How Soaring U.S. Drug Prices Fueled What Feds Call An Illegal Import Of Medications

Key Concepts

• Alternative Funding Programs (AFPs): Companies that facilitate the importation of prescription drugs from overseas to reduce costs for employers and patients.
• Personal Importation Policy: An FDA guideline that allows individuals to import a limited supply of medication for personal use under specific circumstances.
• FDA (Food and Drug Administration): The U.S. agency responsible for regulating the safety, efficacy, and quality of drugs.
• Counterfeit Drugs: Medications that are fake, contain incorrect ingredients, or lack active ingredients.
• Misbranded Drugs: Drugs that are falsely or misleadingly labeled.
• Unapproved Drugs: Medications that have not undergone FDA review and approval for sale in the U.S.
• Supply Chain Security: Measures taken to ensure the integrity and safety of drugs from manufacturing to patient delivery.
• Intellectual Property Rights: Legal rights granted to creators and owners of original works, including pharmaceutical patents.

The High Cost of Prescription Drugs and the Rise of AFPs

The United States faces a significant challenge with skyrocketing prescription drug prices, with some specialty medications costing tens or hundreds of thousands of dollars annually. This has led to a desperate search for solutions by patients and employers. In response, a growing industry of Alternative Funding Programs (AFPs) has emerged, positioning themselves as a way to access medications overseas for a fraction of the U.S. cost. These programs often target cash-strapped employers, such as school districts, counties, and unions, who lack traditional insurance and pay healthcare costs out-of-pocket. AFPs promise substantial savings by sourcing lower-cost drugs from abroad, making money through fees or a percentage of the savings, while patients receive the drugs for little to no cost.

Legality and Safety Concerns of AFP Drug Importation

Despite the perceived benefits, the core issue with AFPs is their operation is largely illegal and poses significant risks to patient safety. The FDA explicitly states that it is illegal to import drugs that are available and sold in the United States. AFPs often circumvent U.S. regulations by sourcing medications from countries like Turkey, India, Australia, and Canada. However, even when drugs are sourced from countries perceived as safe, such as Canada, there's no guarantee they truly originated there. Many AFP websites indicate they have international fulfillment centers, meaning medications could be shipped from various locations, including those with less stringent regulatory oversight.

Lori Mayall of Gilead Sciences emphasizes the danger, stating, "The most expensive medicine that they could get is one that isn't safe." Pharmaceuticals intended for other countries may not meet the rigorous safety standards of the United States, which include extensive testing and robust supply chain security.

How AFPs Operate and Evade Detection

Department of Homeland Security investigations have revealed that many AFPs fulfill prescriptions through unverified suppliers and potentially illicit online pharmacies. Crucially, these AFPs often do not import the drugs themselves. Instead, prescriptions are mailed directly to patients, bypassing U.S. customs and law enforcement detection. This lack of oversight means customs has no way of knowing how many prescriptions are reaching U.S. citizens, from where they originate, or if they come from verified sources.

Leigh Verbois, former director of the FDA's Office of Drug Security, Integrity and Response, unequivocally states that AFPs are importing misbranded and unapproved foreign drugs, which is illegal. She clarifies that the FDA's personal importation policy, which allows for limited importation of drugs not available domestically, does not cover the practices of AFPs when the drugs are approved and commercially available in the U.S. There is "no gray area" in such cases.

Case Study: Bruce Zimmerman and Price MDs

The case of Bruce Zimmerman, diagnosed with multiple sclerosis, illustrates the allure and potential risks of AFPs. He was offered an "optional program" by his employer through a Florida-based AFP called Price MDs. This program involved all-expense-paid trips to the Cayman Islands and Bahamas for patients to pick up their medications. Bruce and his wife, Becky, took multiple such trips between 2019 and 2021, receiving a three-month supply of Avonex, a medication retailing for over $2,100 per weekly dose.

Despite Bruce's belief that the medication was the same, Turkish customs data analyzed by investigators revealed that Price MDs had previously rerouted shipments of Avonex meant for one market and sold them through unauthorized channels. From 2020 to 2023, Avonex sourced in Germany passed through Turkey and was then sent to the Cayman Islands, Bahamas, Switzerland, or the U.S. Biogen, the manufacturer of Avonex, confirmed this route was not part of their authorized supply chain.

Patient Vulnerability and Contractual Loopholes

AFPs often target vulnerable populations, including those in lower-income jobs or organizations with limited health benefit budgets. These programs prey on the desperation of individuals who cannot afford their medications. Some AFP contracts attempt to shift liability to the patient, requiring them to agree that they have purchased medications internationally for personal use and that title passes to them upon shipment. This is seen as a scheme to avoid responsibility for potential issues. However, Homeland Security investigations view patients as victims and consider the AFP companies themselves as the criminals.

AFP Defenses and Regulatory Interpretations

AFP representatives, such as Joseph Morris, general counsel for CanaRX, argue that their operations are legal and that the FDA's personal importation policy is open to interpretation. They contend that "availability" should include affordability, and that if a drug is prohibitively expensive domestically, it is effectively unavailable. Morris also cites a law allowing the Department of Health and Human Services to grant waivers for drug importation on a case-by-case basis. CanaRX claims to assist consumers in exercising their right to personal importation and asserts high safety standards, with medications sourced from "tier one countries."

However, the FDA maintains that its personal importation policy does not cover the practices of AFPs when drugs are approved and available in the U.S. Documents show the FDA has seized medications from patients participating in these programs, deeming them misbranded, counterfeit, and not qualifying for personal importation.

Legal Actions and Ongoing Investigations

The U.S. Department of Homeland Security has launched criminal investigations into AFPs. Pharmaceutical companies like Gilead Sciences have filed lawsuits against companies involved in the illegal importation of their medications, seeking to block shipments. In June, a judge issued a preliminary injunction prohibiting parties from importing Gilead medications. CVS, the parent company of Meritain Health (a defendant in one lawsuit), stated it does not support programs for non-FDA approved medications sourced from outside the U.S.

Conclusion: A Broken System and Unacceptable Risks

The investigation highlights a broken healthcare system where sky-high prescription drug costs drive desperate patients and employers towards potentially illegal and unsafe solutions. While AFPs claim to provide a public service by offering access to affordable medications, their practices often involve importing unapproved, misbranded, or counterfeit drugs through unregulated supply chains. This puts American lives at risk, as the safety, effectiveness, and quality of these imported medications cannot be guaranteed. The consensus among regulators and pharmaceutical companies is that prioritizing cost over safety in prescription drug access is dangerous and unacceptable. The House Appropriations Committee has expressed deep concern and directed the FDA to strengthen oversight in this area. The fundamental question remains: at what cost are we willing to seek solutions to the prescription drug affordability crisis?