Drug Re-importation. Julie Kohout

Transcription

1 Drug Re-importation By Julie Kohout A bus full of senior citizens makes its way to Canada. These seniors are in search of cheaper prescription medications because they can not afford the prices of their medicine in the United States. A single mother of two gets her prescription filled online because she cannot afford it at her local pharmacy since she has no insurance. Not only are these situations a daily occurrence, but seventy-three percent of Americans older than fifty years would consider buying drugs from Canada or another source if this were feasible 1. Prescription drug cost in the United States continues to increase substantially each year and accounts for a majority of total health care costs. Because of this, many individuals are forced to choose between filling their medications and feeding their families. Prescriptions may go unfilled or dosages may be reduced because of financial concerns, thus putting the patient at risk. What these people seeking cheaper medication may not know is the ethical dilemma they may face and the ethical dilemma pharmaceutical manufacturers and the government also face. By transporting prescription medications from Canada across the border to the United States, people may technically be breaking the law. Pharmaceutical manufacturers are also put in a difficult position. They need to decide if the people they are selling their medications to will handle and store them in a safe matter and not sell them illegally, thus putting their consumers in harms way. Our government also faces some ethical issues regarding drug re-importation. The practice of drug re-importation may temporarily relieve costs but at the same time the government doesn t know if they can assure the safety of the product if drug reimportation was to become legal and widespread. Current laws regarding re-importation are the Prescription Drug Marketing Act(PDMA) of 1987 and the Medicare Modernization Act (MMA) of The PDMA, also known as the drug diversion act, amended the FD&C to reduce the potential public health risks that may result from diversion of prescription drugs from legitimate commercial channels. 6 When such diversion occurs, it is easier for unsafe drugs to be being distributed to American citizens. The potential for drugs that are adulterer and mislabeled is high as is the potential for subpotent or counterfeit drugs. The PDMA requires states license wholesale distributors of prescription human drugs in conformance with federal guidelines that will provide minimum standards for prescription drug storage, handling, and record keeping. It also requires wholesale distributors who are not authorized manufacturers distributors to provide a written statement to the purchaser identifying each prior sale. 6 It also added the American goods returned 2 section 801 to the FD&C Act. This allowed only a drug s manufacturer 1

2 to reimport that prescription drug back into the United States if it was originally manufactured in the United States then sent abroad. The MMA included provisions that allowed the importation of drugs from Canada. This can only be done if the Secretary of Health and Human Services can prove to Congress that drug re-importation will pose no additional risk to the public s health and safety; and result in a significant reduction in the cost of covered products to the American consumer. 3 The law also allows the Secretary to block re-importation, which has been done many times because of the difficulty of proving the safety of the product once it has left the oversight of the FDA. Currently, legally imported drugs must involve two components. First, the manufacturing process needs to be subject to direct FDA oversight and second, the drug distribution system needs to be closed. There are two instances when this is legal: One being for drugs manufactured in foreign facilities that are FDA inspected and approved and the other being for drugs reimported by the manufacturer according to the FD&C Act. What exactly is drug re-importation and where are these drugs being imported from? Drug re-importation is when drugs made in the United States are sold and shipped to other countries then sold and shipped back to the United States. It is estimated that twelve million prescription drug products worth seven hundred million dollars entered the United States from Canada in 2003 from internet sales and travel to Canada. 2 Most people purchasing their drugs in this way don t realize the potential for harm. Americans going to Canada may not always be getting the same drugs as those being distributed to Canadian citizens. The recent influx of Americans to Canada has created a demand greater than supply. This then forces Canadian pharmacies to look overseas in order to find the quantity of medication necessary to fill American prescriptions. Storefront pharmacies are another location Americans go to in search of cheaper medication. These pharmacies work by faxing the patient s prescription to a Canadian pharmacy. The Canadian drug is then mailed directly to the patient at the cheaper Canadian price and both the storefront pharmacy and the Canadian pharmacy split the profit. Many of these pharmacies have been closed because they have been illegally selling drugs without a pharmacy license. Another source of imported drugs is internet pharmacies. There are many potential problems with this source. Drugs from these internet pharmacies don t face the same regulation protocols, if any, as those drugs sold in community pharmacies throughout the United States. There is really no way to know where the medication is coming from or if the online pharmacy is legitimate. In addition, internet sites are often not located in the area they may claim they operate from. For example, CanadaRx.net was found to operate from the Bahamas, not Canada and therefore was not regulated by the Canadian government. 2 In addition, many of these pharmacies require the patient to sign a disclaimer that waivers their right to sue and some do not even require a prescription in order to receive the medication. Sometimes, a survey is filled out to determine if the patient is a candidate for a particular drug, which is by no means safe since the patient never consults with a physician first. One way to check if the online pharmacy is legitimate is to look for notation that it is a Verified Internet Pharmacy 2

