Does importing pharmaceuticals make sense?

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Pharmacy costs are out of control and employers, employees and benefit advisers are demanding creative solutions. One of the recent strategies available to manage pharmacy costs is the importation of drugs from non-U.S. sources. The retail cost of drugs sold outside the United States is often a fraction — sometimes a small fraction — of its domestic cost. Pharma is willing to create these pricing differences because the market is not efficient: the Food and Drug Administration heavily regulates importation and re-importation of drugs requiring prescriptions and Drug Enforcement Administration enforcement is strict, including large civil and criminal penalties.

The U.S. government is concerned about ensuring a drug’s safety and there are numerous risks that are difficult to control including verifying the use of identical chemical formulation and the actual manufacturing process. Federal law prohibits drugs from entering the U.S. unless the drug is manufactured by an FDA-approved facility. If produced outside the U.S., the foreign version of the drug must also be FDA-approved. If produced in the U.S., the drug must be re-imported by the original manufacturer. Federal laws extend to pharmacies and healthcare providers, who would face substantial civil and criminal penalties including the loss of license.

It is important to note that the patient cannot waive the applicability of any of these laws.

In a written policy statement, the U.S. does make allowance for personal prescriptions of no more than 90 days’ supply filled at foreign pharmacies. This exception, however, does not apply if a U.S. business seeks to profit from this re-importation. This area is certainly gray and legal advice should be sought, but there are some non-U.S. based services which, through a prescription from a non-U.S. physician, allow drugs to be purchased through pharmacies outside the U.S. and delivered to a domestic address. But the laws are murky and the FDA’s concern about “chain of control” are not unwarranted.

Recently, a new drug category was introduced to treat migraine headaches. For those suffering from this ailment relief may well be priceless, but at $6,900 annually it will stress budgets of families and businesses in the United States. I wonder what it will cost in Canada?

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Pharmaceuticals Pharmacy benefit management Healthcare costs Healthcare guidelines