An O.C. couple do the math: Same drug is far cheaper in Canada
Bent and Henni Christensen consider themselves patriotic Americans and strong supporters of Medicare.
Nevertheless, the Huntington Beach couple buy most of their prescription drugs from an online Canadian pharmacy at prices much lower than in the United States.
Bent Christensen, 78, said he appreciates the savings and also the opportunity to save Medicare some money. “It’s not right,” he said, to stick the federal program with bloated drug costs.
It’s not, and it’s another reason, along with sky-high charges for treatment and medical devices, that U.S. healthcare prices are the highest in the world, typically running about twice what people are charged in other developed countries.
Prescription drugs are an especially fertile source of profits. Captive markets of sick people may have no choice but to pay whatever is charged by drug companies.
When Christensen and I spoke, he was particularly incensed about prices charged for Advair, a popular asthma medication required by his 77-year-old wife.
In January, the biggest manager of prescription drug benefits for insurers and drugstores, a company called Express Scripts, said it would no longer reimburse Advair purchases because the drug had become too expensive.
U.S. sales of Advair subsequently tumbled 19%, and the Christensens had every reason to think Advair’s manufacturer, the pharmaceutical giant GlaxoSmithKline, would cut prices to keep users from switching to cheaper pills.
Instead, the price of Advair kept going up.
This week, Express Scripts said it had cut a new deal with Glaxo and would start reimbursing Advair purchases again next year. It’s unclear how the accord will affect prices. Express Scripts said it will classify Advair as a “non-preferred” drug, meaning that patient co-pays will be higher than for preferred meds.
Some cockiness on Glaxo’s part was understandable. About 15.5 million prescriptions for Advair were written between April 2013 and March of this year, according to IMS Health, a market researcher.
This makes Advair one of the 10 most prescribed drugs in the country, with annual U.S. sales topping $5 billion.
In January, the Christensens were charged $1,036.16 for a three-month supply of Advair.
As of March, the cost of the medicine rose nearly 20% to $1,240.40.
Uncle Sam — that is, Medicare — pays most of that amount. But Christensen told me this doesn’t make such high prices easier to swallow.
“What a waste of Medicare funds,” he said.
So Christensen did what many Americans do in the face of soaring healthcare costs: He took his business north of the border.
For years he’d been buying some of his wife’s other prescription drugs from an online Canadian pharmacy, Canada Drugs. With their doctor’s approval, he added Advair to the list.
What cost $1,240 in the United States ran about $250 in Canada — even less than their U.S. copay.
It goes without saying that there’s no economic rationale for such a wide gap in pricing.
Bradd Pavur, a Glaxo spokesman, said the company takes “a thoughtful approach to pricing in all the countries in which we operate.”
“Our objective is to deliver medicines that address the needs of patients and price according to the value that they deliver,” he said.
That’s fine and dandy, but his comments suggest that an asthma drug like Advair delivers more value to Americans than it does to people in other countries, which is, of course, foolish. Canadians enjoy breathing just as much as we do.
Pavur said it’s unfair to compare Advair prices in the United States with those in Canada. “The two healthcare systems are different from one another in many ways,” he said.
One way they’re different: Canada, like most other developed countries, requires that prices for prescription drugs be fair and reasonable. The United States has no such requirement. Drug companies can charge Americans as much as they please.
Glaxo is long past the point of recouping its research and development costs for Advair, which has been one of the world’s bestselling drugs since its introduction in 2001. Global Advair sales reached $8 billion last year.
Advair’s patent protection expired in 2010, but Glaxo’s patent on the inhaler used to administer the drug lasts until 2016. There are currently no generic alternatives for the drug.
The Centers for Disease Control and Prevention estimates that about 19 million American adults and 7 million kids have asthma. The cost to society, including medical expenses and lost productivity, is $56 billion a year.
The Christensens’ Medicare plan is administered by Kaiser Permanente. Socorro Serrano, a Kaiser spokeswoman, said the couple and others in their position should be very careful when shopping for prescription drugs online.
They “should consider whether drugs purchased online from foreign countries are genuine, safe and effective,” she said. And that’s good advice.
Many ostensibly genuine drugs bought online have been found to be counterfeit or tainted. Many originate in China or India.
Christensen said he and his wife have never had a problem with pills obtained from Canada Drugs. He also said Americans with serious medical problems, and especially seniors with limited funds, might have no choice but to take their chances.
His wife’s medical costs are so high, Christensen said, that he’s had to take out a reverse mortgage on their condo to pay the bills.
“I don’t know what else we can do,” he said.
He and his wife could move to Canada. But they love their country too much for that.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to email@example.com.