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Amid a flurry of national proposals to bring exorbitant U.S. drug prices in line with other countries’ charges, one Utah insurer has a different option for patients:
Pay them to go to Mexico.
PEHP, which covers 160,000 public employees and family members, is offering plane tickets to San Diego, transportation to Tijuana, and a $500 cash payout to patients who need certain expensive drugs for multiple sclerosis, cancer and autoimmune disorders.
“That money is pretty small in comparison to the difference between U.S. prices and Mexico prices,” said Travis Tolley, clinical operations director for PEHP.
The insurer rolled out its “pharmacy tourism” option this fall in response to state legislation requiring state employees’ insurance plans to offer “savings rewards,” or cash incentives, to patients who choose cheaper providers.
PEHP is offering pharmacy tourism benefits for about a dozen drugs for which the price disparity between countries is vast. For example, Avonex, which treats MS, costs about $6,700 for a 28-day supply in the U.S., but about $2,200 through PEHP’s contracted clinic in Tijuana.
For three months’ supply — the maximum allowed under the program — the savings of $13,500 more than covers the $500 reward and transportation, typically less than $300 per person.
[...] Patients who participate will fly to San Diego, be driven through a priority lane at the border crossing and arrive at a clinic, which PEHP director Chet Loftis described as “top-notch,” comparable to a Mayo or Cleveland clinic in the United States.
Medical tourism is not new; PEHP itself has previously offered coverage for out-of-country medical procedures. But without the cash incentives, patients haven’t used that option, Loftis said. Now that clients are eligible for up to $3,900 a year in reward payments for trips to Tijuana for procedures and drugs, Loftis said he hopes more will participate.
Source: https://www.sltrib.com/news/2018/10/28/fight-high-drug-prices/
(Score: 3, Interesting) by Zanothis on Tuesday October 30 2018, @03:39PM (7 children)
A quick search on Avonex, listed in TFA, indicates that it is manufactured by an American pharmaceutical company. I haven't been able to find where they manufacture this particular drug, but we'll assume for the sake of argument that it's manufactured in the USA. That would mean that the medications that people are traveling to Mexico to purchase were exported from the USA to Mexico, which makes the entire situation even more ridiculous (unless, of course, the manufacturing facility is not in the USA).
Additionally, these medications ARE approved for sale in the USA, they just cost 3x as much because we have no bargaining power with which to stop outrageous drug price increases. If you recall, Australia had a similar problem with Adobe products, though at least Photoshop isn't required to treat debilitating medical conditions.
I don't know about trying to import at scale, but for an individual crossing the border with a 3-month supply of the drug, it would be difficult to strip someone of a medication that they had a prescription for. We don't do that normally, why would we start for this specific instance? How would we determine that someone was doing that, anyway?
(Score: 2) by urza9814 on Tuesday October 30 2018, @04:09PM (6 children)
I think that's software is a perfect analogy, but I also don't think it's purely a matter of bargaining power. It's more basic supply and demand getting warped by low marginal costs. Development is expensive; each individual unit is cheap.
In some countries like China, India, parts of eastern Europe, and many others you'll find very different designs for consumer electronics. You'll find tea kettles that could be sold at a dollar store here -- except for the fact that they violate a few dozen US safety regulations. But the quality that we require here would be prohibitively expensive over there, so they just get different (crappier) products. That doesn't really apply to software or drugs though. The expensive part is already paid; if you can sell it for a dollar a pill somewhere else then that's still almost a dollar of extra profit. But that only works if you can still charge a higher price somewhere else in order to make up the R&D costs.
So...do we allow importing all drugs for everyone, and potentially price out poorer countries because the drugs will have to be sold at a single price globally? Do we crack down on all imports, even personal supplies? Or do we decouple research from production so that sale price only reflects production price and it can be sold the same as any other goods? Personally, I'm a fan of that last option...but it seems so far we've been going with the middle one, in which case the situation in TFA should definitely not be legal....
You can find websites that will have a doctor in India or Mexico or wherever give you an online consultation via some web chat, write a prescription, and mail you the drugs through standard international post. If customs finds that package, they're gonna seize it, even though you've got a "valid prescription". Why should it be any different if you carry them across the border in person?
Generally, customs *will* allow you to cross the border with a personal supply of medication; however according to the FDA website it is illegal to import any drugs into the US, even for personal use. So technically you aren't allowed to bring them at all, but they realize that this is a bit unreasonable and they give some flexibility. The insurance company in TFA is exploiting that in order to bypass regulations about importing foreign medication. They're using customers as drug mules; they're encouraging and sponsoring people to violate federal law en masse; and they ought to be prosecuted for that.
(Score: 2, Insightful) by Anonymous Coward on Tuesday October 30 2018, @05:10PM (1 child)
> But that only works if you can still charge a higher price somewhere else in order to make up the R&D costs.
This has been the party line from Big Pharma for quite some time. I'm not sure I believe it anymore, at least not without questioning a few other things like excessive executive pay/perks/bonuses.
(Score: 2) by Mykl on Tuesday October 30 2018, @09:54PM
I agree.
Big Pharma are not handing out lower prices in other countries because they are good guys. Rather, they are charging more than market price for drugs in the USA because they can, since all involved parties (insurers, pharma, hospitals, politicians) have created the conditions that make it so easy for them to charge what they want.
I'm fully convinced that these companies could sell these drugs for the same price in the US that they sell them for overseas (e.g. the Mexico example in TFA) and still make a profit.
(Score: 5, Interesting) by sjames on Tuesday October 30 2018, @05:36PM (3 children)
They're playing a game of brinksmanship. Customs can't crack down too hard or the people in D.C. that want to kill the ACA and promote the "free" market would be forced to admit that they've done their damnedest to make the market non-free.
It's popcorn time. Since we're talking about big bucks, this will NOT be the last insurance program to promote personal import. That is to say, this will not be the last too big to fail corporation to openly defy the law that was custom ordered by other too big to fail corporations.
Meanwhile, the people will side with whoever provides their necessary health care the cheapest.
The GOP might be best off joining hands with the DNC to promote single payer so the whole game can be swept under the rug before someone discovers the marked cards.
Expect to see amazing contortions trying to avoid that.
(Score: 0) by Anonymous Coward on Tuesday October 30 2018, @07:06PM (2 children)
Yes, except that the DNC doesn't want single payer any more than the GOP does. That would definitely kill a very big golden goose. You people simply have to vote this shit out, starting next week!
(Score: 3, Informative) by sjames on Tuesday October 30 2018, @07:59PM (1 child)
Part of the DNC doesn't want it. art does. The part that doesn't got a slap to the back of the head and is widely seen to be the reason Trump won the election last time.
(Score: 0) by Anonymous Coward on Tuesday October 30 2018, @08:29PM
That is all irrelevant. What I am saying is that if you don't produce an alternative to the DNC/GOP monolith, you will get nowhere. You will be forever distracted with 'this part-that part' (good cop-bad cop).