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Cities, Counties and Schools Sidestep FDA Canadian Drug Crackdown, Saving Millions

Schenectady County, N.Y., is on monitor to pay 20 p.c much less on prescribed drugs for its staff this yr than in 2003.

Flagler County, Fla., expects to avoid wasting almost $200,000 in 2017 on brand-name medicines for its 800 staff, its whole drug prices having fallen by 10 p.c since final yr.

Kokomo, Ind., has discovered a option to save a lot cash shopping for medication that it gives staff a 90-day provide of dozens of standard brand-name medicines totally free.

While the nation grapples with hovering costs of medicine, dozens of cities, counties and faculty districts throughout the nation have quietly discovered an answer they are saying protects their budgets and saves staff cash: They are serving to their staff purchase medicines from pharmacies in Canada and abroad, the place costs are as much as 80 p.c cheaper.

“We adore it … it’s a win-win for us and our staff,“ mentioned Anita Stoker, advantages and wellness supervisor for Flagler County, on Florida’s northeastern coast, which in 2015 began providing its staff a program to get medication from pharmacies in Canada, England, Australia and New Zealand.

The numbers are rising, despite the fact that the U.S. Food and Drug Administration says the apply of importing prescribed drugs is illegitimate and is stepping up enforcement, with raids on shops that helped individuals order abroad, and even visiting some clients’ houses to gather proof of unlawful purchases.

So far, the FDA has made no transfer to close down these worker profit applications — a couple of courting again over a decade, however most far more moderen.

Asked about its view of the applications, an company spokeswoman mentioned: “The FDA doesn’t touch upon its compliance or enforcement technique relating to particular FDA-regulated merchandise. When non-compliance with FDA laws is discovered, the company might take, and has taken, a wide range of advisory, administrative and judicial actions relying on the violations recognized.”

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The FDA doesn’t prosecute customers shopping for medicines from international pharmacies for private use, though — if detected — such packages are intercepted on the border as contraband and their contents returned or destroyed.

But signaling it might be stepping up enforcement — at the least towards middlemen who facilitate the apply — the FDA in October raided 9 Central Florida storefronts that helped a largely senior inhabitants purchase medication from Canada and different nations. The shops don’t inventory any medicines however help customers in ordering medication from international pharmacies. Criminal investigators warned the store’s owners they had been working illegally and will face fines or jail time. They weren’t shut down.

Bill Hepscher, co-owner of Canadian MedStore, which owns six of the 9 storefronts visited by the FDA, defends his apply, saying he’s solely serving to customers do what the FDA says they will do with out concern of presidency prosecution. He mentioned it’s not truthful that his shops get focused for aiding customers whereas municipalities throughout the nation are doing the identical factor for his or her staff. This consists of the school district in Pasco County, the place Hepscher has one in every of his shops.

Bill Hepscher, co-owner of the Canadian MedStore, outdoors his Lakeland, Fla., location. Six of the 9 shops that federal brokers searched in October are owned by Canadian MedStore. (Phil Galewitz/KHN)

Congress has handed laws legalizing the importation of prescribed drugs a number of instances up to now 20 years, however each Democratic and Republican administrations have opted to not implement it. The FDA has mentioned reimporting medicines from outdoors the United States is harmful due to the chance that medicines are counterfeit, mislabeled or in any other case unsafe — a view vigorously supported by the business.

The pharmaceutical business applauded the current FDA raids. “We welcome the FDA’s action to crack down on drug importation schemes,” mentioned Holly Campbell, a spokeswoman for PhRMA.

But rising drug costs have given this reimportation concept new life — in Congress and in apply.

In hearings final week, Sen. Rand Paul (R-Ky.) mentioned he would oppose the nomination of Alex Azar, a former drug firm CEO, as head of Health and Human Services except Azar commits to implementing an importation plan. Told by Azar that the issue was guaranteeing security, Paul replied: “That’s b.s. The American people think it’s b.s. that you can’t buy drugs from Europe or from Canada or Mexico or other places.”

A rising variety of metropolis and county officers argue that their staff ought to have the choice to purchase inexpensive medication and that serving to them achieve this doesn’t violate any legal guidelines.

In current years, hundreds of thousands of Americans have pushed over the border to Canada and Mexico or used the web to purchase medicines from international pharmacies for private use.

A Kaiser Family Foundation poll in 2016 discovered that Eight p.c of respondents mentioned they or somebody of their family had imported a drug sooner or later, a determine that will translate to about 19 million adults within the U.S. primarily based on current Census population estimates.

