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Refill at the Global Pharmacy?

July 7, 2022

Mid-July 2022

As drug prices climb, some countries look outside their borders for more affordable access to essential medicines.

Mary Ellen Schneider

Mary Ellen Schneider is a medical journalist based in Setauket, New York.

When hospital pharmacists in Germany order drugs, they may choose to buy medicines manufactured and sold in Germany or the same drugs that have been reimported from Greece or Belgium, where prices are lower. Pharmacists are not only allowed, but required, by the German government to source some medications from other countries if they can save money.

“The system has seen exploding health care costs, mainly driven by oncology and hematology therapies,” said Ari Giagounidis, MD, a hematologist at Marien Hospital in Düsseldorf, Germany, and associate editor of ASH Clinical News.

Faced with those rising costs for Germany’s national health system, the government started looking elsewhere in Europe to access drugs at a lower cost. Under a law enacted more than 20 years ago, pharmacists can purchase a drug from another European Union (EU) country that was originally produced in Germany, called “reimportation,” or purchase a drug manufactured and sold in another EU country, called “parallel import.”

Since Germany is one of the highest-income countries in Europe, its drug prices can be 40-50% higher than its neighbors in Greece, for instance. For hematology-oncology drugs, that price difference can result in a significant cost savings to the health system.

“You have the same drug, but you have a different price tag,” Dr. Giagounidis said.

The importation of drugs in Germany has proven to be an effective cost-savings strategy and has not resulted in safety issues, Dr. Giagounidis said. The practice, which is managed in large part by pharmacists, is generally invisible to physicians and patients and does not delay care, he added.

The price tag for hematology-oncology treatments can be significant, and the market is on the rise globally. The market research firm ReportLinker estimated that the global hematology drug market would grow from about $33 billion in 2021 to $36 billion in 2022, reaching $49 billion in 2026. The market for blood cancer drugs is expected to increase from nearly $55 billion in 2021 to $61 billion in 2022, reaching nearly $90 billion in 2026.1,2

ASH Clinical News spoke with Dr. Giagounidis and other experts about the global pharmaceuticals market, how it affects hematology practice, and what it means for practicing clinicians.

Global Access Disparities

Despite the globalization of most consumer goods, prescription medications have generally been segmented, with varied costs and access depending on location. That leaves patients, who face either high costs or a lack of access, hunting across the globe for necessary therapies. Patients in Russia may seek out newer medications in Turkey, while patients in Mexico have imported drugs from India or South America in search of lower costs.

David Gómez-Almaguer, MD, head of hematology at Monterrey University Hospital in Mexico, said access to drugs in his country can be complicated. They experience sporadic shortages in critical medicines such as vincristine and cyclophosphamide, while other drugs, like inotuzumab, are completely unavailable in the country. Because it is legal for patients to buy medication in other countries for personal use, about 10-15% of hematology-oncology drugs come to Mexico from other countries, Dr. Gómez-Almaguer estimated. “It’s very common to get drugs abroad,” he said.

Dr. Gómez-Almaguer noted that, by and large, the ability to access medicines abroad has been positive for patients, but the burden falls on physicians to examine the drugs and assess whether they are safe and of good quality.

ASH Clinical News Associate Editor Sandra Kurtin, PhD, ANP-C, AOCN, who is a hematology-​oncology nurse practitioner, assistant professor of clinical medicine, and adjunct clinical assistant professor of nursing at the University of Arizona, recalled a teaching trip she took to Russia, where she saw clinic storage areas with drugs labeled for patients who had traveled outside of Russia to obtain medications they could not get there. Dr. Kurtin noted it was not uncommon for patients with adequate financial resources to seek access to newer treatments outside the country.

Compared to Germany, where the national health system drives the push to import drugs from other countries, individual patients in many places are the ones seeking out therapies wherever they can find them, Dr. Kurtin explained. “It’s really a patient-driven process,” she said.

That was the case for Blerina Ahmetaj-Shala, PhD, a research fellow at Imperial College in London, who reached out to the global patient advocacy group MDS Alliance when her father-in-law, Gani Shala, was diagnosed with myelodysplastic syndrome RAEB-2 with 25% blasts. The group confirmed that the treatment recommended by Mr. Shala’s doctors in Kosovo – several courses of azacitidine – was in line with the advice of experts in the U.K. and France. The MDS Alliance also contacted Celgene to find out who distributed azacitidine in the region, returning information about a clinician in Macedonia who could provide the recommended treatment. But identifying the right treatment was just the first step.

“Azacitidine cannot be purchased directly from hospitals in Kosovo, and as a citizen it is up to the patient to secure the drugs,” Dr. Ahmetaj-Shala wrote on the MDS Alliance website. “This has been very challenging. The first two courses we were able to obtain from the hospital in Macedonia at a cost of just over 4,000 euros/course. After the second course, we realized that purchasing azacitidine at that price was not going to be financially viable for us, especially considering that the average salary in Kosovo is 400 euros.”

