals and ensure we are getting the best discounts and enabling products to be part of our benefit going forward," he said.
In addition, many generics can save members a significant amount because they're tried, proven and available in the U.S. market for lower prices than going through the importation process, said Clark. Regence also is educating its members about the use of generics.
As an example of the industry's efforts to provide affordable medications for Americans, Mohit M. Ghose, a spokesperson for America's Health Insurance Plans, cited the PACE prescription drug program in Pennsylvania, which he said has been held up as one of the "brightest jewels" in public policy today. The program, which is funded entirely by Pennsylvania lottery The Pennsylvania Lottery is the state lottery of the Commonwealth of Pennsylvania. It was created by the Pennsylvania Legislature on August 26, 1971 and that October, Henry Kaplan was appointed as its first Executive Director. The Lottery premiered on March 7, 1972. proceeds, offers comprehensive prescription coverage to older Pennsylvanians with no premiums or monthly fees charged to enrollees. "In a recent study, we found that if you overlaid o·ver·laid
Past tense and past participle of overlay1. managed care techniques currently in use in the private sector, such as mail order, step therapy and tiered formularies, on top of the PACE program, we could see additional savings of up to 40% for the state of Pennsylvania. Our members are working on several levels across the industry to keep drug costs down," he said.
Legislating a Solution
Drug importation is nothing new for the U.S. government. In 2000, President Clinton signed a bill into law allowing for commercial importation of drugs from Canada, provided the Secretary of Health and Human Services Noun 1. Secretary of Health and Human Services - the person who holds the secretaryship of the Department of Health and Human Services; "the first Secretary of Health and Human Services was Patricia Roberts Harris who was appointed by Carter" deemed them sale. Donna Shalala Donna Edna Shalala (surname pronounced /ʃəˈleɪlə/; born February 14, 1941) is the president of the University of Miami, a private university in Coral Gables, Florida. , the Secretary at the time, said it was impossible, however, for the department to ensure the products' safety and called importation unsafe.
Today, more than 30 Senate members have sponsored legislation that would allow prescription drugs to be imported from Canada. One such bill was introduced by Sen. Charles Grassley, R-Iowa, in April 2004 to "immediately open the door for American consumers to buy the cheaper prescription drugs, while requiring the FDA FDA
Food and Drug Administration
n.pr See Food and Drug Administration.
n.pr the abbreviation for the Food and Drug Administration. to establish a new system for drug importation."
Another bill garnering some publicity is $2427, known as "The Pharmaceutical Market Access Act," introduced by Sen. Byron L. Dorgan, D-N.D., and Sen. Olympia Snowe Olympia Jean Bouchles Snowe (born February 21, 1947) is a Republican politician and the senior United States Senator from Maine.
A moderate Republican, Snowe has become widely known for her ability to influence close votes and Senatorial filibusters, making her among the , R-Maine. The act would allow U.S. licensed pharmacists and wholesalers, as well as individuals, to import FDA-approved drugs made in FDA-inspected facilities from 25 major industrialized in·dus·tri·al·ize
v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es
1. To develop industry in (a country or society, for example).
2. countries, including Canada, the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the
European Community , Australia and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . In June, advocacy group AARP AARP, a nonprofit, nonpartisan national organization dedicated to "enriching the experience of aging"; membership is open to people age 50 or older. Founded in 1958 by Ethel Percy Andrus as American Association of Retired Persons, AARP now has over 30 million announced its support for the legislation and has since held a series of events to raise awareness on the issue. "We feel the legislation can address some of the safety issues we previously had, as well as being a system where individuals, pharmacists and wholesalers can import drugs, not just for individuals who live within a few miles of the Canadian border," said David Certner, head of federal affairs for the organization.
Sen. Tom Daschle, D-S.D., said there's a 50% chance the Senate could vote on a drug importation proposal before the end of the year. Certner is also hopeful that Congress will either take action on the issue during its current lame duck An elected official, who is to be followed by another, during the period of time between the election and the date that the successor will fill the post.
The term lame duck generally describes one who holds power when that power is certain to end in the near future. session or early next year.
Health plans continue to keep a close watch on the issue. "We are following the public debate as federal public policy on importation is not settled," said Lindsay Shearer, spokeswoman for Broomfield, Conn.-based Cigna Healthcare. "The Department of Health and Human Services Noun 1. Department of Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979
Health and Human Services, HHS hasn't authorized importation due to concerns about ensuring the safety of drugs manufactured in foreign countries, and we don't feel that it would be appropriate to standardly cover imported drugs until this question is settled," she said.
