Sales of Canadian-sourced prescription drugs are booming in Florida as seniors are crunching the numbers of Medicare-subsidized drugs.
What these seniors have found, reports Kaiser Health News, is that even with Medicare’s drug subsidies, the foreign brands are often much cheaper.
How can that be? Kaiser says Medicare no longer offers the savings that earlier crops of seniors enjoyed with the insurer. Instead, modeling itself after private insurance companies, Medicare has raised co-pays and performed other tricks of cost-shifting to customers. In the process, by creating a demand for cheaper drugs, it created an industry of retailers that sell many drugs for less than a Medicare co-pay.
As reported by Kaiser, most of these retailers sprang up in Florida, home to many American seniors — and to regulators willing to look the other way. While still only a tiny industry of perhaps fewer than 20 stores, current conditions may be converging to fuel an expansion.
The feds claim the shops are illegal, mainly because some of the drugs haven’t passed the stringent U.S. review system. But, says Kaiser, Florida regulators aren’t pursuing enforcement of retailers such as Canadian MedStore, which now boasts six shops and claims to have a customer base of nearly 1,000, most of them seniors.
Canadian drugs are especially in demand because Canada strictly controls pharmaceutical prices, a practice not followed by the United States. Thus the same basic drug produced in Canada and the United States can sell for 60 percent to 70 percent less at the Florida stores, Kaiser says.
Right now, the customer base is sparse. A 2011 study cited by Kaiswer says about 5 million Americans get their drugs from foreign sources, just a 2 percent slice of the entire population. A Canadian nonprofit estimates about 1 million Americans buy Canadian-sourced drugs.
But the little industry has been steadily growing, surviving Medicare’s decision a decade ago to cover the cost of prescription drugs, driven by the upward thrust of drug prices in the United States and the trend to shift costs to customers.
And even though the retail outlets are far from full service, their prospects are bright. As the over 65 population expands with baby boomer buyers and U.S. pharmaceutical firms and insurers continue to drive up consumer costs, the word is getting around the senior circuit that these pharmacy speakeasies can save them big bucks on their chronic condition medications.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