3 Practice Site (VIPPS). This means that a particular pharmacy site is appropriately licensed and has been inspected and reviewed. The Verified Internet Pharmacy Practice Site program is run by the National Association of Boards of Pharmacy. This topic of reimportation is one constantly debated and there are groups that are strictly for reimportation and those strictly against it. One important group, the American Pharmacists Association (APhA), supports this practice. The American Pharmacists Association believes that the cost savings seen with reimportation is better then that currently seen with Medicare drug discount cards. Reimportation allows for more patients to get the medicine they need and at prices they can better afford. The American Pharmacists Association also does not believe that reimportation will compromise pharmaceutical research and development, a highly debated topic. By scaling back on direct to consumer advertising, pharmaceutical companies would not lose money. The American Pharmacists Association supports state implemented reimportation programs on the grounds that they can assure the following: frequent FDA oversight, prevention of unethical supply sanctions against Canadian pharmacies by United States drug companies, and prevention of other discriminatory measures. 4 Another group of people that support drug reimportation is the majority of the public. As mentioned earlier, seventy-three percent of Americans older than fifty years would consider buying drugs from Canada or another source if this were feasible 1. Frustrated with rapidly rising drug costs, Americans also look to the government for help in reducing prescription cost, but they are not seeing anything, or enough, being done. The public wants cheaper medication and they are willing to look outside of the United States to get it. Groups with probably the highest authority are against drug reimportation. Two such groups are the Food and Drug Administration (FDA) and the pharmaceutical companies. The Food and Drug Administration is against drug reimportation for a variety of reasons, but their main reason is safety. Currently, the drug distribution process is highly controlled and operates using a closed system. Reimporting drugs will open the system and consequently the Food and Drug Administration would have a hard, if not impossible, task of assuring safety and efficacy of these reimported drugs. Federal District Court Judge Claire Eagan stated because the drugs are not subject to FDA oversight and are not continuously under the custody of a US manufacturer or authorized distributor, their quality is less predictable than drugs obtained in the United States. 5 This statement was issued after she ruled that Canadian importation was a violation of the FD&C Act since the drugs being received from Canada were not being tracked at all times by the United States government. Allowing reimportation would also drastically increase the quantity of drugs coming into the United States from other countries making inspection even harder because it would be on such a large scale. The FDA has found many imported drugs are not safe through periodic import blitz examinations. 2 During these past blitzes, the FDA inspected mail shipments of foreign drugs and found that most were not up to United States standards. They have found expired, subpotent, contaminated, and counterfeit products. Wrong or contraindicated products, incorrect doses, medication with inadequate directions for 3

