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Drug
Trips (September 2001) While Washington debates how to make
medicines more affordable, many Americans are going to Canada to
get a better deal. Here's how - and why - they do it |
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LAST YEAR, A HEART attack nearly killed Judy Whalen. She was visiting with friends at the Everett, Wash. Elks Club when she suddenly fell out of her chair. Whalen was dead for three to six minutes before paramedics revived her. Now she pops nine meds in the morning, a diuretic in the afternoon and a cholesterol reducer at night. "It's amazing I'm alive," she says.
Confused yet? So, it seems is the government; the FDA has chosen to interpret the personal importation rule far more rigorously than anyone else, including U.S. Customs officials, who enforce the regulations, and Congress, which provides funding for enforcement. Strictly speaking, importing drugs is illegal, but in many instances Customs lets you do it anyway," explains Philip Katz, partner in the health and biotechnology group of the Washington, D.C. law firm Crowell & Moring, where he specializes in regulatory issues. "In practice, if it's a three-month supply and the drugs don't appear to be brought in for resale, they're not going to bust anyone's chops." Privately, Customs officials admit that even if they did want to inspect personal prescriptions, they lack the resources to do so. Border inspections rarely involve more than asking for identification and prescriptions, then checking to make sure the names match the meds. Closing their eyes to Americans who import prescription medications allows Customs to stay clear of the political brawl over drug prices. In addition to the new federal initiatives, lawmakers in 44 states are considering plans to lower the cost of prescriptions for the uninsured. The pharmaceutical industry, however, has gone to court to quash government programs in Maine and Vermont. In June, after the drug industry won a round in federal court over Vermont's drug discounting plan, Gov. Howard Dean -- an internist himself -- suggested that the state's uninsured citizens buy their drugs in Canada to save money. During the election campaign season last year, consumer groups and congressional candidates, including U.S. Senator Debbie Stabenow of Michigan, organized drug-purchasing trips. "It's particularly frustrating for people," Stabenow says, "when they can stand on the shore in Detroit or Port Huron and look across the river and know all they have to do is take a five-minute drive across the bridge and lower their prices by half or more." For these politicians, gaming the drug distribution system is akin to a political protest. Instead of young men fleeing to Canada to dodge the draft, the uninsured are crossing the border to sidestep the free-market forces that make some medicines so expensive in the U.S. Says Gov. Dean: "There clearly is no economic pressure (in the U.S.) to keep costs down. I see this as a way to get the free market to work better." THE LURE OF THE NORTH In Canada, most brand-name drugs cost between 30% and 70% less than they do in the U.S. There are two reasons for the difference. First is the cheap Canadian dollar -- $100 U.S. buys roughly $155 in Canadian goods, a 33% automatic savings. Second, and more important, is price controls. The Canadian government limits how much pharmaceutical manufacturers can charge for brand-name drugs when they are approved and caps subsequent price increases. As a result, medicine prices have risen an average of less than 1% a year since 1988 vs. 5.1% in this country. Not surprisingly, pharmaceutical companies consider Canada's policies unfair restrictions on their pricing and profit. In addition, unlike other industries, notes Shannon Herzfeld, senior vice president of the Pharmaceutical Research and Manufacturers of America, drug companies have been forced to absorb the full burden of the declining Canadian dollar. "If I were selling hotel rooms or wool coats, I could raise my prices to adjust for a declining currency, but we're not allowed to," Herzfeld says. "That goes against the principles of an open trade system and a floating exchange rate." Beyond drug pricing, though, we're also taking a lot more drugs than we used to -- and they're not 10-day prescriptions, they're lifelong regimes. Americans spent $140.7 billion on prescriptions last year, more than twice the $68.6 billion spent in 1995. Fifty-four percent of Americans now take prescription drugs regularly. Why? Breakthrough treatments for serious illnesses like cancer, heart disease and diabetes are keeping us alive and out of the hospital. Last year, half the $19 billion increase in U.S. prescription-drug spending came from just 23 drugs, most of them recent market arrivals. Among them: Vioxx, the new arthritis pain reliever; Lipitor and Zocor, the top cholesterol zappers; Avandia for diabetes; and painkiller OxyContin. We're also using more drugs to enhance our lifestyles: Claritin for allergies, Viagra for impotence. Extraordinary drugs like these, and the ability to sell them for whatever price the market will bear, have made drug companies superb investments. But for uninsured consumers, that success is costly indeed. As the contingent from Everett drives toward Canada -- a two-hour trip when there's no traffic -- retired bookkeeper Corky Lyman, 67, reaches into her purse and pulls out a spreadsheet detailing the medicines she and her husband Dale take. She tracks their drug costs so she can take a deduction on her tax return. Corky doesn't care much about the politics of buying drugs across the border, but she can smell a good deal. "Dale's had three heart attacks and has cancer," she says. "Dale, how many pills did you take this morning?" "Fifteen," Dale, 68, who is behind