"If legislation is just about importation, then it's not a complete enough answer," said Aetna's Elliott. Some of the bills have to do with reimportation--in which U.S.-manufactured drugs are sent abroad but then are brought back into the United States--vs. importation. "Reimportation re·im·port
tr.v. re·im·port·ed, re·im·port·ing, re·im·ports
To bring back into a country (goods made from its exported raw materials).
re·im seems to be a middle ground that gets you even farther to nowhere. If you are only allowed to reimport re·im·port
tr.v. re·im·port·ed, re·im·port·ing, re·im·ports
To bring back into a country (goods made from its exported raw materials).
re·im drugs made here, then the control of what amount of product can be reimported can be controlled by what amount of that product is sent out of the United States," Elliott said.
Elliott also believes work should be done to accelerate generic introduction, to limit patent protection extensions and to focus on research and development of true product innovation inside manufacturers. In addition, he said other steps in the right direction are for some controls to be brought to direct-to-consumer advertising direct-to-consumer advertising Drug industry The use of mass media–eg, TV, magazines, newspapers, to publicly promote drugs, medical devices or other products which, by law, require a prescription, which targets consumers, with the intent of having a Pt of pharmaceuticals and work needs to done to create sharing of research and development value among countries, such as making drug pricing part of international trade talks.
One of the barriers to prior passage of drug importation legislation has been lack of support by President Bush, who continues to express concern about potential safety risks from imported pharmaceuticals. Instead, he believes the new Medicare subsidy for prescription drugs will eventually ease the financial strain of dissatisfied elderly. The President said he would support drug imports only if a system could be established to guarantee their safety.
Several states have made their own movement to legalize le·gal·ize
tr.v. le·gal·ized, le·gal·iz·ing, le·gal·iz·es
To make legal or lawful; authorize or sanction by law.
le drug importation. Attention recently focused on California in its attempt to pass such legislation. In October, however, Gov. Arnold Schwarzenegger Arnold Alois Schwarzenegger (German pronunciation (IPA): [ˈaɐ̯nɔlt ˈaloɪ̯s ˈʃvaɐ̯ʦənˌʔɛɡɐ] vetoed four bills that would have allowed state residents to purchase lower-cost medications from Canada. The governor felt the bills would have violated federal law and wouldn't have adequately ensured the safety of state residents.
Maine is another state getting in on the action. Gov. John Baldacci John Elias Baldacci (born January 30, 1955) is the current Governor of the U.S. State of Maine. A Democrat, he was born in Bangor, Maine, one of eight siblings in a family of Italian-Lebanese origin. recently sent a letter to HHS HHS Department of Health and Human Services. Secretary Tommy Thompson For other people with similar names, see .
Tommy George Thompson (born November 19, 1941), a United States politician, was the 7th U.S. Secretary of Health and Human Services and the 42nd Governor of Wisconsin. to request a waiver to allow state residents to purchase lower-cost prescription drugs from Canada through the Penobscot Indian Nation. As part of the proposal, the governor awarded the tribe $400,000 to establish and operate a prescription drug warehouse. The tribe would sell reimported drugs to Maine pharmacies, which would then sell the products to state residents at lower prices.
Playing It Safe
But while some fight to legalize imported drugs, many health plans are joining the FDA's concern about the safety and efficacy of the products because safety standards Safety standards are standards designed to ensure the safety of products, activities or processes, etc. They may be advisory or compulsory and are normally laid down by an advisory or regulatory body that may be either voluntary or statutory. of Canada and other countries aren't at the same level as those imposed by the organization.
For instance, Regence's Clark said studies show that a growing number of inappropriately labeled and packaged prescription drugs come into the United States from Mexico, resulting in costly hospitalization hospitalization /hos·pi·tal·iza·tion/ (hos?pi-t'l-i-za´shun)
1. the placing of a patient in a hospital for treatment.
2. the term of confinement in a hospital. visits and other problems for pharmaceutical users.
Legislation currently defines what the FDA has to do to ensure safety of patients in the United States, said Clark. "Whether or not the FDA will have the resources to oversee inspection of more plants and distribution channels in other nations will be both a funding and monitoring issue of the national distribution channels," he said.
