Turning 65 came with a startling realization for Lyn Stein: One of the medications she takes to treat fibromyalgia that used to be covered by her insurance would cost $650 for a three-month supply under Medicare.
Stein’s doctor prescribed the drug, Strattera, off-label to improve concentration issues associated with fibromyalgia, but Medicare wouldn’t cover it because the drug is intended to treat attention deficit disorder.
And with no generic alternatives, Stein, now 71, felt trapped, on her own to pay for the drug out of pocket.
Then she found an escape hatch: She could order the brand-name drug from Canada for a fraction of the U.S. price. What’s more, there was a generic option that would cost just $99 for a three-month supply.
Prescription drugs are notoriously more expensive in the United States than other high-income countries, such as Canada, the United Kingdom, and Australia. Less known is that in many cases, Americans are paying top dollar for a brand-name medication for which a generic exists — just not here.
“I was very pissed off,” said Stein, of Cherry Hill, recalling her discovery six years ago. “Granted, it takes [drug companies] a long time to get medications approved, but it costs patients a lot of money — more money than need be.”
Drug costs have come under fire in recent years, as prices outpace wages and inflation. Per-person drug spending shot up 45 percent from 2005 to 2015, to an average of $1,000 for each adult and child in the U.S., according to research by the Commonwealth Fund, a nonprofit that researches health-care issues, a nonprofit that researches health-care issues. At the same time, with insurance coverage growing skimpier, patients are paying a greater share of drug costs out of pocket, and are increasingly skipping or stretching medications because they can’t pay.
Medicare beneficiaries face an added burden, because Congress has banned the program from negotiating drug prices, though Americans of both parties say they want that to change.
“The march toward increasing prices has gone on for a long time and it’s kind of at a breaking point,” said Shawn Bishop, a vice president with the Commonwealth Fund.
The Trump administration has floated the ideas of requiring drug companies to include prices in television commercials touting medications, and possibly allowing Medicare to negotiate directly with manufacturers for a better deal, which would require a change in the law.
The cost of prescription drugs is one of the few health-care topics on which analysts have said a split Congress may be able to find common ground. The House Committee on Oversight Reform announced in January a “wide-ranging” investigation into drug pricing and pharmacy practices. The first hearing is scheduled for Jan. 24.
“Research and development efforts on groundbreaking medications have made immeasurable contributions to the health of Americans ... but the ongoing escalation of prices by drug companies is unsustainable,” Rep. Elijah Cummings (D., Md.), the committee’s chair, said in a statement announcing the investigation.
In the meantime, patients priced out of their local pharmacy are taking matters into their own hands.
Jules Enatsky, a retired health-care consultant, recently paid $77 for a tube of rosacea medication. The price seemed high, but he’s hopeful the cream will calm his skin redness and he won’t need to refill the prescription.
If he does need a refill, though, he’s looking elsewhere.
The 66-year-old Jenkintown resident could get the same 60-gram tube through an online pharmacy in Canada for $29.
“I don’t understand why the pharmaceutical companies are able to stack the deck against us here in the States. That’s what doesn’t make sense to me — they’re not doing the same things overseas,” Enatsky said.
A spokesperson for the Pharmaceutical Research and Manufacturers of America said the trade association representing drug-makers supports efforts to improve generic drug development.
“Ensuring patients have access to needed medicines is absolutely critical," Nick McGee, a PhRMA spokesperson, said in a statement. "The FDA has taken meaningful steps in the right direction by streamlining and expediting the generic drug approval process, promoting more high-quality generic applications, and publishing lists of off-patent, off-exclusivity medicines without approved generics.”
The U.S. relies on market competition from new generics to drive down brand-name prices. But generics can be slow to come to the U.S., in part because patents that allow manufacturers monopoly pricing last longer here than in other countries.
“The U.S. has the strictest pharmacy patent laws, so it’s not surprising drugs are going off patent in other countries first,” said Gabriel Levitt, president of PharmacyChecker.com, a website that vets international pharmacies for American consumers.
But availability of generics is about more than patents, Bishop said.
Generic medications account for about 84 percent of all prescriptions filled in the U.S. But a small number of prescription drug wholesalers, which serve as middlemen between drug manufacturers and pharmacies, have significant power to push patients toward specific generic drugs. They decide which medications to supply to pharmacies and at what price.
Even if several generic versions of a medication exist, a wholesaler can direct its volume to as few as one of those generic options, which is a risk manufacturers must consider.
“Our generic market has some fault lines that need to be thought through," Bishop said. "We have a robust generics market, but in some cases the consolidation in wholesalers and supply chain has forced volume to a few generic providers. It’s creating manufacturing viability issues in our market for some generic drugs.”
What’s more, developing a copycat drug can be difficult, and the regulatory approval process is lengthy.
The U.S. patents for the brand-name asthma inhaler Advair Diskus, for example, expired years ago, but a generic has yet to be introduced — federal regulators have yet to approve any of the options being developed by generic manufacturers.
The cash price for three inhalers would be $1,413, on average, in the U.S. You could get the same three inhalers for $384 in Canada. Or for just $59, you could buy three generic versions of Advair through an online international pharmacy, according to data compiled by PharmacyChecker.
A 90-day supply of Januvia, a diabetes medication for which there is not yet a domestic generic alternative, costs $1,574 in the U.S. The same amount of a generic sold through online international pharmacies costs $180.
“Fifteen years ago when we started PharmacyChecker, the headline was often that you could get the same drug at 50 percent off in Canada. Now it’s more like 80 to 90 percent on many drugs. It’s actually insane,” Levitt said.
The U.S. Food and Drug Administration prohibits importation of prescription medication but does not enforce the law for individuals buying small amounts of drugs for personal use.
Online international pharmacies have made drugs sold in foreign countries more accessible, but Levitt warns consumers to shop cautiously. Use only pharmacies that require a prescription and that are certified in their home country. PharmacyChecker connects users to such pharmacies, though none are approved by the FDA.
Before turning to an online international pharmacy, look first for a lower-cost generic in the U.S. If the medication isn’t covered by your insurance plan or you have a high deductible, it may be cheaper to pay cash. Websites such as GoodRx can help you compare cash prices between pharmacies, often using coupons available online.
Drug manufacturers often offer discount programs or coupons for people with private insurance, especially for their most expensive drugs.
Since Stein began ordering her medication from Canada, a generic version of Strattera has become available in the U.S.