Popular Media Targets the High Prices of U.S. Healthcare

The International Federation of Health Plans released data yesterday that compares the costs of healthcare around the world. Thankfully, The Huffington Post and Vox.com chose to cover this. While the Huffington Post article merely adds more proof that America has high drug prices, the Vox article points out something that we’ve been talking about for a long time: the U.S. pays more for the same exact products found in other countries. Sarah Kliff writes, “There’s nothing different about the Nexium that we buy in the United States and the pill that the Dutch buy – except that, in the United States, we’re terrible at negotiating a good deal on pretty much any medical service.”

Interestingly, there is sometimes a difference in various countries’ versions of Nexium: it is often sold as a tablet in Europe compared to a capsule in the U.S. Both products are made by drug giant AstraZeneca.  There are many instances where the exact same drug, made in the United States, is astronomically more expensive domestically than internationally. To show you, just hop on the time machine to our series Made in America; Cheaper Abroad.

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Americans may be concerned by recent reports in the media about the safety of medications made in India (e.g., the New York Times article “Medicines in India Set off Safety Worries”). Problems with Indian drugs should be neither overlooked nor overstated. In this post we try to put this into perspective for American consumers who purchase Indian medication at their local pharmacies, whether they are aware it’s from India or not, or directly from an Indian pharmacy by ordering online.

Over the past decade, prescription medicine made in India has been sold in large quantities in U.S. pharmacies. Today, according to the FDA, Indian medications make up about 33% of all prescriptions filled here.  In fact, Walmart’s ability to offer a $4 generic drug program was initially due to importing and selling medicines  from the Indian drug companies Ranbaxy and Cipla. However, last year Ranbaxy was found to be making false claims to the U.S. Food and Drug Administration and exporting medications to the United States that did not comply with FDA’s regulations.  The FDA fined Ranbaxy $500 million and banned importation of its products made in India.

It’s important to note that well-known brand name pharmaceutical companies, based in the U.S. and other rich countries, also have serious manufacturing problems. GlaxoSmithKline was fined $750 million for knowingly selling adulterated prescription medication that ended up in local U.S. pharmacies. In 2010, Eli Lilly was sent a warning letter from the FDA for violations of good manufacturing practices.  Those are two examples of many.

The FDA’s discovery of more problems at Indian manufacturing plants is not necessarily due to new health risks associated with Indian drugs. In the past, the FDA could not afford to conduct regular inspections of many, if not most, foreign drug manufacturing facilities. Greater funding under a new law has enabled more FDA scrutiny of Indian drug companies, which has led to increasing regulatory enforcement by FDA. A major problem is that the Indian counterpart to the FDA, the Central Drug Standard Control Organization, needs to do a better job regulating drug safety. In fact, FDA Commissioner Margaret Hamburg recently travelled to India to engage her counterparts in a plan to improve regulatory oversight of drug manufacturers. We applaud her initiatives with India.

Another issue in India is that some Indian manufacturers make less quality, lower cost medicines for sale to poorer countries and to poorer segments of the population within India. This two-tier system is sad but true.

So where does that leave you as a consumer?

Notwithstanding the greater scrutiny by FDA in India, Indian medications sold to Americans are generally of high quality, whether purchased at a U.S. pharmacy or from a PharmacyChecker-approved online pharmacy dispensing from India.  To be approved within the PharmacyChecker.com program, an Indian pharmacy must only dispense medications manufactured in plants which are 1) approved by FDA or by  other strong regulatory authorities such as those in Canada and the UK; 2) operated by the largest and best Indian drug manufacturers who are known to most consistently sell high quality medication; or 3) approved by Indian regulators and inspected by qualified American personnel to meet FDA standards of Good Manufacturing Practices. In addition, every Indian pharmacy approved by PharmacyChecker.com has been inspected by an American pharmacist with special expertise in international mail-order pharmacy safety, and its pharmacy license has been verified with regulatory authorities in India.

As we’ve written before, international online pharmacies are not just “Canadian pharmacies.” Most of the reputable ones originated in Canada but are now partnered with pharmacies in several countries, including India. Other verified and safe international pharmacies are located in Australia, New Zealand, and the United Kingdom. There are even pharmacies created specifically for international mail-order pharmacy services on island nations. The ones approved in the PharmacyChecker.com Verification Program meet very high standards.

Where you order from should be based on the best information available and we strive to provide it. India has become the top supplier of generic medications worldwide but not all their medications are created equal.

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Section 708 of the Food and Drug Safety and Innovation Act of 2012 allows U.S. Customs and Border Patrol (CBP) to destroy your imported prescription orders. Even if the drug is the real deal, safe and effective, it can be destroyed. But wait! The law can’t take effect until the Secretary of Health and Human Services, Kathleen Sebelius, publishes regulations that provide Americans the opportunity to contest when their medications are seized by CBP. She is drafting those regulations right now, which will be followed by a period for public comment. Let her know that she is now responsible for protecting your access to affordable, imported medication. She should understand. As governor of Kansas, Kathleen Sebelius adopted a personal drug importation program by providing information online that helped residents find lower cost medications from licensed foreign pharmacies.