In addition, Canadian standards don't take into account drugs coming in from other sources. Americans' demand for pharmaceutical sales is forcing Canadian pharmacies to seek supplies from other countries. During the first eight months of 2004, there was a 430% increase in pharmaceutical imports into Canada from China, followed by a 369% increase from South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , 160% from Turkey, 165% from Iran, 90% from Saudi Arabia Saudi Arabia (sä`dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. , 120% from the Philippines, and 1,300% from Bangladesh, according to "Drug Importation is Subject to National Symposium," an article by Steve Stanek published in Health Care News.
Clark said the way imported medications will fit into the insurance market is also of concern. Generally more than 98% of all medications in the United States are adjudicated electronically, thanks to National Drug Code standard codes that were adopted several decades ago.
The codes are 11-digit, universal individual product identifiers for human drugs and are labeled on every package. "Whether imported meds would be readily adopted in NDC NDC National Drug Code
NDC NATO Defense College
NDC National Documentation Centre (National Hellenic Research Foundation, Athens, Greece)
NDC National Dairy Council
NDC National Democratic Congress standards will need to be seen," said Clark. For example, a package labeled Lipitor from Canada may not have the same code as a package from the United States. "We'll have to have the same codes here to continue to have a high rate of electronic adjudication The legal process of resolving a dispute. The formal giving or pronouncing of a judgment or decree in a court proceeding; also the judgment or decision given. The entry of a decree by a court in respect to the parties in a case. , which is important both financially and clinically," he said. In addition, the industry has a large number of edits that address patient safety issues, such as potential overdoses and drug interactions, and they only work if medications can accurately be identified, preferably at the time the prescription is filled.
Varying international standards may also pose a challenge. The United States follows United States Pharmacopeia United States Pharmacopeia /Unit·ed States Phar·ma·co·peia/ (USP) a legally recognized compendium of standards for drugs, published by The United States Pharmacopeial Convention, Inc., and revised periodically. standards, which Clark calls one of the most stringent sets of standards in the world. USP USP - unique sales point is a nongovernmental, standards-setting organization that ensures the quality and consistency of medicines, promotes the safe and proper use of medications and verifies ingredients in dietary supplements. Most--but not all countries--follow USP standards, Clark said. "A supply of Lipitor, for example, may be labeled as 20 mg, but can't vary more than 5% to 10% from having 20 mg in every capsule. But other countries may allow other variations of up to 15% or more, in addition to possibly using different fillers that can bring on other safety concerns such as allergic reactions." Fillers found in medications contribute to more user allergic reactions than active ingredients, he added.
Some U.S. drug manufacturers are standing firm against drug importation. Mammoth pharmaceutical manufacturer Pfizer recently cut off supplies to several Canadian wholesalers. In September, GlaxoSmithKline, maker of such commonly used medications as the migraine medicine Imitrex and antidepressant antidepressant, any of a wide range of drugs used to treat psychic depression. They are given to elevate mood, counter suicidal thoughts, and increase the effectiveness of psychotherapy. Paxil, launched several newspaper advertisements that question the safety and quality of medications ordered through Canadian Web sites as part of its campaign against importation of prescription drugs.
On the Lookout 34% of Americans with health insurance who buy prescription drugs are purchasing cheaper drugs from pharmacies in Canada or other nations. 33% said they plan to purchase the cheaper medications. Source: "Americans & Health Care Reform: How Access and Affordability Are Shaping Views," a national opinion survey of 1,020 U.S. adults conducted Sept. 2-5 by Opinion Research Corp. on behalf of Results for America, a project of Civil Society Institute. Support for Prescription Drug importation Do you favor or oppose the federal government making it easier for people to buy prescription drugs from Canada? Oppose 23% Don't Know 9% Favor 68% Source: Kaiser Family Foundation/Harvard School of Public Health Medicare Prescription Drug Survey, 2003. Table made from pie chart.
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Cigna HealthCare A.M. Best Company # 68124 Distribution: Agents and brokers
Premera Blue Cross A.M. Best Company # 60076, 64764 Distribution: Agents and brokers
Regence Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. Cos.
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RELATED ARTICLE: Drug importation cost savings: fact or fiction?
With Americans spending just under $1 out of every 10 health-care dollars on pharmaceuticals, many are turning to Canadian and other national pharmacies to receive lower-cost drugs.