4 use, improper labeling (not in English), and inappropriate packaging and storage of medicine was also found. Some drugs were found mailed in sandwich bags, tissue paper or envelopes 2. Control substances with high abuse potential were found as were drugs withdrawn from the United States for safety reasons such as Vioxx. Non United States versions of FDA approved drugs were found. These versions may not be interchangeable as they may differ in relative potency, safety, and efficacy. Animal drugs not approved for human use were also found. Clenbuterol was found. This drug is used to treat horses but is abused and used to bulk up; similar to how steroids are abused. They found potentially hazardous products such as unapproved drugs, potentially recalled drugs, drugs requiring risk management and/or restricted distribution programs (Accutane for example). 2 Individual states have also sought action looking into the safety of drugs received from Canada. Minnesota State Health Officials found many issues when they inspected the Canadian pharmacies participating in the Canadian Internet Pharmacy Association. They found technicians that were not supervised and pharmacists that were not trained. They also noted that the volume of prescriptions filled was too high for the amount of employees scheduled to handle. They saw as many as one hundred new prescriptions and three hundred refill prescriptions being filled in one hour. 2 In addition, labels were unattached for medications in the same shipping container and drugs needing refrigeration were not refrigerated and there for no notation that these drugs needed to be refrigerated in order to preserve their stability. It was also noted that not all drugs dispensed were of Canadian origin. Action was also sought by governor representatives in New Hampshire when looking into the safety of drugs received from Canada. They found that CanadaDrugs.com, allowed patients to fax prescriptions, which is against the law in the state of New Hampshire. This website was also accredited by the Internet and Mail Order Pharmacy Accreditation Commission. This is merely a volunteer group that has no legal, state, or federal authority or enforcement capabilities. The other big group that opposes drug reimportation is the pharmaceutical companies. These companies have perhaps the most to lose profit wise if drug reimportation was to become legal. They have already seen that the Canadian groups they sell their drugs to are in turn selling those drugs to Americans. They are doing this at prices cheaper than Americans would have to pay if they purchased the same drugs in the United States. In response to this, many major pharmaceutical companies have restricted the quantity of drugs supplied to Canadian pharmacies that sell to Americans. This then causes a shortage of medication for Canada. It also discourages Canadian pharmacies from selling drugs to Americans at Canadian prices. Besides a loss in profits, the pharmaceutical companies maintain that drug reimportation would greatly reduce, if not eliminate, incentives for research and development. They believe that any sort of price control will decrease innovation for new drug development since the lost profit would reduce the money spent on the extremely expensive and time consuming research and development process. 4

5 For example, In 2003, Pharmaceutical Research and Manufacturers of America (PhRMA) member companies invested approximately $33.2 billion in research and development. This translates to almost eighteen percent of domestic sales on the research and development process. This is a higher research and development to sales ratio than any other U.S. industry. 7 Moreover, the development component (costly large-scale, multistep clinical trials) of the R&D process consumes more than 70 percent of the R&D budget (IFPMA 2004). 7 Global pharmaceutical research and development spending is around ten percent or less in other countries, while it is sixtyone percent in the United States 7, showing that the United States does spend a large portion on research and development. After researching both sides, drug reimportation seems to simply be a quick and short term fix. Importing drugs from Canada will save some Americans money in the short term, but if some sort of reimportation program was to be set up, this savings would not last. Canadian internet pharmacy operators have already stated that they cannot adequately provide safe drugs for Americans on a large scale 5. There is already a problem in Canada with the demand being greater than the available supply. Reimportation and the influx of Americans searching for cheaper medication have created Canadian drug shortages. The supply is limited and this threatens American access to the Canadian supply and increases in cost. The fact that many of the major pharmaceutical companies are limiting quantities of drugs sold to Canadian pharmacies that sell to Americans also further limits supply. Canadians are going to respond by looking elsewhere, overseas most likely, to fill these American prescriptions. By receiving drugs overseas, this adds a higher likelihood that the medication may be dangerous because it is largely, if not entirely, out of the oversight of the United States government. The other option Canadian pharmacies have is to raise the prices of the drugs that they sell to Americans. Another reason why drug reimportation will probably never reach approval by the government is that it is simply too hard, if not impossible, to regulate drugs that aren t distributed through the current closed system. By opening the system, this allows for easier access to tampering with prescription medications. Also, a wide scale approval of reimportation would increase the counterfeit market and again danger the safety of the medication supply. Counterfeit medications are a problem even with the system being closed and highly regulated. Imagine the repercussions of opening the drug distribution system. The FDA isn t willing to risk the safety of the American people knowing that when in reality, drug reimportation is only a short term fix. Instead of looking to reimportation as a quick fix, the government needs to focus on the underlying problem. Medication prices are high, have been increasingly significantly each year, and many people cannot afford them. Others have to make the decision of whether to feed their families or treat a condition that if not treated, could take away years from their life. The long term solution is to make medication more affordable for all Americans. 5