Sign the Petition!

 

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A couple of news articles from the state of Maine have me wondering if more Mainers are going to start importing medication from international online pharmacies. Maine is the only state that has, through the passage of a law, removed state restrictions on personal drug importation from pharmacies in a number of countries.

An article from the Sun Journal highlights a survey designed to track the impact of the Affordable Care Act in Maine (and perhaps these findings will apply to other states, too). Both low and middle-income Maine adults are struggling with medical bills. Surprisingly, 35% of middle-income adults had problems paying bills, compared to 32% of low-income adults. Budget cuts in the state have led to thousands of residents losing Medicaid coverage, so it is likely that the numbers will worsen for low-income adults.

Speaking of budget cuts, Maine Governor Paul LePage did not choose to expand another state program, Mainecare, which helps low-income residents pay healthcare providers. Samantha Edwards, writing for WLBZ, notes that residents who were in these programs are now looking elsewhere for assistance, especially for prescription drugs. The cuts to state programs are forcing municipalities to cover the costs. Rindy Folger, of Bangor Health and Community Services, said, “Since January 1st, we have seen over seventy-five people who we have never seen before who are now coming in looking for help with their medications…Monthly right now we are paying about $9,500 in prescriptions which, over the course of the year, is a significant amount of money for the Bangor taxpayers to have to pay.”

If municipalities like Bangor are going to be picking up the tab for medication, it might be wise for them (or the state) to implement prescription drug importation programs. Portland saved $200,000 a year on health care when it served prescriptions to its employees through PortlandMeds, a prescription drug importation program. It’s very possible – and reasonable – that more municipalities will implement these programs if the Maine’s healthcare cuts continue.

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Today, the New York Times published an Op-Ed by PharmacyChecker.com Vice President Gabriel Levitt entitled “Scare Tactics over Foreign Drugs” which explains that actions by our government and the pharmaceutical industry to frighten people risks leaving them without the medicines they need. I encourage you to read the article.

To learn more about the issues at play check out The International Online Pharmacy Report for 2013: The Good, the Bad, and The Ugly.

 

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Generic Drug Price Gouging Theory

It seems Americans are increasingly showing up at their neighborhood pharmacies to find out that their medications’ prices have increased exponentially, by as much as 100, 200, 300, 600%…2500%! Believe me, I’m not exaggerating. In an article with a similar title as this blog post, called “Drug Price Gouging,” Steve DeFillippo brings us two examples of sickening drug price spikes. In one instance, a Mr. Gary Loser showed up at the pharmacy only to find that the price of his prescription drug went from $5.50 to $34.50 – an increase of 600%. Mr. DeFillippo then one upped Mr. Loser by recounting his drug price blast-off, when the price of his medication, Nadalol, went from $10 to $252 for a  for a 90 day supply – a 2500% increase!

Americans frequently, and usually with good reason, blast big brand-name drug companies, like Eli Lilly, Merck, and Pfizer for charging much higher prices domestically than internationally. In this case we can’t slam big pharma because the medication at issue, Nadolol, is generic and has been around for 40 years. Generic drugs are usually pursued by consumers because their prices are so low. Moreover, generic drugs are usually less expensive in the U.S. than in Canada and many other countries.

So what the heck is up?

The “theory” I’m proposing is more or less just telling you what I’ve heard anecdotally from small U.S. pharmacy owners about these insane generic drug price increases. Over the last year or so, big chain pharmacies, such as CVS and Walgreens, have started to raise generic drug prices to maximize their profits. Now their profit margin is largely the difference between their costs, the wholesale price, and what they can sell it for to individuals, the retail price. Wholesaler pharmacies have apparently realized how much money the big U.S. pharmacy corporations are making on the large profit margins from some generic drugs. These wholesalers want a bigger piece of the pie so they are raising their prices, too. When that happens, good ole’ mom and pop pharmacies, ones that have tried to keep prices down, have to raise their prices, too. So it’s a vicious spiral.

You often don’t have to pay those crazy high prices but you’ve got to shop around. For instance, Nadolol 20mg can be purchased for much less, 100 pills for $52.22, using a prescription drug discount card at a local U.S. pharmacy.

I recommend calling your local pharmacy before you go pick up your medication. If the price is too high then go elsewhere to avoid getting gouged.

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Last week, we reported on proposed changes to Medicare Part D that could have made it harder for millions of seniors to obtain prescribed medicine. One congressman from Pennslvania, Tim Murphy, went so far to say that suicide rates would increase as a result of the proposed changes, referring to a change that would have allowed insurers to reduce coverage for antipsychotics, immunosuppressants, and antidepressants. Other proposed changes included allowing the government to intervene in contracts between insurers and pharmacies, limiting the number of drug plans available, and also expanding access to community pharmacies.