the wheel, calls back. The Lymans spent about $2,800 last year on drugs. Without the drugs, though, it's doubtful that Dale would be in good enough shape to drive the van. The people who benefit most from the drug industry's innovations are often the least able to afford them: people over age 65. Unless Congress expands Medicare to cover prescriptions, many seniors will continue to go without a drug benefit. The percentage of employers offering health insurance to retirees, the most common source of drug coverage for seniors, shrank from 40% in 1990 to 30% in 1998, and further cutbacks are imminent. Premiums for supplemental policies that cover prescriptions are skyrocketing. But seniors aren't the only ones who suffer. The 42 million uninsured plus an additional 11.5 million people whose health insurance doesn't cover drugs -- self-employed workers like Judy Whalen and employees of small businesses, for example -- also pay hefty drug bills. And they would be helped not at all by the Medicare changes being debated in D.C. For these people, the chance to cut their medicine bill in half by crossing the border can be too good to pass up. "MY CARDIOLOGISTS ARE THRILLED" As we drive, Judy Whalen tells me, "My cardiologists are thrilled that I can do this." No one keeps track, but doctors and pharmacies along the borders in Canada and Mexico report that they are being inundated with Americans seeking prescription medications. In downtown Tijuana, there are 39 pharmacies in 10 square blocks, and hawkers approach tourists on the street. Marv Shepherd, a professor at the University of Texas' College of Pharmacy, estimates that 25% to 40% of Americans driving to Mexico return with prescription drugs, most of which can be obtained over the counter. "They sell them like Hershey bars," Shepherd says. In Canada too, clinics and drugstores are feeding the demand. Whalen and friends are traveling to the town of Surrey, British Columbia, where a prescription clinic named DoctorSolve opened last year to serve people from the States. An Elks Club member read about the clinic in a newspaper and organized the trip. Dr. Paul Assad, the jovial, white-haired co-founder of DoctorSolve, says he and his partners were longtime emergency-room physicians who worked together at a walk-in urgent-care clinic in Surrey. About 18 months ago, media reports highlighting the disparities between U.S. and Canadian drug prices plus a strong U.S. dollar began drawing U.S. patients to the clinic. Waiting times became unacceptable, and the clinic couldn't handle the load. So he and four partners decided to invest in a second location just for Americans. They chose a strip mall located close to their urgent-care clinic and two doors down from a local pharmacy, the Medicine Shoppe. For the first few months after DoctorSolve opened last September, media coverage was so prolific that the clinic did no advertising; these days it places ads in U.S. newspapers. Assad and his partners also give presentations at senior centers in Washington. The clinic gets roughly 30 visitors a day, 95% of them are seniors, but Assad also reports that an increasing number are coming from American fertility clinics. (One 75 IU vial of hormone drug Gonal-F -- not covered, typically by medical insurance -- costs about $75 on Drugstore.com, compared with $46 U.S. at the Medicine Shoppe. A woman undergoing infertility treatment may use up to six vials a day.) Business is good, Assad admits, but he adds, "This isn't just a business opportunity. People really need these drugs." THE FIVE-MINUTE CHECKUP It's a few minutes past noon when we arrive at Dr. Assad's clinic. The group's prescriptions have already been faxed to DoctorSolve and sent over to the Medicine Shoppe. One by one, office manager Wendy Morris calls people up to photocopy their identification and collect payment -- $39 U.S. When nurse Debbie Tschritter leads Judy Whalen and her husband Ty into one of the clinic's small rooms, it's immediately apparent that this is no ordinary doctor's office. There are no exam tables, no medical supplies, just a desk and three chairs. Clinic doctors and nurse practitioners make very clear that they are not providing any medical advice or treatment, and visitors must sign a waiver acknowledging this: "I understand that no one on behalf of DoctorSolve Healthcare Solutions will take any steps whatsoever to determine whether [my] prescription is appropriate." The clinic functions instead as the first half of that would, in the U.S., be a visit to a superlatively attentive pharmacist. The medical interview -- it is by no means an exam -- is thorough, businesslike and quick. Tschritter goes over Whalen's forms, asking about her allergy to iodine, making notes about her pacemaker. The nurse reads each medication and dosage off the faxed list, double-checking. "You'd be surprised how often things are written wrong, the wrong dosage, or the number of times a day," she says. She asks if Whalen's cholesterol-lowering medication has produced the desired effect (it has) and which over-the-counter products, aspirin, and vitamin supplements she uses. When Tschritter gets to Whalen's Toprol XL 100mg, she stops. "We don't have this extended-release form available in that dosage," she says. "You'll have to take 50mg twice a day." Whalen is willing to make the change. Tschritter says that she'll fax Whalen's doctor. The visits take less than five minutes apiece. Nurse Tschritter and Dr. Paul Zickler rewrite everyone's prescriptions, giving them a three-month supply -- the most that the FDA will allow back in the country for personal use -- and a refill for three months' more. What do U.S. doctors think of this process? According to Dr. John Nelson, a trustee of the American Medical Association, the AMA has no official policy on Americans filling prescriptions abroad. But personally he has no problem with the idea, as long as foreign pharmacies make no substitutions. "If I prescribe brand-name Lipitor and they get the same thing cheaper in Canada, more power to them," Nelson says. MAKING THE BUY Once we leave DoctorSolve, we walk past the clothing boutique to the Medicine Shoppe to pick up the prescriptions. Pharmacist Chris Lewis and his assistants have bags of pills ready to be rung up -- in fact, the pills were ready before we'd even arrived in Surrey, he explains. For some brand-name drugs, the savings are astonishing: A three-month supply of 25mg Zoloft, the antidepressant, costs $41 vs. $188.91 at the Seattle Costco; three months of hormone-replacement drug Premarin is $13.22 vs. $47.67; and the antiulcer drug Prevacid is $133.87 vs.