6 Current medicine practice focuses on prevention of disease. This strategy is one that will save money in the long term because it will reduce treatment, hospital, and nursing home cost. Prevention will also help preserve a patient s quality of life. Although, if people cannot afford their medication, then practice will shift from this prevention approach to simply treating the condition after it has already caused damage. The government needs to consider the fact that the current preventative practice is what will save health care dollars in the long term by saving money on future hospitalization and long term care. By making prescription medications more affordable, this will then in turn support preventative practice and save money in the long term. Generic drug development should also be promoted. It was found that generic medications are actually cheaper for the most part in the United States. The prices foreigners pay for generic drugs are on average 50 percent greater than the prices Americans pay for generic drugs. Furthermore, there is evidence that greater use of United States approved generic drugs by Americans could reduce spending by billions of dollars annually. 2 By taking advantage of generic medication whenever possible, Americans can save money. Another area of improvement is providing insurance or opportunities for discounted medication to everyone. While Medicare Part D was a nice thought, it was poorly planned. Many seniors are confused as to how this plan works and are therefore becoming discouraged. Some seniors may end up paying more for their prescriptions under this new plan. Others will not be happy when they get to the so called donut hole portion where they are expected to pay one hundred percent of the drug cost out of pocket. While Medicare Part D will help those seniors who pay more than $3500 or so a year for prescriptions, it will not help everyone. There is a need in this country to develop some sort of prescription plan that will benefit all people, not just senior citizens. This may involve the government stepping in and forcing some kind of change with the pharmaceutical companies to negotiate cheaper prices. The government needs to realize that drug reimportation will not solve any problems in the long run. The whole system needs to change in order for benefit to be seen. The public also needs to be informed of the risks of purchasing medication from other countries and online. Many people may assume that the medication they receive from Canada is safe. They probably are not aware that their medication may not even be from Canada and the handling and storage of that medication may have been substandard. These are all things that could lead to potentially dangerous outcomes for the patient. Is this reimportation of prescription medication legal? The Food and Drug Administration does have an exemption policy for personal use as the FDA generally allows Americans to bring back small quantities of medicine from outside the country for personal use. The policy states that FDA personnel can use their discretion to detain a product at the border or to refuse to allow its entry. There are several scenarios through which a product may be personally imported. In one scenario, its intended use must be 6

7 appropriately identified, it may not be indicated for a serious condition, and it may not be known to represent a significant health risk. In a second scenario, the product s intended use is unapproved in the United States, is for a serious condition for which effective treatment may not be available domestically, and is not commercialized or promoted to persons in the United States by those involved in the product s distribution. In addition to these potential scenarios, the product may not be considered to represent an unreasonable risk (which is difficult to certify). The individual seeking to import the drug must affirm in writing that the product is for the patient s own use and that the prescription length does not exceed three months. The patient also must provide the names and addresses of the treating U.S. physician(s) or provide evidence that the drug is for continuation of therapy that had been initiated in another country. While the policy sets out specific guidelines, it is also important to understand what the guidelines do not state. The policy does not permit one to simply go outside the United States or to use the Internet to bring drugs into the United States for chronic conditions necessitating ongoing therapy. Yet, that often has been how the policy has been interpreted. 7 So, technically, that bus full of seniors making the trip to Canada to purchase drugs is breaking the law. Many, if not all, of American citizens probably do not realize that they may be breaking the law by purchasing their medications from Canada. Others may be uncertain of the legality and therefore fail to declare the prescription medications they obtained in order to avoid any confrontation. Many Americans are probably not familiar with how drug prices are regulated in Canada and they may wrongly believe that prescriptions are completely covered by the government. This is not necessarily the case. The government of each province pays for about half, private insurance then pays about a third of the cost, and finally the patient pays for around one fifth of the prescription drug cost. Prices for patented medications only are set forth by the Patented Medicine Prices Review Board. To approve prices this board evaluates if the drug at hand is a brand new medication unlike any other or a similar product to others in that class. For the new medication that is unlike any other, the board takes the median price of seven other countries. These include the United States, United Kingdom, France, Germany, Sweden, Switzerland, and Italy 7. The median price is the highest price that manufacturers can sell the medication. For the drugs that are similar to others in the class, pricing is set to mirror these similar drugs. This is the main difference between Canada and the United States. The United States does not have these types of price controls in place. Many people see drug reimportation as free trade. It allows citizens to find the best price for their prescription medications. However, one of the fundamental tenets of free trade is that here is a level playing field and a free market upon which suppliers of goods and services are able to compete. Prescription drugs priced in Canada clearly are not based on fair market value; they do not reflect an equilibrium price between supply and demand. Therefore, the proposed policy does not create a truly competitive and level market for pharmaceuticals. 8 Canadian prices are skewed because the government is the sole buyer of prescription medications. Since the government has all the power, it can get the price it asks for when purchasing medications. This is unlike the United States, which has many small and some large groups purchasing from the 7

