President-elect Donald Trump broke with GOP orthodoxy during the 2016 campaign by endorsing the idea of opening U.S. borders to the re-importation of cheaper drugs from Canada and other countries as a method of bringing down health care costs and discourage price gouging by the pharmaceutical industry.
Trump outlined his support for this move – vigorously opposed by the drug industry and the Food and Drug Administration, among others – in a seven-point health care reform plan unveiled last March. Trump also embraced another idea that was favored by Democratic presidential nominee Hillary Clinton and Sen. Bernie Sanders (I-VT) to authorize Medicare officials for the first time to negotiate with drug manufacturers to sharply reduce their prices.
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“Congress will need the courage to step away from the special interests and do what is right for America,” the Trump campaign plan stated, in promoting market-based solutions to containing health care costs. “Allowing consumers access to imported, safe, and dependable drugs from overseas will bring more options to consumers.”
Drug re-importation refers to the idea of importing back to the U.S. prescription drugs that were originally manufactured in this country and then exported for sale in other countries. Many U.S. drug manufacturers market their products throughout the world and negotiate different price structures in virtually every country.
The idea of lowering barriers to overseas drugs has been around for a long time, fueled by reports showing that Americans pay some of the highest prescription drug prices in the world. Countries like Canada, Mexico, Great Britain, South America and India pay far less because prices are typically dictated by the government. According to the International Federation of Health Plans, Americans pay anywhere from between two and six times what the rest of the world pays for brand name prescription drugs.
For instance, last year Gleevec, a cancer treatment drug, cost Americans and their insurers $6,214 per month for treatments, while Canadians paid only $1,141 and residents of Great Britain paid $2,697 per month, as CNN reported. It was a similar situation with Humira, a drug for the treatment of rheumatoid arthritis that cost U.S. residents $2,246 per monthly treatment compared with $881 in Switzerland and $1,102 in England.
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A December 2015 international drug cost survey by Bloomberg concluded that prices for brand-name drugs are typically much higher in the U.S. than in other developed countries, even when factoring in the discounts and rebates that pharmaceutical companies frequently provide to insurers, government agencies such as the Veterans Administration and Medicaid. Even with discounts of as much as 50 percent to 60 percent, seven out of ten top-selling brand name drugs were still much costlier in the U.S. than overseas.
Those drugs included Crestor, a pill to lower cholesterol; Lantos, a long-acting insulin; Advair, an asthma inhaler; Januvia, a pill to treat diabetes; Sovaldi, the wonder drug for treating the Hepatitis-C virus; Humira, a rheumatoid arthritis drug self- injector; and Herceptin, an infusion for the treatment of cancer.
In the case of Sovaldi, manufactured by Gilead Sciences in California, one pill for treating Hep-C cost $1,000 in the United States but only $4 in India, where the manufacturer agreed to lower the price in exchange for volume sales.
As the cost of prescription drugs in this country continues to mount, millions of Americans appear to be taking matters into their own hands and looking overseas for relief – even if that may require breaking the law. It has long been known that many Americans routinely purchase prescription drugs on the Internet or while traveling to Canada, Mexico or other countries.
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Pricey specialty drug prices are projected to increase 18.7 percent next year, after growing 18.9 percent in 2016, according to HR Consultancy Segal. Meanwhile, the overall cost of all drugs prescribed for employees under age 65 is expected to grow 11.6 percent next year, on top of an 11.3 percent hike this year, as The Fiscal Times reported recently.
A new Kaiser Family Foundation national poll conducted in November found that eight percent of those interviewed said they or someone in their household had imported a drug at some point. That would be the equivalent of about 19 million adults, based on current census estimates.
Those people ranged from college students in their 20s to retirees in their 80s, according to the analysis. Some purchased medication to treat high blood pressure and other chronic conditions. Others acquired the drugs to treat acute problems like sinus infections and acne.
Those numbers, if accurate, indicate a major surge in the number of Americans seeking bargain-basement drug prices from neighboring countries or overseas – or at least an increase in the number of people willing to openly discuss it. Previous government surveys dating back to 2011 suggested that the share of Americans buying prescription drugs from other countries was about two percent, according to the report.
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Some people may have been reluctant to talk about their health care costs or admit that they have turned to overseas markets for better deals, according to experts.
But with Trump and some prominent Democrats and independents endorsing the idea of drug re-importation as a cost-saving measure, average Americans may feel more comfortable about admitting that they have been quietly engaging in those transactions for years.
It is illegal for individuals to import drugs into the U.S. for personal use, according to the Food and Drug Administration and U.S. Customs officials. The basic argument that federal authorities use against drug re-importation is one of safety. That is because many drugs from other countries that are available for purchase by individuals here have not been formally approved by the FDA for sale in the United States – and may not be safe for use.
“FDA cannot ensure the safety and effectiveness of drugs that it has not approved,” the agency says on its website.
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That’s a far-fetched argument to make in discouraging drug purchases from countries like Canada or Great Britain whose health care standards are on par with those of the United States. However, it may have more sway in arguing against buying drugs from other countries in Europe, Latin America, South America and Asia, or from acquiring drugs on through the internet.
The pharmaceutical industry – which has long opposed drug re-importation because of the adverse impact it would have on its profits in this country– cites World Health Organization (WHO) estimates that 10 percent of medicines worldwide – and up to 50 percent of the drugs consumed in developing nations – are counterfeit.
“Without proper FDA oversight and enforcement of laws designed to protect patient safety—which importation undermines— these products could infiltrate the U.S. pharmaceutical supply chain, with life-threatening consequences,” Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s chief lobbying arm, has argued.
However, the FDA and customs officials have not been overly aggressive in enforcing the law – although U.S. border inspectors have broad discretion in deciding whether to destroy the drugs if they are discovered at a point of entry. And the FDA says that it “typically does not object to personal imports of drugs that FDA has not approved under certain circumstances.”
For example, the FDA makes exceptions for a drug needed for a serious condition for which effective treatment is not available in the United States, or in cases where there is no commercialization or promotion of the drug to U.S. residents.