Seniors driving to Canada for cheap prescription drugs may not be getting deals, experts say

DETROIT, Mich. – It was common in Michigan in the early 2000s for groups of seniors to pile into buses and travel to Canada to buy cheaper prescription drugs. Some cities even organized free trips.

While the number of drug trips to Canada plummeted when a new Medicare prescription drug benefit took effect in 2006, stories of patient caravans crossing the border returned to the headlines this year after U.S. Sen. Bernie Sanders, I-Vt., who is running for president as a Democrat, joined diabetes patients on a late July bus trip for cheaper insulin during the week of the presidential primary debates in Michigan.

These trips to Canada may save a few patients money, but interviews with pharmacists and those buying drugs suggest these caravans are no longer so common. Rather, health care reform advocates commonly cite anecdotes of such patient trips to help draw attention to high prescription drug prices in the U.S. – still the highest in the world – and to build support for various proposals for lowering them.

Larry Mobbs, 74, of Port Huron, Michigan, has Type 1 diabetes and after reading stories about other diabetics going to Canada for better prices on insulin decided last summer to drive across the Blue Water Bridge to Sarnia, Ontario.

He discovered that even though the sticker price for insulin is cheaper at the Canadian pharmacy he visited, he pays a bit less money out of his own pocket when he buys insulin at a local Rite Aid and uses his health insurance.

Time for Canadian imports?

No one disputes that U.S. drug prices are high. The Trump administration is reportedly working on a plan to allow the import of some drugs from Canada. And Democrats in the House of Representatives recently unveiled legislation that would allow Medicare to negotiate down drug prices for the first time.

In Michigan, state Sen. Ruth Johnson, R-Holly, the former secretary of state, introduced a bill in September to establish a Canadian drug importation program.

Facing high prescription costs, some Michigan patients cross over to Ontario or obtain Canadian-sourced drugs through the mail. Yet the volume of U.S. patient traffic appears well below early 2000s levels and has not experienced any recent spikes, according to interviews with pharmacists in the U.S. and Canada.

More patients in the U.S. now have some form of insurance covering prescription drugs because of the 2006 Medicare benefit expansion and the Affordable Care Act.

Changing insurance costs

Even though some insurance plans have high annual deductibles or out-of-pocket costs, many patients with chronic conditions may find themselves better off paying for high-cost U.S. drugs until they satisfy their deductibles, at which point the drugs become much cheaper or even free.

Crucially, the so-called "doughnut hole" coverage gap in the Part D Medicare prescription drug benefit has narrowed as a result of the 2010 Affordable Care Act and is set to go away completely in 2020.

A patient enters the doughnut hole after he or she and his or her drug plan have spent a certain amount of money for covered drugs. At that point he or she has to pay all costs out-of-pocket for prescriptions up to a yearly limit, according to HealthCare.gov. Once they have spent up to the yearly limit, the coverage gap ends and their drug plan helps pay for covered drugs again.

For most seniors on Medicare, the closing of the doughnut hole means that it can be cheaper to fill their prescriptions for chronic conditions in Michigan than Canada, according to Andrew Sternberg, co-owner of a pharmacy in Detroit.

"Unless you run those numbers exactly right, you end up losing money in the long run" by going to Canada, he said. "It depends on their situation. You have to basically sit down with someone and run the numbers."

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Walmart insulin

Sternberg said skilled pharmacists can sometimes significantly lower insulin costs for some Type 2 diabetics if they "back convert" them from the newer, longer-lasting and expensive insulins (roughly $300 a vial) to older and cheaper 70-30 insulin, a mixture of human insulin types that can sell for as low as $25 a vial at Walmart.

Such a move requires permission from the patient's doctor, and according to some diabetes educators, these older insulins, although workable, aren't the preferred treatment option for those with Type 2 diabetes and can make their condition more unpredictable.

Older insulin is less an option for those with Type 1 diabetes because the switch makes blood sugar control more irregular and requires individuals to make drastic changes to their lifestyle, such as adopting a very strict eating schedule.

Sternberg and his father, Barry Sternberg, ran a cross-border purchasing alliance in the early 2000s called Can-Am Rx to help U.S. patients buy cheaper Canadian drugs for various conditions such as high cholesterol, high blood pressure, arthritis and diabetes.

The initiative saved people hundreds of dollars in monthly costs and assisted them with obtaining necessary prescription endorsements from Canadian doctors. However, the Sternbergs discontinued the service around 2007 in the wake of Medicare Part D because demand for it fell, he said.

Going to Canada for insulin

The chartered bus carrying the diabetes patients and Bernie Sanders, who won Michigan's 2016 Democratic presidential primary, stopped at a pharmacy near the Detroit-Windsor tunnel.

Such trips happen occasionally, an organizer said, and Sanders' campaign asked to join their group on the July trip.

"As Americans, what we have to ask ourselves is how come the same exact medicine, in this case insulin, is sold here in Canada for one-tenth of the price that was sold in the United States," Sanders said during the trip. "It has everything to do with the incredible greed of the pharmaceutical industry."

Doug Cozad, the manager of Olde Walkerville Pharmacy, said in an interview this month that insulin is an over-the-counter medicine in Ontario and indeed sells for roughly 10% of what patients say it costs them in the U.S.

