Shopping for Drugs: 2007

Policy Reports | Health

No. 293
Thursday, November 16, 2006
by Devon Herrick, Ph.D.

Buying Drugs Abroad

Some consumers have turned to foreign Internet pharmacies, mostly based in Canada, to lower their drug bills.162  However, due to problems consumers may encounter in purchasing drugs from out-of-country Web sites, these purchases may not be a bargain.  Furthermore, it is illegal to do so since federal law prohibits anyone except the original manufacturer from importing pharmaceuticals.   

"Drugs are not always cheaper in Canada."

Problem: Many Drugs Aren't Cheaper in Canada.  Pundits claim that drugs are cheaper in Canada.  However, this is true only for branded drugs still under patent protection.  Generic medications - the ones that represent the best value for most patients - tend to be cheaper in the United States than in Canada.163 

Problem: Drugs May Be Confiscated.  Under the Prescription Drug Marketing Act of 1988, only drug manufacturers can legally import large quantities of drugs into the United States from foreign countries.  Travelers with a prescription can return to the United States with a 90-day supply of legal pharmaceuticals.  Several attempts have been made to change laws to legalize drug importation.  Proposed legislation would not merely make it legal for patients to order medications from Canada - it would allow large-scale importation by pharmacies, drug wholesalers and distributors.  However, even though it is technically illegal, the U.S. Customs Service recently reversed its policy of confiscating small drug shipments being shipped to U.S. citizens for personal use.164

Currently, however, large quantities of prescription drugs brought back by travelers from abroad are subject to confiscation.  Drugs from overseas pharmacies shipped through the mail are subject to confiscation by postal inspectors.  

"Some foreign Web sites sell fake, expired or adulterated drugs."

Problem: Seller Misrepresentation.  Consumers who think they are buying from Internet pharmacies in Canada may actually be buying from the Web sites of substandard pharmacies in less-developed nations.  A study in the Annals of Internal Medicine found that only about 11 percent of Internet pharmacies revealed the actual location of their business.165  It is very difficult to ascertain the exact location of online pharmacies.  Internet addresses indicating the country of origin are often falsified.166  For instance, many Web sites registered as Canadian pharmacies are far from Canada.  The Web site appears to be a Canadian pharmacy, but the name is registered to an address in Mexico City.  Another Web site, was registered in Barbados.167  Many others have covered their tracks so well it is impossible to tell where they are located.  A more recent study found about one-third of Internet pharmacies claiming to be Canadian were located elsewhere.168 

Problem: Drug Safety and Efficacy.  Another problem is that not all drugs sold on Canadian Web sites come from developed nations with FDA-type safeguards.  One Canadian Web site was selling drugs made in Mexico.169  In fact, according to Marv Shepherd, director of the Center for Pharmacoeconomic Studies at the University of Texas at Austin, Canada obtains drugs "from over 100 countries including Ecuador, Mexico, Brazil and China."170 

An article in Science illustrates how drugs manufactured in some countries may not be of the same quality as those made domestically.  The drug Zocor (Simvastatin), a powerful cholesterol-lowering drug made in the United States, was compared to generic copies purchased over the Internet from Mexico, Thailand, India and Brazil.  Analysis of the imported versions showed that the active ingredients were not uniformly mixed with inert fillers in the tablets.  These lumps may not be absorbed into the bloodstream at the same rate, affecting the efficacy of the medication.171  Furthermore, due to this lumping, consumers who split tablets would not receive a consistent dose, making the medication less effective.  About two-thirds of countries in which drugs are manufactured either do not have or do not enforce regulatory controls comparable to the United States.  And about half the countries that have controls lack the ability to enforce them.172  Consequently, officials say it is impossible for the FDA to vouch for the safety and authenticity of drugs shipped from abroad.173 

Problem: Counterfeit Drugs.  The 1988 law that restricted drug imports was passed in response to smuggled counterfeit drugs that found their way onto some U.S. pharmacy shelves.174   In one case, U.S. customs inspectors seized 1,800 counterfeit bottles of the antibiotic Ceclor.  In another case, about two million counterfeit birth control pills containing little or no active ingredient were smuggled into the United States.

Counterfeit and fake drugs are a growing problem.175  Global sales of counterfeit drugs are predicted to reach $75 billion by 2010.176  As more people order drugs from unknown Web sites abroad, this is likely to increase.  Recently, for example:

  • Several Web sites were found to be selling contraceptive patches containing no active ingredients.177 
  • When the U.S. Government Accountability Office made straw purchases from 68 Web-based pharmacies, in four cases it received counterfeit drugs and in six cases never received the order for which it paid.178
  • Fourteen Web sites from which the GAO made purchases were under investigation for selling counterfeit drugs.179

"Drug price controls limit foreign supplies."

Over the past few years, the number of counterfeit drug cases investigated by the FDA has risen four-fold.180  As more Americans turn to foreign sources for prescription medications, the market in counterfeit drugs is bound to grow.  And of course, drugs obtained out of the country at low prices are not bargains if they jeopardize the patients' health.

Problem: Drug Availability.  Some brand-name drugs are cheaper in other countries because prices are controlled.  Due to price controls, there may be only a limited supply available.  In fact, in some countries, if a new, more effective (and expensive) medication has not been added to the list of drugs the government will pay for, it may not be available to most patients in that country.  As a result, drug distributors may stock few of these medications, or they are simply unavailable.  At just under $25 billion dollars, prescription drug expenditures in Canada are only a fraction of spending in the United States.181  The United States is simply too populous for Canada to fulfill all our drug needs.182  Consider:

  • Americans could exhaust the entire supply of Canadian drugs in just 38 days.
  • Canada would need to boost its supply of drugs by a factor of five just to meet the needs of elderly Americans.

American-manufactured drugs are sold in some other national markets at lower prices to compensate for lower average incomes in those countries.  Pharmaceutical companies are financially able to do so because they can recoup the cost of drug development in the United States.  Importation would tend to equalize drug prices worldwide - at a level much closer to, if not the same as, current prices found in the United States.  Less prosperous countries would buy fewer American-made drugs.  They could also follow India's lead by violating patents and producing low-priced copies for their own citizens.

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