Prescription drug spending continues to rise exponentially, with spending projected to increase by an average of 12.6% annually until 2010. In addition, Americans pay the highest prices in the world for prescription drugs. A prescription drug that costs $1 in the United States costs only 62 cents in Canada, 65 cents in Germany, 69 cents in Great Britain Great Britain, officially United Kingdom of Great Britain and Northern Ireland, constitutional monarchy (2005 est. pop. 60,441,000), 94,226 sq mi (244,044 sq km), on the British Isles, off W Europe. The country is often referred to simply as Britain. , 55 cents in France and 52 cents in Italy, according to information posted on U.S. Senator Byron L. Dorgan's Web site. Sen. Dorgan, D-N.D., cosponsored a bill now before Congress to create a competitive marketplace so Americans can purchase U.S. Food and Drug Administration-approved drugs at the much lower prices available in other countries.
When purchasing drugs from outside the United States, many Americans are turning to Canada because its pharmaceutical prices are touted to be 40% to 60% lower than those in the United States. The lower costs are due in part to controls enforced by Canada's Patented Medicine Prices Review Board. According to the board, prices for existing patented medications can't rise by more than the consumer price index, and prices for newly patented drugs must be set so that the cost of therapy falls within the same range as using existing drugs targeting the same disease. And "breakthrough" drugs, such as asthma medication Singulair, can't exceed the median prices in the United States, United Kingdom, France, Germany, Italy, Sweden and Switzerland. Canada doesn't regulate prices for nonpatented or generic drugs.
But some experts argue whether Canadian pharmacies really are passing on added savings to customers. The Health and Human Services Noun 1. Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979
Department of Health and Human Services, HHS Task Force on Drug Importation recently found that if patients shop around they often can find lower costs than Canadian prices. The FDA recently began a cost comparison analysis of prescription drug prices in the United States Prescription drug prices for single-source brand name drugs in the United States are significantly higher than in Canada and other countries, many of which have price controls. Prices for generically available drugs tend to be higher in Canada. and Canada based on a CanadaRX shipment intercepted earlier this year by U.S. Customs and Border Protection U.S. Customs and Border Protection (CBP), a bureau of the United States Department of Homeland Security, is charged with regulating and facilitating international trade, collecting import duties, and enforcing U.S. trade laws. officials in Miami. The 439 packages in the shipment contained 881 prescription drugs with invoices.
Preliminary results of the task force's analysis indicate that one-half of the medications had less-expensive, FDA-approved generic versions available in the United States. For instance, a 100-dose supply of the 200-milligram version of the antiarrhythmic antiarrhythmic /an·ti·ar·rhyth·mic/ (-ah-rith´mik)
1. preventing or alleviating cardiac arrhythmias.
2. an agent that so acts.
adj. medication Amiodarone--one of 10 of the most common drugs in the intercepted shipment--cost $116.97 from CanadaRx, while the same prescription can be purchased from some American pharmacy chains for as little as $41.
In addition, the Congressional Budget Office The Congressional Budget Office (CBO) is responsible for economic forecasting and fiscal policy analysis, scorekeeeping, cost projections, and an Annual Report on the Federal Budget. The office also underdakes special budget-related studies at the request of Congress. said that if the importation ban is someday lifted, limited to only certain countries such as Canada, the effect of lower prescription drug costs for American consumers would be small, according to an article on "Health Care and the 2004 Elections" by the Kaiser Family Foundation The Henry J. Kaiser Family Foundation (KFF), or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. . The Congressional Budget Office acknowledges that prices for drugs still under patent protections (as opposed to generic products) are 35% to 55% lower in other countries than in the United States. It cautions, however, that responses by foreign governments and by the pharmaceutical industry to such a change in policy could erode most savings, according to the article. For instance, foreign governments could restrict the supply of drugs leaving their borders, or pharmaceutical manufacturers could limit the supply of drugs sold to foreign nations that facilitate sales to U.S. purchasers.
"It's unfortunate, but a lot of seniors are getting brand-name drugs and going to Canada to get them when there are generic alternatives available at less cost in the United States," said Dr. Ed Wong, pharmacy director for Premera Blue Cross, which serves members in Washington and Alaska. Several years ago the company created its Generics--Yes! program--a comprehensive educational campaign to educate members, consumers, providers, payors and others about available generics and the cost savings they offer. In addition, Premera is motivating members to try generics by waiving two to three copays. Premera's generic usage was 51.3% in August, compared to Merck-Medco's national percentage rate of 47.7%.