Buying drugs from Canada can cost 80 pct. less, and FDA wants to shut it down

Schenectady County, N.Y., is on track to pay 20 percent less on prescription drugs for its employees this year than in 2003.

Flagler County, Fla., expects to save nearly $200,000 in 2017 on brand-name medicines for its 800 workers, its total drug costs having fallen by 10 percent since last year.

Kokomo, Ind., has found a way to save so much money buying drugs that it offers employees a 90-day supply of dozens of popular brand-name medicines free.

While the nation grapples with soaring prices of drugs, dozens of cities, counties, and school districts across the country have quietly found a solution they say protects their budgets and saves workers money: They are helping their employees buy medicines from pharmacies in Canada and overseas, where prices are up to 80 percent cheaper.

"We love it. … It's a win-win for us and our employees," said Anita Stoker, benefits and wellness manager for Flagler County, on Florida's northeastern coast, which in 2015 started offering its employees a program to get drugs from pharmacies in Canada, England, Australia, and New Zealand.

The numbers are growing, even though the U.S. Food and Drug Administration says the practice of importing prescription drugs is illegal and is stepping up enforcement, with raids on stores that helped people order overseas, and even visiting some customers' homes to collect evidence of illegal purchases.

So far, the FDA has made no move to shut down these employee-benefit programs — a few dating back over a decade, but most far more recent.

The FDA doesn't prosecute consumers buying medicines from foreign pharmacies for personal use, although — if detected — such packages are intercepted at the border as contraband and their contents returned or destroyed.

But signaling it may be stepping up enforcement — at least against middlemen who facilitate the practice — the FDA in October raided nine central Florida storefronts that helped a mostly senior population buy drugs from Canada and other countries. The stores don't stock any medicines but assist consumers in ordering drugs from foreign pharmacies. Criminal investigators warned the stores' owners they were operating illegally and could face fines or jail time. They were not shut down.

Bill Hepscher, co-owner of Canadian MedStore, which owns six of the nine storefronts visited by the FDA, says he's only helping consumers do what the FDA says they can do without fear of government prosecution. He said it's not fair that his stores get targeted for assisting consumers while municipalities across the country are doing the same thing for their employees.

Congress has passed legislation legalizing the importation of prescription drugs several times in the last 20 years, but both Democratic and Republican administrations have opted not to implement it. The FDA has said reimporting medicines from outside the United States is dangerous because of the possibility that medications are counterfeit, mislabeled, or otherwise unsafe — a view vigorously supported by the pharmaceutical industry.

But rising drug prices have given the reimportation idea new life — in Congress and in practice.

In hearings earlier in December, Sen. Rand Paul (R., Ky.) said he would oppose the nomination of Alex Azar, a former drug company CEO, as head of Health and Human Services, unless Azar commits to implementing an importation plan. Told by Azar that the problem was guaranteeing safety, Paul replied: "That's [nonsense]. The American people think it's [nonsense] that you can't buy drugs from Europe or from Canada or Mexico or other places."

A growing number of city and county officials argue that their employees should have the option to buy less expensive drugs and that helping them do so doesn't violate any laws.

Consumers need a doctor's prescription just as they would to buy medicine from their local pharmacy.

The price savings for common medicines outside the U.S. can be huge, since other nations negotiate prices with drug manufacturers.

Take Canadian MedStore. It sells a 90-day supply of Januvia for $83, imported from England. The same supply of the diabetes drug can cost $423 in the U.S. Advair Diskus, to treat asthma and chronic obstructive pulmonary disease, costs $417 in the U.S., compared with $96 from New Zealand via MedStore. Xarelto, a  popular blood thinner, costs $89 per month imported from England, vs. $485 a month in the U.S.

Cities and counties that facilitate online ordering from overseas often do so on the advice of their insurance brokers. Schenectady County has worked with CanaRx for over a decade to allow employees to buy drugs overseas, saving more than $10 million during that period, with no complaints. The few times drugs were confiscated at an international mail-processing facility by customs officials, CanaRx merely re-sent the shipment.

"It helps us keep our tax rate down and helps us give cost-of-living increases to employees," said Chris Gardner, a county attorney who helped start the program.

Kaiser Health News (KHN),  a national health policy news service, is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.