Friday, March 3, 2017

Pharma’s Stranglehold on the American Consumer

A client recently visited my office, ecstatic that a new prescription medication that cures hepatitis C is available for his wife. He came in to find out if his shiny new 2017 health care policy (his fourth in four years) covers the drug. After checking for him I found out that the medication is not yet approved for coverage. “But that’s OK I can check the uninsured price for you at all of the local pharmacies.”
A quick check on my handy, dandy price checking app found the best cost for the medication at a local pharmacy. Now, in order for the medication to cure his wife’s disease she is required to take one dose per day for twelve weeks. The drug is dispensed in four- week supplies, so she will need three, four-week supplies. The best price that I could find? $32,138.80! Times three refills, that’s only $96,416.40. And so, another client left my office debating to himself, “Do I cure my wife’s disease or do I keep my home?”

This is an extreme example of the prescription drug issue that particularly confronts those who are responsible for their own health care and those who are 65 or older. No question about it, there are effective cures to be had, but at what price?

Consequently, I am regularly asked by our clients, “Is it legal to obtain my prescription medications from other countries?” The answer is “Technically, no.”

Here is the official position on that question from the U.S. Food & Drug Administration:
“In most circumstances, it is illegal for individuals to import drugs into the United States for personal use. This is because drugs from other countries that are available for purchase by individuals often have not been approved by FDA for use and sale in the United States. For example, if a drug is approved by Health Canada (FDA’s counterpart in Canada) but has not been approved by FDA, it is an unapproved drug in the United States and, therefore, illegal to import. FDA cannot ensure the safety and effectiveness of drugs that it has not approved.
FDA, however, has a policy explaining that it typically does not object to personal imports of drugs that FDA has not approved under certain circumstances, including the following situation:

    The drug is for use for a serious condition for which effective treatment is not available in the United States;
    There is no commercialization or promotion of the drug to U.S. residents;
    The drug is considered not to represent an unreasonable risk;
    The individual importing the drug verifies in writing that it is for his or her own use, and provides contact information for the doctor providing treatment or shows the product is for the continuation of treatment begun in a foreign country; and
 Generally, not more than a 3-month supply of the drug is imported.”

So the real answer to the question is “No, but we’ll look the other way if it’s just for you and it’s not a controlled substance.” Doesn’t instill a lot of confidence in patients who are often desperate for medication but strapped for money.

The pharmaceutical industry exercises a heavy hand on direct consumer imports of drugs from other countries. A great deal of money is spent by Pharma for the purpose of perpetuating fear and doubt among US consumers who wish to source their medications from foreign countries. Although it is not uncommon to reduce costs by 40% - 80% for identical medications from US pharmacies many consumers are fearful of contaminants and counterfeit copies from foreign countries.

Let’s face it the US pharmaceutical industry, with annual US revenue of about $425 billion is extremely powerful. Here’s an interesting statistic. The US pharmaceutical market accounts for roughly 40% of worldwide sales but the US has only 5% of the world’s population. This tightly controlled industry is one of the reasons that US per capita health spending is so high and therefore health care premiums are also so high.

Not coincidentally, the US is the only country in the world that allows consumer direct advertising of pharmaceuticals. But those same consumers, of course, cannot acquire the medications that are advertised unless they obtain a prescription from their prescriber. So, in terms of other cost drivers of health care and health care premiums we have a pharma industry that blasts consumers with high priced ads, and consumers who then need to pay for doctor visits to obtain prescriptions, fill their prescriptions at US pharmacies while paying inflated prices that are required in order to fund those expensive prime time commercials. In fairness, the US pharma industry also conducts most of the world’s pharmaceutical research…but it spends far more on advertising and promotion than on research. And so, for these reasons,  health care costs continue to rise through the stratosphere.

Now, although every industrialized country in the world has its own version of the FDA US consumers are still significantly blocked from directly sourcing their drugs elsewhere. However, while consumers are blocked from direct imports US pharmaceutical makers imported $92.5 billion in medications in 2016. They process and package them in US-approved packaging and sell them in pharmacies and distribute them in hospitals throughout the US.

There are those of you who will say that they feel safe and protected from shady foreign sources of potentially dangerous drugs. And I am not here to minimize those feelings but US consumers acquire hundreds of billions worth of potentially “dangerous” goods from other countries every year without encountering the roadblocks that exist for prescription medications. By comparison to the entire US pharma business of $425 billion, by the best sources I can identify, only about $3 billion in pharmaceuticals are sourced from foreign countries directly by US consumers. That’s about 7/10 of one percent of the US pharma industry’s value.

Here are some examples of other “potentially dangerous if unregulated” products that are imported into the US and bought by consumers:

    Foreign Vehicles -                   $285 billion per year
    Alcoholic Beverages -             $17.6 billion per year
    Firearms -                               About 4 million firearms are imported each year. |
                 If you assume an average value of $250 each that’s another $1 billion.

In every case of the products above the US has established standards of safety, performance, and inspections. Some are able to be bought directly by consumers, others, like vehicles, must be bought through dealers. Unlike pharmaceuticals, however, the industries above do not fund or conduct misinformation campaigns designed to instill fear and doubt in consumers about foreign made products. For these reasons the consumer prices of these products are on par with most other countries, much unlike pharmaceutical pricing in the US and its far higher costs than nearly every other country in the world.

Are you angry yet? I hope so. Big pharma is one of the main reasons that health care costs are so high and I hope that this article has given you a little insight into how the system is rigged against you. If you’re motivated to take action contact your congressional representatives and let them know that it’s time that they revisited our laws and regulations and brought our prescription costs in line with the rest of the world.

Thanks for reading.

Alan Leafman, President
(800) 955-0418

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