Outcry from both sides of the aisle, as well as patient and consumer rights advocates, has resulted in the Obama administration reversing course on the changes. “We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years,” wrote Marilyn Tavenner, Administrator of the Centers for Medicare and Medicaid Services.

We are glad specifically that coverage for critical medication will remain strong and that the number of drug plans will not be limited in certain areas. We know that the intention of reducing drug plans was to help make it easier to choose a plan. On the other hand, we support expanding access to community pharmacies and hope for further action on that front.

Fortunately, there are online resources that can help with this. Not all Medicare drug plans are created equal. PharmacyChecker.com runs MedicareDrugPlans.com, which you can use to compare plans and read or write reviews on those plans available in your area.

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Future Changes to Medicare Part D may curtail access to affordable medication for millions of seniors enrolled in Part D prescription drug plans, according to Kaiser Health News and USA Today.

The Obama administration wants to remove three drug classes, immunosuppressants, antipsychotics, and antidepressants, from the list of specially protected drugs. What this means is that insurers would no longer be required to cover the majority of these drugs in those classes. What that means is that more  patients will struggle to afford – and even skip – medications due to high out-of-pocket costs at U.S. pharmacies.

An alliance of Democrats, Republicans, drug companies, and patient advocates oppose the proposal. Rep. Tim Murphy, R-PA, who is also a psychologist, fears the worst: “If you restrict access to these drugs you restrict the treatment of mental illness,” he said. “You raise suicide rates.” Murphy’s sharp statement suggests just how important drug coverage for Medicare beneficiaries is. Over half of seniors aged 65 or older take at least five prescription drugs, and a carefully organized prescription plan may have disastrous side-effects if a drug is switched for another. Such substitution would likely occur for many patients if drugs are removed from special protection. (more…)

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Testifying before Congress was the last place I expected to see Seth Rogen, star of movies Superbad and Knocked Up. But there he was, in front of the Senate Appropriations Subcommittee on Labor, Health and Human Services, speaking about his family’s experience with Alzheimer’s disease in order to raise awareness about its effects, including the high costs of treatment.

Although there is no known cure for Alzheimer’s or its progression, there is medication that can help alleviate symptoms, such as memory loss and confusion. Rogen points out that he can’t imagine how patients on limited incomes treat Alzheimer’s and that it is the most “costly condition in the United States…where in a country for a dollar and twenty-nine cents you can get a taco made out of Doritos.” We thought it would be helpful to show how much Americans can save on Alzheimer’s medication by ordering from a verified international online pharmacy. Looking at one brand name and two generic medications, we found an average savings of 72%.

Savings on 3-month Supplies of Alzheimer’s Medication

Drug Name U.S. Pharmacy Price International Online Pharmacy Price Percent Savings Annual Savings
Rivastigmine (Exelon) – 3 mg, 180 pills – generic $959 $106.40* 89% $3,410.40
Namenda – 10 mg, 180 pills $1,139 $207+ 82% $3,728
Galantamine(Razaydne) – 8 mg ER, 180 pills – generic $546 $293.40+ 46% $1,010.40
U.S. Pharmacy Price from Rite-Aid in New York City. International Online Pharmacy Price  taken from PharmacyChecker.com.
*Price calculated from 90 pills
+Price calculated from 100 pills
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As recently reported by PBS, America continues to outspend other rich countries on pharmaceuticals, spending almost $1,000 per person on prescription drugs in 2013. Canada, the second highest spender, spent about $700 per person. This is despite one in five Americans skipping doses or a script due to cost, as well as an extremely high percentage (84% in 2011) of prescriptions being written for generic medications.

So what’s up? Well, for one, our drug prices are much higher. Our latest analysis of brand-name drugs sold by international online pharmacies found that their prices were 88% lower when compared to a pharmacy in New York City.

Major drug price differences aren’t the only reason for higher U.S. spending. PBS explains that Americans, sadly, fill more scripts due to higher rates of obesity, diabetes, and high blood pressure, which of course equates with greater numbers of prescription drug purchases. Another factor is that it’s relatively easy for drug companies to get new drugs approved and in to the U.S. market.

I was a bit surprised that PBS didn’t mention direct-to-consumer advertising as a possible reason for why we use more drugs. New Zealand is the only other country that allows direct-to-consumer advertising, but they have much lower drug prices than the U.S.,  due to government regulations.

For the newly insured, Obamacare might mean lower prices for consumers, but that doesn’t mean overall national spending will go down. Lower out of pocket costs from better co-pay or co-insurance models will likely just mean higher premiums and increased reimbursement to drug manufacturers by insurance companies. Look at it this way: if you spend $20 less on a drug per month, but your premium is $20 more, you’re not really any better off.

Interestingly, U.S. drug spending decreased slightly last year, thanks largely to patent expirations resulting in more generic drugs penetrating the market. While PBS mentions that the decline is expected to last another 2-3 years, I’m not so optimistic. For one, generic drug prices are rising, sometimes by thousands of percent. Second, more coverage under Obamacare means more prescriptions, and naturally more spending. Only time will tell…

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