Exploring the Boundaries of Drug Importation

Importing pharmaceuticals from other countries to access lower-cost medicines is still a relatively murky issue.

Hematologist Kenneth R. Adler, MD, of Summit Medical Group MD Anderson Cancer Center in New Jersey, has a patient who has been taking the branded version of lenalidomide to treat her myelodysplastic syndromes for nearly a decade. The drug has been a “magic bullet” for the patient, who, through her husband’s employer-provided private insurance, only pays a $20 copay for each 28-day supply – which would cost about $20,000 per month without insurance.

“The patient started crying because her husband wants to stop working and retire but can’t because he will lose his insurance and prescription coverage,” Dr. Adler said. “I can’t understand why these companies have to continue to raise the price of a drug that has been on the market for so long.”

Unfortunately, this patient’s situation is not unique. She is an example of the many victims of the financial toxicity associated with long-term treatment.

But, according to legislators and some clinicians, she could benefit from a change in public policy to ease the financial burden of a chronic disease: importation of cheaper drugs from foreign countries.

In recent years, several legislators have proposed changes in public policy that would permit the wholesale or individual importation of drugs to the U.S. These proposals have highlighted the reasons why U.S. drug prices dwarf those in other developed countries, and raised concern over the safety of imported pharmaceuticals.

ASH Clinical News spoke with various stakeholders to see how increased access to pharmaceuticals through importation could affect U.S. patients.

Our Neighbors to the North

The idea to import lower-priced drugs from other countries to help the U.S. better manage price hikes and supply shortages is not new, and interest in the approach was high in 2017 when Congressional lawmakers put forth two bills related to drug imports.

Sen. Bernie Sanders (I-VT) sponsored the Affordable and Safe Prescription Drug Importation Act (S.469), which would amend the Federal Food, Drug, and Cosmetic Act to permit importation of affordable and safe drugs by wholesale distributors, pharmacies, and individuals.1 This legislation was intended to help lower the “skyrocketing cost of prescription drugs by allowing Americans to import safe, low-cost medicine from Canada.”1 The non-partisan Congressional Budget Office estimated that, if passed, the bill would save $6.8 billion over 10 years.2

Another importation bill, the Safe and Affordable Drugs from Canada Act of 2017 (S.64), was sponsored by Sens. John McCain (R-AZ) and Amy Klobuchar (D-MN) and was intended to introduce “greater competition into the pharmaceutical marketplace.”3 This bill proposed legalizing “personal importation” (or bringing a product that is not for further sale or distribution into the U.S. through personal baggage or international mail) from licensed pharmacies in Canada.

Despite the appeal of this approach, both bills are stalled in legislative review.

How Did We Get Here?

Hematologists and oncologists are well-aware that many medications essential to treating serious medical conditions like cancer can be prohibitively expensive. The average price of anti-cancer drugs at launch – adjusted for inflation – has increased by approximately 10 percent per year from 1995 to 2013.4

“We have made a lot of progress in developing novel drugs in recent years,” Dr. Adler said. “The issue with novel drugs, though, is that when patients do well on them, they are often going to be on them indefinitely, with prices increasing every year.”

In a 2013 survey of patients with cancer who contacted a national copayment assistance foundation, 42 percent of participants reported “significant or catastrophic subjective financial burden” and 24 percent avoided filling prescriptions because of cost.5

Similarly, a 2015 study in The Lancet Haematology showed that financial toxicity was common in patients with multiple myeloma, with 71 percent of patients reporting at least minor financial burden, and 21 percent reporting having to borrow money to pay for medications.6 And, in a discrete-choice experiment published in Blood Advances, patients living with chronic lymphocytic leukemia said they were willing to accept drugs that are less effective if they carry lower out-of-pocket costs.7

Americans often pay two to six times what the rest of the world pays for the same brand-name prescription medications, according to a 2015 report released by insurance industry group International Federation of Health Plans.8 The report listed several examples of price differences, including the anticoagulant Xarelto® (rivaroxaban), which had an average price per 30-day supply of $292 in the U.S. and just $126 in the U.K., and the anti-cancer therapy Avastin® (bevacizumab), which had an average price of $2,289 for a 400 mg vial in the U.S. and just $470 in the U.K.

Why the Difference?

Medicare covers all newly approved anti-cancer drugs, regardless of cost or cost-effectiveness, and does not directly negotiate with drug manufacturers over prices. In fact, the 2003 Medicare Modernization Act barred the government from negotiating pricing with pharmaceutical companies. Instead, the legislation depended on large private insurers to negotiate discounted drug prices.9

“In other countries with large health-care systems, like the National Health Service (NHS) in the U.K., [officials] have consciously decided to exclude known effective anti-cancer drugs due to cost alone,” said Joseph Alvarnas, MD, director of value-based analytics at City of Hope National Medical Center in Duarte, California, and chair of the American Society of Hematology’s Committee on Practice.