Dr. Kurtin, who serves on the board of the MDS Foundation and on the MDS Alliance Steering Committee, said it often falls to patient advocacy organizations to try to connect patients with physicians and companies so they can obtain essential medications globally. For some patients, it means traveling to a neighboring country or visiting a center of excellence in the U.S. However, for patients in many smaller countries or countries with limited health care infrastructure, there is no nearby or affordable way to access new medications. While the circumstances that create these therapy deserts are complex, it often boils down to a lack of drug manufacturing in the region or a local accrediting body to approve drugs, Dr. Kurtin said.

Cost Is the Driver

In most countries where the national health authority or individual patients seek drugs from other places, high costs are the driver. That is certainly the case in the U.S., which has the world’s highest prescription drug prices and faces the highest price for cancer treatments.

Prescription drug prices overall, including both branded and generic drugs, are 256% higher in the U.S. than in 32 comparator countries, according to a report from the Rand Institute that used 2018 prices. That gap shrunk to 190% after adjusting U.S. prices downward to account for rebates and other discounts.3 When looking specifically at the cost of cancer drugs, researchers have found that monthly drug treatment costs in the U.S. are more than twice as high as costs in high-income European countries, including England, Switzerland, Germany, and France.4

In the U.S., the high cost of prescription drugs can lead to financial toxicity and the potential for missed doses. A poll conducted in June 2021 by Gallup and West Health showed that 7% of U.S. adults, representing an estimated 18 million Americans, could not afford to pay for at least one prescription medication in the previous three months. This figure rose to 11% among respondents with three or more chronic conditions. Additionally, about 10% of respondents reported skipping medication doses in the prior year to save money.5

This financial toxicity, and the large price gap between the U.S. and other countries, are factors that have been driving the U.S. conversation around the importation of drugs. Public opinion favors drug importation from other countries as a tool to lower costs, with 78% of U.S. adults saying they support proposals allowing Americans to buy prescription drugs imported from licensed Canadian pharmacies.6 However, there has been little movement to begin large-scale importation of foreign drugs to the U.S. despite decades of debate.

U.S. Rules Versus Reality

In most cases, it is illegal for individuals to import prescription drugs into the U.S. since some drugs that are available in other countries have not been approved by the U.S. Food and Drug Administration (FDA). However, the FDA has a policy of allowing non–FDA-approved personal drug imports if the drug is for a serious condition without an effective treatment available in the U.S. and the drug poses no significant health risk.7

“Current law directs the FDA to exercise discretion in permitting personal importation,” said Meredith Freed, senior policy analyst with the Kaiser Family Foundation’s Program on Medicare Policy.

Drug manufacturers can legally import drugs into the U.S. under a few conditions: that they have been FDA approved, were manufactured in an FDA-inspected foreign facility, and are intended for U.S. consumers. They can also reimport drugs that were approved and manufactured in the U.S. and sent abroad if it is for emergency medical purposes or a result of product recalls.

In 2000, Congress passed the Medicine Equity and Drug Safety (MEDS) Act that allows pharmacists and wholesalers to import FDA-approved drugs from other countries subject to certification by the Secretary of Health and Human Services (HHS) that importation was safe and resulted in significant cost savings. That provision was amended in 2003 as part of the Medicare Modernization Act (MMA) to limit importation to prescription drugs from Canada. No importation programs have been approved under these provisions.8

There has been movement to allow individual states to import drugs from Canada under the legal authority of the MEDS Act and the MMA. In 2020, the Trump administration issued a regulation that outlined pathways for states, pharmacists, and wholesalers to import drugs from outside the U.S. if they could show that they posed no additional risk to public health and safety and that the importation program would result in a “significant reduction” in costs to U.S. consumers. To be eligible for this program, the drug would need to be approved by Health Canada’s Health Products and Food Branch and meet the conditions of an FDA-approved new drug application or abbreviated new drug application.9

That regulation is being challenged in the federal court system by the Pharmaceutical Researchers and Manufacturers of America (PhRMA), but no legal decisions had been reached as of late May 2022. In the meantime, the Biden administration has signaled its support for state drug importation programs and other measures to curb drug costs, such as negotiating prices through Medicare.10

Several states have passed laws to begin drug importation, but only a few – Florida, Vermont, Colorado, Maine, and New Mexico – have formally submitted plans to the FDA. “Florida is the furthest along in submitting plans to the FDA to import drugs from Canada, but to date the FDA hasn’t approved any of these importation plans, so no states are actually importing drugs that way,” Ms. Freed said.