Cozad said he has been a pharmacist since the 1970s and that the peak for U.S. residents journeying to Windsor for drugs was in the early 2000s. The flow of cross-border patients slowed considerably later that decade, he said, and has remained steady at about a handful each week. There has been no recent spike in activity, he said.

Those early 2000s patients came to Windsor for all sorts of brand-name drugs, Cozad said. Today, they primarily come for insulin.

'Not technically legal'

Customs agents allow U.S. residents to bring back a 90-day, personal supply of medicines from Canada.

"It is not technically legal," U.S. Sen. Debbie Stabenow, D-Mich., said in an interview, "but we pushed, pushed and pushed and it is allowed."

Stabenow has supported legislation to allow the importation of cheaper, Canadian pharmaceuticals since her election to the Senate nearly 20 years ago. She once organized drug-buying trips to Canada on a bus nicknamed the "Stabenow Rx Express.”

"The reality is if you take Celebrex for arthritis, you pay more than $1,000 for a 90-day supply on this side of the bridge. On the other side, $204," she said.

Some Michigan residents are making trips to Canada for cheaper drugs, and not only for insulin.

Marianne Udow-Phillips, executive director of the Center for Health and Research Transformation in Michigan, said she has heard patients share such stories during recent Town Hall public events about expensive prescription drugs.

“Consumers who have attended those talk about going to Canada and how it’s the only way that they’re surviving – that they don’t have the money otherwise," she said.

Sarnia insulin

Mobbs, the Port Huron man who made a trip to Canada, uses two different types of insulin every day: Lantus, a long-acting drug that he injects at dinnertime, and Apidra, a fast-acting one he uses before every meal.

One bottle of Apidra, he said, costs $265. The Lantus costs $266 per bottle when he buys it at his neighborhood Rite Aid.

A retired social worker, Mobbs said he is fortunate to have good health insurance. He's covered by the state's retiree health care plan along with a Medicare Part D plan. But it still costs him about $60 a month in co-pays to buy both insulins.

This past August, he parked his van in the parking lot of the Real Canadian Superstore and headed for the pharmacy.

"I bought one Apidra and one Lantus," he said afterward. "After calculating the exchange rate, it cost me $30 and $71," for a total of $101."

It turned out to be cheaper for Mobbs to get his insulin at the Rite Aid in Port Huron. Still, he questioned why the Medicare program is paying so much for drugs that are cheaper just over the border.

How Canada controls costs

Prescription drugs are cheaper in Canada because of federal and provincial government policies that essentially act as price controls. The U.S. generally does not control and negotiate down prescription drug prices, with the exception of the Department of Veterans Affairs and the Medicaid program.

Even so, pharmaceutical prices in Canada are reportedly still the third or second highest in the world behind the U.S. and the country's government is trying new strategies to lower prices.

Because Canada's national health care system doesn't include prescription drug coverage, patients rely on a patchwork of public and private insurance plans that leaves as many as one in five without drug coverage.

In the U.S., Medicare's Part D benefit specifically prohibits the negotiation of drug prices.

Opinion polls have found the majority of Americans support allowing the government to negotiate with drug companies for lower Medicare prices. However, the idea is controversial and opposed by some Republicans and drug companies, which warn it could impede innovation.

"The drug companies are very opposed because they know Medicare is a big insurance company," said Stabenow, who wants Medicare to negotiate drug prices. "If Medicare negotiates a lower price, then they’ll have to bring prices down for everybody, which is what they don’t want.”

The House of Representatives could vote next month on an aggressive Democratic-backed bill that would allow Medicare to negotiate prices for the first time on 250 expensive drugs as well as insulin.

The bill's cosponsors include U.S Reps. Debbie Dingell, D-Dearborn; Dan Kildee, D-Flint; Elissa Slotkin, D-Holly, and Haley Stevens, D-Rochester Hills.

“When you have large numbers of patients, you get better competitive pricing when you negotiate," Slotkin said in an interview. "It’s like Costco. You get a cheaper price if you buy 4 gallons of milk together than when you go to Kroger and just buy 1 gallon.”

Last month, the U.S. House passed by a unanimous vote a proposal from Slotkin that would allow Medicare patients to see out-of-pocket costs for different drugs at nearby pharmacies while they are still at their doctor's office. The Senate has yet to act.

Canadian drug importation

State Sen. Johnson joined Stabenow, Dingell, Kildee and other speakers at an AARP rally this month in downtown Detroit for lower drug prices. The crowd of mostly seniors chanted "stop the greed” and “The best drugs don’t work, if you can’t afford them.”

Johnson is the sponsor of state legislation that would create a Canadian drug importation program in Michigan, allowing residents here to buy at those cheaper prices.

President Donald Trump has said he supports the concept of importing drugs from Canada on a nationwide scale and hinted in a recent Tweet that a plan for that could soon emerge.

Johnson's legislation is still before the Michigan Senate's Health Policy and Human Services Committee.

“We can go across, but should we make people? I don’t think so,” Johnson said.

Follow JC Reindl on Twitter @jcreindl.

This article originally appeared on Detroit Free Press: Are prescription drugs, insulin cheaper in Canada? Not always