8 manufacturers. Some of the groups with greater numbers therefore have greater buying power and can negotiate for cheaper prices than the smaller groups. For any major change to happen, the drug companies and the government both need to change. If the drug companies didn t use such a substantial portion of their profits on direct to consumer advertising, then they could save money and offer cheaper medication. No other country besides the United States spends the large amount on advertising prescription medications. Be it commercials, pamphlets, pens, or drug representatives; the advertising of prescription medications is everywhere. The pharmaceutical companies are against reimportation because they would stand to lose a few dollars that they claim are needed for research and development when in reality the majority of their profits is used for advertising. While the drug discovery process is a long and expensive one, what good is developing more drugs if soon most people won t be able to afford them? The government needs to set up a system to control drug costs. This could be done by increasing the purchase power of consumers (e.g., through formularies and purchasing cooperative) or by imposing explicit price or profit controls. 1 This is not an easy task though. Setting affordable prices for drugs that are unique and have no substitutes or are still protected by their patent would be difficult. This could also lead to less than optimal drug usage. Physicians may be pressured into prescribing the cheaper medications because that is what the patient can afford and the patient may therefore miss out on receiving a medication that would better treat or prevent their condition. The use of formularies has already shown some success in saving money. Although, tier co-payments may also lead to suboptimal medication prescribing and use. Large buying groups have also been able to purchase medication from the manufacturers cheaper than the smaller buying groups. Large associations like Merck Medco, can purchase their medication cheaper than an independent community pharmacy because they have strength in numbers. Perhaps, chains and/or independent pharmacies could join together into a large association and fight for the discounted prices companies like Medco are currently receiving. American citizens, pharmaceutical companies, and the government aren t really concerned about the ethical issues involved in drug reimportation. The bottom line is money. If American citizens can get their prescription medication cheaper in Canada or on the internet, they will do it, even if this means breaking a law or two and compromising their own safety. The pharmaceutical companies will sell their product to other countries if the price is right, even if these companies may illegally reimport their drugs or compromise the safety of the product. The government says its concern is safety, but it s mostly liability and inability to come up with a better solution. Drug reimportation is a quick fix that ignores the underlying problem of rising prescription medication costs and lack of insurance for all Americans. Until this problem is addressed the fight over drug reimportation will press on. That bus full of senior citizens will continue to make the journey to Canada in hopes of purchasing cheaper medication that they can t afford in their own country. 8

9 References 1.) Choudhry, NK., Detsky, AS. A Perspective on US Drug Reimportation. JAMA. Jan 2005; 293 (3): ) Task Force. Executive Summary: HHS Report on Prescription Drug Importation. Dec 2004: I ) Prescription Drug Reimportation: The Law & Its Problems. Center for American Progress. Feb 2004: ) APhA. Reimportation of Prescription Drugs. Accessed Dec 1, ) Taylor, JM. Drug Reimportation: Committee on Health, Education, Labor and Pensions United States Sente. May Accessed Dec 1, ) Fink, JL., Vivian, JC., Reid, KK., Pharmacy Law Digest: 38 th Edition., St. Louis: Wolters Kluwer, ) Innovation and Drug Reimportation:Cost,Value, and Tradeoffs Economic, Legal, and Public Policy Implications. Supplement to Managed Care. April 2004; 13 (6): ) Owcharenko, N., Missing the Point of Medicare Reform: Why Drug Reimportation Is Bad Policy. Research Health Care. June Accessed Dec 1,