Even if states take advantage of this pathway, there are exclusions. Importation programs are not allowed to bring in controlled substances, biologic products, infused drugs, or intravenously injected drugs, among others. Drugs also cannot be imported if they have an FDA-mandated risk evaluation and mitigation strategy (REMS).8

While these state-based plans are the furthest along and have had support from the Biden administration, there are obstacles to their implementation. “The Canadian government in particular has indicated that it might be challenging for the U.S. to import drugs on a large scale from them, particularly because they are concerned about drug shortages,” Ms. Freed said.

It is also unknown whether these state proposals could clear the threshold of achieving significant cost reductions for American consumers. “The Trump administration wasn’t able to provide an estimate of potential savings, for various reasons,” Ms. Freed said. “I think that despite all the research that shows that the cost of drugs is much lower in Canada, if states were able to implement these plans, it is not clear how much that would actually save consumers.”

Mariana Socal, MD, PhD, an associate scientist at the Johns Hopkins Bloomberg School of Public Health in Baltimore, has studied drug cost issues around the world. Based on her studies, she is skeptical about the large-scale effectiveness of proposed drug importation programs in the U.S.

“The main reason it is so expensive is the revenue structure of the supply chain participants in the U.S. – pharmacies, wholesalers, and pharmacy benefit managers – that are all allowed to make a profit off of the drug price,” Dr. Socal said. “If there’s a profit to be made off of a more expensive product, the price will go up. Importation makes some sense in bringing down costs, but it doesn’t resolve all the issues.”

While countries like Germany have seen success in allowing parallel imports from other E.U. nations, that situation is fundamentally different from the U.S.-Canadian situation, Dr. Socal said, because medicines sold in E.U. countries are approved by the same governmental body, the European Medicines Agency, while the U.S. and Canada each have their own drug approval agencies that consider different factors.

“As a researcher, I would rather see us harness the awareness and knowledge that there are lower prices elsewhere. Why import a drug if I can import the know-how to negotiate the price? Why do we want to bring in risks when we can bring in the lesson and try to do something similar to lower the prices?” Dr. Socal said.

Negotiating Drug Prices and Other Policy Options

The price differential between the U.S. and other countries receives a lot of attention. But Dr. Socal said the more interesting piece of the drug pricing puzzle is that over time prices for individual drugs climb in the U.S., while in other countries the price goes down. That phenomenon is related to rules in other countries that require drug manufacturers to demonstrate value over other products to stay on the market and to lower prices as they gain market share through additional indications.

Dr. Socal and her colleagues evaluated price differentials for drugs sold in the U.S., the U.K., Japan, and Canada for single-source, brand-name drugs that had been on the market for at least three years. They found that the longer a drug was on the market in the U.S., the wider the price gap with other nations. In therapeutic areas that had at least five drugs in all countries studied, diabetes medications had the biggest average price differential, followed by antithrombotic agents.11

Dr. Giagounidis said the German health authority has been focused on using multiple levers to stabilize drug prices, with drug importation as one piece and price negotiation and value-based pricing rules as another piece of the strategy. “These strategies have reduced drug costs significantly, and the pharmaceutical companies are still making money,” he said. “Costs are still in the top three in the world in Germany, but it has come down.”

Meanwhile, Canada uses both price negotiation and value-based evaluation to keep drug prices comparatively low. Matthew Cheung, MD, a hematologist at Sunnybrook Odette Cancer Centre in Toronto, is a member of the pan-Canadian Oncology Drug Review Executive Committee, which is responsible for recommending cancer drugs for coverage. As part of that process, the committee considers not only clinical benefits, such as improved survival, but also quality of life, patient need, cost effectiveness (expressed as cost per quality-adjusted life year), and whether the treatment can be implemented throughout the country.

“The process is transparent, fair, and strives to be equitable, but it can be long,” Dr. Cheung said. It can take one to two years longer, on average, for a cancer drug to become available in Canada than in the U.S., he added.

There are several unique factors that differentiate the U.S. from other high-income countries with lower prescription drug costs, but the crux of the issue is that the U.S. lacks a national health authority that is empowered to negotiate drug prices with pharmaceutical companies and to set those prices based on the value provided by the medicine, said S. Vincent Rajkumar, MD, a hematologist and professor of medicine at Mayo Clinic in Minnesota.

In the U.S., the Medicare program is barred from negotiating drug prices, so any drug that is approved and provides clinical benefit must be covered for Americans ages 65 and older. Typically, private health insurance companies follow suit, covering drugs at the same price accepted by Medicare.

“Somebody could charge a very high dollar amount for a new cancer drug that prolongs life by three weeks and still get away with it because the price is whatever they feel like setting,” Dr. Rajkumar said. “As a consequence, every cancer drug approved since 2017 has been priced at more than $100,000 a year.”

Another unique element is that patients in the U.S. are somewhat insulated from drug price increases through patient assistance programs that keep out-of-pocket costs stable even as the overall drug price rises, he added. While helping individual patients, these strategies have negative effects on the system as a whole and result in increased premiums.

