Save pharmacy plan dollars with travel benefits for prescriptions

By Chris Hanson-Ehlinger
Thu, Jan, 08, 2015 @ 09:01 AM

describe the imageDestination medicine—traveling out of the U.S. for expensive medical procedures—is growing in popularity and offers significant economic savings. The extremely high cost of U.S. pharmaceuticals compared with dramatically lower international costs make destination prescriptions a viable option worthy of consideration.

For example, one oral product in the U.S. costs $80,000 for a 90-day supply. The same drug costs $5,000 in numerous other markets (Europe, Asia, Central America, South America). If you assume average travel costs (including time lost from work) are $5,000, using a destination prescription benefit would reduce the $80,000 drug price to $10,000, which represents an 8:1 return on investment.

Price disparity for identical products

Just to be clear, the price differentials are for identical products, made in the same facilities as U.S. products. The only difference is that the packaging and labeling may be in a different language. The FDA works vigilantly to ensure the integrity and safety of the U.S. drug supply. Nonetheless, even legitimate products manufactured in FDA-approved facilities and produced to U.S. standards cannot be broadly imported and used in the U.S. market. 

Historically, high cost treatments for conditions such as cancer were only available by IV administration or, because of the toxic nature of the product, required professional handling. With today’s technological advancements, many of those same treatments now are available orally or packaged for self-administration. As a result, many high value drugs are now easily portable, so patients can take responsibility for picking up and storing the products in their homes similar to traditional medications.

Pharmaceuticals improve the quality of life and can be life sustaining. Many of the drugs coming through the pipeline are for conditions rarely experienced in a population. The combination of high development costs with low demand is part of the reason new treatments may cost $100,000 per year or more. And while many countries regulate drug prices, the U.S. does not.  

A case for prescription travel benefits

Since the FDA already allows individuals to bring up to a 90-day supply of prescription drugs into the country for personal use the only barrier is a financial one. A travel package incorporated into a formal benefit design makes sense. Every month Americans make 4 to 6 million trips to destinations around the world. Such travels represent great opportunities for individuals to enjoy a benefit design that lets them purchase lower priced medications while abroad. Similar services already in place for destination surgeries and other medical treatments could be modified to also address pharmaceutical opportunities.

While some patients may worry about medication safety and quality, others would welcome the savings when they learn that they are paying far more for the exact same medications they receive in the U.S. With the right plan design, communication and incentives, the payoff for health plans could be significant.

Shawn Patterson is national sales and client management leader at Burchfield. For more information, please call 800-778-1359 or send us a note (http://www.burchfieldgroup.com/contact/).

Copyright © 2015 The Burchfield Group. All rights reserved. No part of the content contained herein may be transmitted, redistributed, copied, stored, downloaded, abstracted, disseminated, circulated or included as part of any other service or product. For all permissions, please contact chanson-ehlinger@burchfieldgroup.com

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