The National Institute for Health and Care Excellence (NICE) in the U.K. evaluates cost-effectiveness of new drugs and restricts funding for drugs if their benefits are deemed too small, compared with the cost. The possibility of non-coverage is a bargaining tool for the British government to negotiate discounts with drug manufacturers.

A recent press release from NICE announced that NHS will now offer a drug combination of lenvatinib plus everolimus for people with advanced renal cell carcinoma. This decision came only after “a revised offer from the company” that passed NICE’s cost-effectiveness analysis.10 A similar decision was made regarding two breast cancer drugs after the companies lowered the prices.11

“Drug prices are lower in Canada because the national government, through the Patented Medicine Prices Review Board, uses reference pricing,” explained Gabriel Levitt, president of PharmacyChecker.com, and a public advocate for prescription drug affordability. “It’s surprisingly simple, and Canada’s prices on brand-name drugs are often the median of the following countries: France, Germany, Italy, Sweden, Switzerland, the U.K., and the U.S.”

Through this program, the price of patented drugs in Canada decreased in 2016 by 2.6 percent.12 However, Mr. Levitt acknowledged that generic medications in Canada are often more expensive than generics in the U.S., given the smaller market, lower competition among manufacturers, and that the U.S. government does not control generic pricing.

Open the Borders

Though it prohibited price negotiations, the Medicare Modernization Act of 2003 included a provision that allowed for the import of prescription drugs from Canada. The law tasked the U.S. Secretary of Health and Human Services (HHS) with two important responsibilities: ensuring that the drugs “pose no additional risk to the public’s health and safety” and that importation would lead to cost-savings for U.S. consumers.

Representatives from Pharmaceutical Research and Manufacturers of America (PhRMA), a trade group representing biopharmaceutical researchers and biotechnology companies, pointed out that 15 years have passed and this has yet to happen.

“No HHS Secretary has felt comfortable approving importation because [he or she] cannot guarantee safety,” said Caitlin Carroll, director of public affairs at PhRMA.

In 2017, the four most recent Food and Drug Administration (FDA) commissioners sent a letter to Congress attesting that drug importation would “harm patients and consumers and compromise the carefully constructed system that guards the safety of our nation’s medical products.”13

The U.S. drug supply is among the safest in the world according to the FDA, and federal protections create a closed drug distribution system to assure U.S. consumers of that safety. “Public health is at risk when the safety measures put in place by federal laws and regulations are undermined or absent through the importation of unapproved foreign drugs,” Lyndsay Meyer, of the FDA’s Office of Media Affairs, told ASH Clinical News.

Chain of Command

Part of the FDA’s role in overseeing the U.S. drug supply chain is regulating the importation of drugs from other countries to ensure those drugs are from legitimate sources and are manufactured, transported, and stored under appropriate conditions.

The agency claims that 40 percent of the finished pharmaceuticals sold in the U.S. are imported and that 80 percent of active pharmaceutical ingredients found in U.S. drugs are foreign-made, but according to research by PharmacyChecker.com, 70 percent of the top 40 brand-name drugs sold in the U.S. were foreign-made.14

“The FDA says buying medication online is not safe, yet we already rely to some degree on foreign regulators to protect our drug supply,” Mr. Levitt said in a press release about the research.

The FDA has regulatory authority over these foreign-made ingredients or products; without this federal oversight, it would be difficult to guarantee that drugs imported from other countries are from a legitimate, regulated supply chain in that country, Ms. Meyer said.

In addition, the FDA said that if a Canadian company is selling drugs only for export to the U.S., and not to Canadian citizens, Health Canada (the country’s health department) might not regulate the drugs or the company at all. Drugs coming to the U.S. from Canada may be coming from some other country and simply passing through Canada.

However, Mr. Levitt argued that, although this is a popular talking point for PhRMA and the FDA, it is not entirely accurate.

“If you call the pharmacy boards in Manitoba or British Columbia, they will tell you that, if a prescription is mailed from a licensed pharmacy in Canada to a patient in the U.S., it must be a Health Canada–approved drug.”

Counterfeit Goods

Mr. Levitt considers many concerns about counterfeit drugs to be exaggerated. “Personal drug importation, when done wisely, is … a lifeline of more affordable medications for Americans who need them,” he said.