“That allows the pharmaceutical companies to casually increase prices every year because the constituents who would be affected are, in effect, silenced,” Dr. Rajkumar said.

Finally, there are incentives built into the system that encourage the prescribing and dispensing of more expensive medications because pharmacy benefit managers profit from higher-priced drugs, and physicians are paid based on a percentage of the cost for physician-administered drugs.

Dr. Rajkumar said the U.S. could begin chipping away at high costs by creating a panel to determine a reasonable value-based price that could serve as a starting point for Medicare to negotiate with pharmaceutical companies. Additionally, greater transparency around drug rebates and patient assistance programs could help patients to understand the true cost of prescription drugs and how they affect the system. Finally, he suggested that physicians should receive a fixed and reasonable payment for physician-administered drugs to remove any incentives for prescribing based on costs.

Said Dr. Rajkumar, “Incentives to do the wrong thing should be removed so we can have a fair system.”

References

  1. Hematology drugs global market report 2022. March 2022. Accessed May 26, 2022. https://www.reportlinker.com/p06241974/Hematology-Drugs-Global-Market-Report.html.
  2. Blood Cancer Drugs Global Market Report 2022. March 2022. Accessed May 26, 2022. https://www.reportlinker.com/p06245027/Blood-Cancer-Drugs-Global-Market-Report.html.
  3. Mulcahy AW, Whaley CM, Gizaw M, et al. International prescription drug price comparisons: current empirical estimates and comparisons with previous studies. Santa Monica, California: RAND Corporation; 2021.
  4. Vokinger KN, Hwang TJ, Grischott T, et al. Prices and clinical benefit of cancer drugs in the USA and Europe: a cost-benefit analysis. Lancet Oncol. 2020;21(5):664-670.
  5. Witters D. In U.S., an estimated 18 million can’t pay for needed drugs. September 21, 2021. Accessed May 26, 2022. https://news.gallup.com/poll/354833/estimated-million-pay-needed-drugs.aspx.
  6. Lopes L, Hamel L, Kearney A, Brodie M. KFF health tracking poll – October 2019: health care in the Democratic debates, Congress, and the courts. October 15, 2019. Accessed May 26, 2022. https://www.kff.org/health-reform/poll-finding/kff-health-tracking-poll-october-2019.
  7. S. Food and Drug Administration. Personal Importation. November 10, 2020. Accessed May 26, 2022. https://www.fda.gov/industry/import-basics/personal-importation.
  8. Freed M, Neuman T, Cubanski J. 10 FAQs on prescription drug importation. Kaiser Family Foundation. July 28, 2021. Accessed May 26, 2022. https://www.kff.org/medicare/issue-brief/10-faqs-on-prescription-drug-importation.
  9. Food and Drug Administration. Final Rule. Importation of Prescription Drugs. October 1, 2020. Accessed May 26, 2022. https://www.regulations.gov/document/FDA-2019-N-5711-1252.
  10. Executive Order 14036. Promoting competition in the American economy. July 14, 2021. Accessed May 26, 2022. https://www.federalregister.gov/documents/2021/07/14/2021-15069/promoting-competition-in-the-american-economy.
  11. Kang SY, DiStefano MJ, Socal MP, Anderson GF. Using external reference pricing in Medicare Part D to reduce drug price differentials with other countries. Health Aff (Millwood). 2019;38(5):804-811.

Patient Assistance for High-Cost Hematology Drugs

When patients face financial toxicity as a result of their high-cost specialty drug treatment, hematologists may struggle with finding patient resources. The American Society of Hematology (ASH) compiled a list of private foundations and patient assistance programs that offer copayment or coinsurance assistance for brand-name drugs, which can be found at hematology.org/education/clinicians/drug-resources/high-cost-hematologic-drug-access.

The list is organized by treatment type and includes details on eligibility and enrollment for patients. For example, for patients seeking brand-name lenalidomide, there is information on Celgene’s access program, as well as three foundations offering patient assistance for this medication.

The ASH list does not include physician-administered drugs since the U.S. Department of Health and Human Services (HHS) bars pharmaceutical manufacturer programs from assisting with these drugs under Medicare Part B or with prescription drugs that are covered under Medicare Part D.

Patient advocacy groups such as the Leukemia & Lymphoma Society offer financial assistance to patients that may cover copays, travel assistance, and some non-medical expenses depending on patient eligibility. There are also websites like NeedyMeds that direct patients toward rebates or other discounts on both brand-name and generic drugs.

ASH has also compiled sample appeal letters that hematologists can use when justifying patient coverage for a specialty tier drug. The current templates include appeals for imatinib, interferon, lenalidomide, peginterferon alfa-2a, and rituximab.

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