In the early 2000s, a number of states, together with Maine and Illinois, briefly maintained web sites to assist residents purchase medication from Canada. The applications had been discontinued, amid opposition from federal authorities, the pharmaceutical business and GOP politicians. Now, cities, counties and faculty districts are stepping in.

Consumers want a physician’s prescription simply as they’d to purchase medication from their native pharmacy.

Drugs ordered from abroad usually include the identical packaging as within the U.S. CanaRx, primarily based in Windsor, Ontario, and ElectRx, primarily based in Detroit, says it vets the pharmacies (usually in Canada, England and Australia) to make sure clients get the true product. Counties, cities and faculties — in addition to a rising variety of personal firms — contract with one in every of these firms for on-line service.

These firms don’t promote to people. They promote solely a three-month provide of medication and don’t present medication which are obtainable as generics within the U.S.

The value financial savings for widespread medicines outdoors the U.S. could be big, since different nations negotiate costs with drug producers or enable cheaper generic equivalents to be bought extra quickly.

Take Canadian MedStore, for instance. It sells a 90-day provide of Januvia for $83, imported from England. The identical provide of the diabetes drug can value $423 within the U.S. An Advair Diskus, which fits for $417 within the U.S., MedStore will get from New Zealand and sells for $96. Xarelto, a preferred blood thinner, prices $89 per 30 days imported from England, versus $485 a month within the U.S.

Companies promoting medication from Canada and abroad say the FDA’s security considerations are unjustified. The current FDA raids on Hepscher’s Florida storefronts adopted a sting operation by which undercover brokers bought medicines from abroad — all of which proved in testing to include the elements matching the medicines ordered.

But FDA spokeswoman Lyndsay Meyer mentioned: “The ones that we found and tested may have been [safe], but that doesn’t mean that they all were. We do believe that it’s unsafe. You never know what you’re going to get or how they were stored — it’s a gamble. And importantly, it’s prohibited under federal law.”

Cities and counties that facilitate on-line ordering from abroad usually achieve this on the recommendation of their insurance coverage brokers. “In this day and age, when it’s common for employers to see a 20 or 30 percent annual increase in drug costs, we are seeing a negative drug trend in Flagler County — that’s unheard of,” mentioned Sherry Bugnet, an account govt with The Bailey Group, an insurance coverage dealer in St. Augustine, Fla.

Schenectady County, N.Y., has labored with CanaRx for over a decade to permit staff to purchase medication abroad, saving greater than $10 million throughout that interval, with no complaints; prescriptions contain no copay if the service is used. The few instances medication had been confiscated at a world mail-processing facility by customs officers, CanaRx merely re-sent the cargo.

“It helps us keep our tax rate down and helps us give cost-of-living increases to employees,” mentioned Chris Gardner, a county lawyer who helped begin this system, by means of which he has ordered medicines for ldl cholesterol and blood stress.

Since 2012, Kokomo, Ind., has let its staff get brand-name medication with no copayment in the event that they order from Canada and abroad by means of ElectRx. “Our employees like it, and it’s very simple and easy to use. Their doctor fills out a prescription, they send it in, and the medication goes right to their home,” mentioned Kathy Horton, director of human sources for the town, about 60 miles north of Indianapolis.

Encouraged by the successes in different components of Florida, Patricia Howard, senior supervisor for advantages and danger at Pasco County Schools, mentioned the county in July began providing the worldwide pharmacy choice to its 9,600 staff and dependents to purchase brand-name medication.

Employees pay zero for his or her first 90-day order, then $10 for every 90-day refill. About 75 staff have used this system.

Other components of Florida will quickly take part. Both the Palm Beach County Clerk & Comptroller and the town of Sarasota are set to unveil similar programs in January. ”I’ve no questions in regards to the legality, as that’s already been vetted,” mentioned April Bryan, the town’s basic supervisor of human sources.

Carmen Catizone, govt director of the National Association of Boards of Pharmacy, a nonprofit affiliation that promotes protected pharmacy practices, mentioned: “If cities and counties have done their due diligence to ensure their employees are getting drugs from reputable sources, then there is nothing wrong with it,” he mentioned. “If not, they could be playing Russian roulette.”

KHN’s protection of prescription drug improvement, prices and pricing is supported by the Laura and John Arnold Foundation.

Phil Galewitz: pgalewitz@kff.org”>pgalewitz@kff.org, @philgalewitz

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