$321. Generic drugs, on the other hand, cost about the same. Lipitor is another bargain -- and Lewis explains to Joyce and Don Tisdale that they can save even more by cutting 20mg tablets in half to get their daily 10mg dosage. Lipitor's 10mg tablets run about $1.20 apiece in U.S. dollars, and 20mg Lipitor, $1.49. Cut the larger-dosage pill in half and you're paying only 75¢ per daily dose, another huge savings. (Back in Washington, 10mg Lipitor tabs cost $1.77 each.) Halving pills is safe, Lewis assures the Tisdales, putting a pill cutter in their bag. "People in the States are buying 40mg Lipitors and cutting them in quarters," he adds. "That's no good. You can't get a precise cut, and it leaves medicine on the table". There is one disappointment. The spironolactone diuretic that Whalen takes for her blood pressure is out of stock. But there are also pleasant surprises: Boxes of the allergy medications Claritin and Allegra line the shelves, they don't require a prescription -- and there's a sale: Buy one 18-tab box of Claritin for $16.99 , get one free. That's more than a month's worth for about $11.30 U.S. According to a recent survey in Florida, customers pay from $64 to $93 for the same supply. In the end, Whalen rang up sales of $381.90 Canadian, about $246 U.S., for a three-month supply of five medications. At Costco, she'd have paid $570. "This is wonderful!" she exclaims. Then it's back in the vans for a five-minute drive to White Rock, a charming collection of bistros, galleries and shops along a red-brick promenade that overlooks a wide bay. A leisurely walk leads to local restaurant Charlie Don't Surf, where chicken and goat cheese panini beckon. The group is enchanted and decides that when it's time to come back, they'll spend the weekend so they have a day for swimming and shopping. BACK ACROSS THE BORDER Around 3:45 p.m., we're on the road again, heading south. Customs lines are short, and Don Tisdale pulls right in. The inspector peers into the van and jokes, "How many children in the car?" Then, the routine questions: "Where are you from?" "What brings you here?" When Tisdale says that we came to buy prescriptions, the inspector asks, "Canadian doctor or American doctor? What kind of prescriptions?" Customs agents seldom show interest in small amounts of prescription drugs; they're really trying to prevent drugs from being imported for resale. The FDA has other concerns. The agency wants everyone to know that drugs purchased in another country may not be the same as their American counterparts. "It's important that people know the risks they're taking." Jeff Shuren says. Other countries may not put their drugs through as strict an approval process as the U.S., he explains, or control manufacturing as tightly. Foreign drugs could be contaminated, expired, damaged in transit (if they get too hot or wet, for instance) or counterfeit. Labeling may be unclear or in a language that purchasers don't understand, and the FDA worries that people obtaining drugs in countries where no prescription is required may take them without adequate supervision. The FDA does not distinguish between countries in its guidelines, or in conversations with me, but the agency appears to be more concerned about drugs from Mexico, where most medications, including antibiotics and antidepressants, can be had with no prescription. Last year, the industry group Pharmaceutical Research and Manufacturers of America tested some drugs bought in Mexico and found that several contained impurities or too much active ingredient. But how much does all this really matter to DoctorSolve's eight customers from Everett and other people like them? Canada has its own federal bureaucracy to monitor drugs' safety. And although on very rare occasions Canadian drugs may have different inactive ingredients than their U.S. counterparts, they are otherwise the same. Brand-name drugs like Lipitor are produced by the same corporations that sell them in the U.S. For their part, Assad from DoctorSolve and Lewis from the Medicine Shoppe say they make it a point to play by the rules. Assad purchased extra liability insurance at the highest of British Columbia's College of Physicians and Surgeons and developed his medical forms with the board's approval. Plus DoctorSolve's staff won't rewrite any prescriptions that are more than a month old. Back on the road again toward home and tonight's dance back at the Elks Club, no one seems the least bit tired. Lynn Mullins and her friend Maralyn Smith compare their prescriptions and calculate that they've saved about $250. Mullins wants to organize large public bus trips to DoctorSolve every three months. The idea that the FDA might consider her money-saving strategy technically akin to drug smuggling never even crosses her mind.
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If
her heart troubles don't kill her, the drug bills might.
Whalen, 58, spends around $190 a month on prescriptions,
almost $2300 a year. Her part-time work selling
antiques provides no insurance, so Whalen is on her own.