Dr. Goldberg is Director of Skin Laser & Surgery Specialists of New York and New Jersey, Director of Mohs Surgery and laser research, Mt. Sinai School of Medicine, and Adjunct Professor of Law, Fordham Law School.
In this month's Legal Eagle column, David J. Goldberg, M.D., J.D. discusses a scenario in which a physician tries to provide a better treatment option at a lower cost for his underinsured patients by importing medication from another country, but is reprimanded by the FDA. Find out why.
Dr. Rash is well-versed on the newer biologics used for psoriasis. In fact, he has conducted several of the well-respected clinical trials, and he lectures extensively on these agents at national meetings. Although many of his poorer patients would benefit from the use of biologics, they have little-to-no insurance and cannot afford to purchase them.
Dr. Rash is aware that some states, including his, have taken initiatives to import medications form Canada. But he can get the identical brand name drugs even cheaper from India. He intends to provide the drugs to his patients at no charge, and his patients are eternally grateful.
One of these patients is so happy that he sends a letter to the local newspaper applauding the efforts of his physician. The article, written by a local reporter, is picked up by the national press and covered in the national news.
Three days later FDA agents show up at Dr. Rash’s door threatening him with both civil and criminal penalties. What is the basis? He was only trying to save his patients money. Did Dr. Rash do anything wrong?
What is clear is that prescription drug expenditures are one of the fastest growing segments of the United States healthcare system. Over the last several decades, prescription drug spending has increased dramatically, whereas other components of the healthcare system, such as hospital care and physician services, have risen less.
Several factors have led to this tremendous increase in expenditures.
First, prescription drug utilization per capita has grown dramatically because of the aging population. In addition, older, less expensive drugs are being replaced by new, high-priced drugs. Finally, many manufacturers have increased the prices of drugs already on the market. With this increase in the cost of prescription prices, many consumers may be forced to choose between purchasing basic necessities and filling their required psoriatic treatment prescriptions.
The reason prescription prices in the United States are, at times, more expensive than the prices for “identical” medications from other countries is clear: The United States costs remain high because of current patent protection coupled with the unregulated free market system.
The cost for these medications is governed by the laws of supply and demand. Since there is no price ceiling for many of the currently required drugs in the United States, (such as is in place in Canada), prices remain quite high. Thus, there is the inevitable desire to import the drugs from abroad where the cost of such pharmaceuticals may be less.
In all fairness, the pharmaceutical industry maintains that the reasons behind the high prices of American drugs are the cost of the research and development needed for new break-through drugs. In 1993, the pharmaceutical industry spent $12.7 billion on research and development. A decade later this figure more than doubled to over $33.2 billion. It continues to increase.
With all this said, there is still a natural desire to get the same medications available to our patients from a cheaper source. Dr. Rash turned to India. Other physicians have turned to Canada, Europe and South America. Whatever the source, and despite his admirable intent, Dr. Rash’s actions are illegal.
FDA regulations prohibit the re-importation of exported prescription drugs manufactured in the United States by anyone but the actual U.S. manufacturer. In part, the justification for such laws lies with Congress’ intent to ensure the safety and efficacy of the prescription drugs.
The FDA cannot vouch for the safety of a product once it is sent to another country; it becomes out of the FDA’s control. There are both civil and criminal consequences for Dr. Rash if he continues this approach. He would be advised to discontinue his actions.