/publications/issue/2003/2003-11/2003-11-7490

FDA Tightens Up on Foreign Rx Drug Imports

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    The FDA?s increasingly aggressive crackdown on unauthorized imports of prescription drugs from Canada and other countries has begun to yield complaints against a number of US and foreign distributors. The following are among the recent targets of FDA enforcers:

? Rx Depot, an aggressive marketer of imported Canadian drugs that the FDA said has been engaged in the "misleading promotion of unapproved drugs for sale to Americans for profit"

? Alliance Wholesale Distributors and Locak Repack Inc, Richton Park, Ill, repackagers, accused by the agency of selling misbranded drugs labeled in a foreign language that may "pose a serious or even life-threatening risk to patients using them"

? Detroit-based CanaRx Services, an Internet distributor of Canadian pharmaceuticals that the FDA says "channels drugs through companies other than licensed pharmacies and does not consistently use shipping practices that ensure its drugs are safe and effective"

? A number of other online marketers in Canada, Thailand, and Mexico that have been accused by the agency of selling "an unapproved, mislabeled version of the acne drug Accutane" without a prescription

    "We will take action against those who put patients at risk by trying to import and sell unapproved, mislabeled, and counterfeit drugs," FDA Commissioner Mark B. McClellan, MD, said.

Rx Discount Cards Yield Only Modest Savings

    Prescription-drug discount cards offered by pharmacy benefits managers (PBMs) provide some savings for seniors, but not much. That is the bottom line of a new General Accounting Office (GAO) study that analyzed the prices of 9 drugs widely prescribed to older Americans.

    The PBM cards, which cost seniors $25 to $30 a year to buy, yield average savings of less than $5 per prescription, the GAO investigators found. Significantly, however, they told Congress that "savings from PBM-administered cards . . . can differ because retail pharmacy prices vary widely."

    In Washington, DC, which had the highest median retail pharmacy prices of the 3 areas surveyed, patients using the cards to buy a 30-day supply of the 9 drugs were able to pocket savings that ranged from $2.09 to $20.95 per Rx. In California, however, the savings were much slimmer because state law entitles seniors to buy prescriptions at the same price charged to Medi-Cal.

    "At best, prescription drug cards provide only token savings for seniors," said Rep Henry Waxman (D, Calif), a critic of the Bush administration?s plan to hold down medication costs for seniors through pharmacy discount cards. "Double-coupon day at the grocery store probably saves them more."

    Lobbyists for the PBM industry put a different spin on the GAO findings. The study confirms that "PBM-administered drug-discount cards can save consumers hundreds of dollars per year," according to officials at the Pharmaceutical Care Management Association. They blamed the variation in savings on differences in "the extent of the retail pharmacy markup?[The GAO?s] analysis appears to suggest that consumers should shop around for lower drug prices, even when using a discount card."

Most Certified Disease Managers Get Paid for It, Study Concludes

    Pharmacists credentialed as Certified Disease Managers (CDMs) are finding that pharmacist care services can, indeed, be a paying proposition. According to a new survey by the National Institute for Standards in Pharmacist Credentialing (NISPC), nearly 2 of 3 CDMs are currently providing disease state management (DSM) services to their patients, and more than half of them (57%) report receiving compensation for those services.

    The survey, which polled nearly 300 CDMs from all practice settings throughout the country, also found that 66% now spend more than 10% of their time on direct patient care activities, and most spend less than half of their time on administrative activities related to the provision of these cognitive services.

    "Sixty-four percent mentioned that private or state-sponsored DSM programs exist that utilize pharmacists as the health care provider," officials at NISPC said. "Lack of time, compensation, and employer support were the main reasons that 33% of respondents do not offer DSM to their patients."

NCPIE Finds Widespread Patient Misuse of OTC Drugs

    The National Council on Patient Information and Education (NCPIE) has raised a red flag for pharmacists, warning that millions of Americans may be taking OTC medications inappropriately, or in ways that may adversely affect their prescription medicines. NCPIE?s latest patient survey found that more than half of those polled (51%) reported having taken a prescription drug and an OTC medication simultaneously?a potentially dangerous act if the 2 products contain the same active ingredients.

    Nearly as many (48%) admitted taking more than the recommended dosage of an OTC medicine. Among those, 35% said that they take the next dose sooner than directed; 32% reported taking more than the recommended amount at a single time; and 18% admitted taking the medicine more frequently than recommended.

Chain Drug Leader Calls for 90-Day Prescriptions from Community Pharmacies

    National Association of Chain Drug Stores President Craig Fuller is calling for an end to "practices that pose clear conflicts of interest to allow patients to choose what is best for them when it comes to receiving prescription medication."

    At issue is the chain drug industry?s frequently voiced complaint that pharmacy benefits managers (PBMs) should not be allowed to entice consumers to abandon their community pharmacies by offering them economic incentives or larger prescription quantities if they switch to cheaper mail-order dispensaries.

    Although PBMs have a right "to compete with local retail pharmacies across the nation by providing prescription drug mail-order services," Fuller maintained that patients "should have the ability to decide whether the mailbox or their local pharmacy is the place they would like to receive their prescriptions, and without economic coercion." At least part of what the chain drug industry considers "economic coercion" is the ability of mail-order providers to dispense larger, 90-day prescriptions.

FTC Cites Progress in Speeding Generic Introductions

    Efforts by federal agencies to speed the introduction of cheaper generic drugs appear to be taking root. The latest example is Apotex?s earlier-thanexpected launch of a generic version of GlaxoSmithKline?s $2-billion antidepressant, Paxil.

    According to Federal Trade Commission (FTC) Chairman Timothy J. Muris, the accelerated generic competition for Paxil was due to his agency?s efforts to curb patient-extension tactics. As a result, the FDA implemented new rules prohibiting brand name pharmaceutical manufacturers from using multiple patents to secure more than one 30- month delay in the marketing approval for a generic competitor.

    "Shortly after the FDA published the final rule in July 2003, Glaxo asked the FDA to delist 3 Paxil-related patents, thus clearing the way for the FDA to grant final approval to the generic drug," Muris said.

IRS Okays OTCs for Tax-Exempt Flexible Health Spending Plans

    Nonprescription drugs can be paid for with pretax dollars through health care flexible spending accounts, thanks to a new policy announced jointly by the Treasury Department and the Internal Revenue Service. The 2 agencies issued guidance clarifying that reimbursements for OTC drugs by an employer health plan are excluded from income.

    As a result, reimbursements by health flexible-spending arrangements and other employer health plans for the cost of drugs available without a prescription will not be subject to tax, if properly substantiated by the employee.

    The clarified tax status for nonprescription medicines takes on added economic significance in view of the growing number of Rx drugs being shifted to OTC status?a switch that can force patients with insurance to pay for these treatments out of pocket.

    Despite the new interpretation, the cost of OTCs continues to be nondeductible for the purposes of the itemized medical expenses deduction, IRS officials said. "In addition, the cost of dietary supplements that are merely beneficial to the employee?s health [is] not excluded from income."