Dr. Adler recently discussed drug importation with a patient with chronic myeloid leukemia who has been on Gleevec® (imatinib) for 10 years. About four to five years ago, the price of Gleevec was $11,000 for a 90-day supply. The patient, who was also a physician, decided to research drug importation online. He purchased Gleevec through the online pharmacy CanadaDrugs.com for $1,600 for a 90-day supply. The patient’s wife, a breast cancer survivor, receives her hormone therapy medications through the same website.

However, Dr. Alvarnas has personally witnessed the dangers of obtaining drugs from outside the FDA’s safety chain. When he practiced in Arizona, one of Dr. Alvarnas’ patients crossed the border into Mexico to purchase lower-cost pharmaceuticals. She wanted access to medicine she couldn’t afford, but the medication she bought turned out to be counterfeit and caused her death.

The U.S. has pursued litigation against potential bad actors. In 2015, the U.S. Department of Justice announced indictments against Canada Drugs and its affiliates, charging the company with smuggling, money laundering, and conspiracy.15 The company’s website says it offers low-priced medicines from Canada, the U.K., Australia, and New Zealand; the company was accused of falsifying customs declarations on the value of drugs, improper storage of the drugs, and sales of counterfeit medicine. In all, the company and its affiliates were charged with crimes related to the sale of $78 million in mislabeled or counterfeit prescription drugs.

The company again was fined for illegal importation in April 2018 for importing counterfeit cancer drugs and other unapproved pharmaceuticals into the U.S.16 A federal judge in Montana approved federal prosecutors’ recommended sentences, totaling $34 million in fines and five years’ probation for Canada Drugs. The online pharmacy also will permanently cease the sale of all unapproved, misbranded, and counterfeit drugs and will surrender all the domain names for the websites through which it sells drugs.

“There is concern that there have been fake cancer medications distributed, not only to pharmacies but to doctors’ offices and hospitals throughout the U.S.,” said Kenneth L. McCall, PharmD, associate professor in the College of Pharmacy at University of New England in Portland, Maine. “People are worried that these medications do not contain ingredients that they are labeled to contain and may contain contaminants.”

State Solutions

To try to circumvent what they perceive as inaction at the federal level, several states have recently put forth legislation that would allow for the importation of prescription drugs from Canada.

In 2013, Maine passed a law legalizing the purchase of prescription medication by mail from other countries, but a federal judge struck this down in 2015.17

“The federal court ruled that the law passed in Maine violated federal law in a space where federal law is preemptive over state law,” Dr. McCall explained. “The concern was that if states are allowed to preempt federal law and individually have standards for prescription drugs, we would end up with 50 different standards, a deregulated drug supply chain, and compromised patient safety.”

According to Dr. McCall, individuals in Maine could buy prescriptions drugs via mail from Canada, the U.K., Australia, and New Zealand. To gain firsthand experience with these by-mail pharmacies, Dr. McCall (who was serving as president of the Maine Pharmacy Association at the time) ordered some of the branded prescription products advertised in local papers, including Viagra®, Plavix®, Prilosec®, and Celebrex®.

“All four of the products sent were not FDA-approved and not Canada Health–approved,” Dr. McCall said. For example, the Viagra product was called Fildena, which is not available in the U.S. or Canada.

“Legislators were trying to do what they thought was right by putting in place some safety parameters,” he said. “The problem is that there were no regulations in place to ensure that the products being sold weren’t [imported to Canadian pharmacies] from Turkey or India.”

In January, Vermont was considering legislation to legalize the importation of drugs from Canada, and a Utah bill called on the state’s Department of Health to study and report on prescription drug importation to determine if the state could become certified to operate a prescription drug importation program.18,19 The Vermont bill is still under consideration, but the Utah bill failed to pass.

Even if these measures passed, Dr. Alvarnas said it is difficult to know if state action alone could lead to any kind of a wholesale change in U.S. drug pricing.

“If a state like California, which has 40 million people – more than Canada – could unify all the elements of the state health-care system and place it under one purchasing authority, then that would be a lot of buying power,” Dr. Alvarnas said.

“[The Centers for Medicare & Medicaid Services (CMS)] is the big dog in the room. If CMS had the authority to negotiate drug pricing with pharmaceutical companies, that would probably have an extraordinary impact,” he said. “In general, when it comes to health care, where CMS goes, everybody else eventually follows.” —By Leah Lawrence


References

  1. Bernie Sanders. “Affordable and Safe Prescription Drug Importation Act Introduced to Help Lower Skyrocketing Cost of Medicine.” Accessed April 4, 2018, from https://www.sanders.senate.gov/newsroom/press-releases/affordable-and-safe-prescription-drug-importation-act-introduced-to-help-lower-skyrocketing-cost-of-medicine.
  2. Congressional Budget Office. “Preliminary Estimate – S.469, the Affordable and Safe Prescription Drug Importation Act (as introduced).” Accessed April 4, 2018, from https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/s469preliminary.pdf.
  3. John McCain. “Senators McCain & Klobuchar Reintroduce the Safe & Affordable Drugs from Canada Act.” Accessed April 4, 2018, from https://www.mccain.senate.gov/public/index.cfm/2017/1/senators-mccain-klobuchar-reintroduce-the-safe-affordable-drugs-from-canada-act.
  4. Howard DH, Bach PB, Berndt ER, et al. Pricing in the market for anticancer drugs. J Econ Perspect. 2015;29:139-62.
  5. Zafar SY, Peppercorn JM, Schrag D, et al. The financial toxicity of cancer treatment: a pilot study assessing out-of-pocket expenses and the insured cancer patient’s experience. Oncologist. 2013;18:381-90.
  6. Huntington SF, Weiss BM, Vogl DT, et al. Financial toxicity in insured patients with multiple myeloma: a cross-sectional pilot study. Lancet Haematol. 2015;2:e408-16.
  7. Mansfield C, Masaquel A, Sutphin J, et al. Patients’ priorities in selecting chronic lymphocytic leukemia treatments. Blood Advances. 2017;1:2176-85.
  8. International Federation of Health Plans. “2015 Comparative Price Report. Variation in Medical and Hospital Prices by Country.” Accessed April 6, 2018, from https://static1.squarespace.com/static/518a3cfee4b0a77d03a62c98/t/578d34649de4bb15e7a9f2e2/1468871781348/2015+Comparative+Price+Report_Final+071516.pdf.
  9. gov. “H.R.1 – Medicare Prescription Drug, Improvement, and Modernization Act of 2003. 108th Congress (2003-2004).” Accessed April 9, 2018, from https://www.congress.gov/bill/108th-congress/house-bill/1.
  10. National Institute for Health and Care Excellence. “New deal will give people with kidney cancer another treatment option.” Accessed April 8, 2018, from https://www.nice.org.uk/news/article/new-deal-means-another-treatment-option-for-people-with-kidney-cancer.
  11. National Institute for Health and Care Excellence. “Breast cancer patients to have routine access to two life extending drugs after new deal, say NICE in draft guidance.” Accessed April 6, 2018, from https://www.nice.org.uk/news/article/breast-cancer-patients-to-have-routine-access-to-two-life-extending-drugs-after-new-deal-say-nice-in-draft-guidance.
  12. Patented Medicine Prices Review Board. “Patented Medicine Prices Review Board explores possible changes to how it conducts business.” Accessed April 9, 2018, from https://www.newswire.ca/news-releases/patented-medicine-prices-review-board-explores-possible-changes-to-how-it-conducts-business-663445143.html.
  13. The Washington Post. “Four former FDA commissioners denounce drug importation, citing dangers to consumers.” Accessed April 7, 2018, from https://www.washingtonpost.com/news/to-your-health/wp/2017/03/17/four-former-fda-commissioners-denounce-drug-importation-citing-dangers-to-consumers/?utm_term=.b5e12e4bb493.
  14. com. “FDA understates percentage of foreign-made medication sold in U.S.” Accessed April 7, 2018, from https://www.pharmacychecker.com/news/fda-understates-percentage-of-foreign-made-medication-sold-in-us.asp.
  15. S. District Court for the District of Montana Butte Division. “USA v. CanadaDrugs.com Ltd. Partnership.” Accessed April 7, 2018, from http://www.safemedicines.org/wp-content/uploads/2015/08/CanadaDrugs-Indictment1.pdf.
  16. Associated Press News. “Canadian pharmacy fined $34 million for illegal imports.” Accessed April 17, 2018, from https://apnews.com/7fd1b44d95bc4e4187512b3323c00495/Canadian-pharmacy-to-be-fined-millions-for-illegal-imports.
  17. S. District Court District of Maine. “Maine Pharmacy Association v. Maine.” Accessed April 10, 2018, from http://www.fdalawblog.net/wp-content/uploads/archives/docs/Maine%202-23-15%20Decision.pdf.
  18. Associated Press. “Vermont considering drug importation as way to save money.” Accessed April 8, 2018, from https://www.usnews.com/news/best-states/vermont/articles/2018-01-18/vermont-considering-drug-importation-as-way-to-save-money.
  19. Utah State Legislature. “H.B. 420 Prescription Drug Importation Study.” Accessed April 9, 2018, from https://le.utah.gov/~2017/bills/static/HB0420.html.

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