How Soaring U.S. Drug Prices Fueled What Feds Call An Illegal Import Of Medications

A question being asked across the country.

How can I afford my prescription drugs?

Prices are skyrocketing.

It's a broken system and we need to make sure everyone

is paying attention.

With some specialty medications costing tens or

even hundreds of thousands of dollars per year,

and prescription drug prices in the U.S.

averaging nearly three times more than in other

countries, driving people and employers to find a

solution.

It's such a desperate thing to think that you might not

have your medication at all.

A booming cottage industry is selling itself as an

antidote, often getting the drugs overseas for a

fraction of the cost.

We do a public service.

We help people get access to medications.

But there's a major catch.

What they're doing is illegal,

and it's putting American lives at risk.

What I tell my friends and family is that the most

expensive medicine that they could get is one that isn't

safe.

Patients and employers are desperate for a solution.

The question is, at what cost?

The FDA says it's illegal to import drugs that are

available and sold in the United States.

All of these drugs are, in fact,

available domestically.

Correct? Imagine opening up your mail,

expecting your life saving medication,

and getting this, all in Turkish.

The HIV drug Biktarvy, originating from this

pharmacy in Istanbul and shipped to the United States

via what's known as an alternative funding program,

or AFP, which buys high cost specialty drugs from abroad

for a fraction of the price in the U.S.

Every time you're taking a foreign medicine that's been

delivered from overseas, you're playing a game of

Russian roulette.

Lori Mayall is in charge of anti-counterfeiting and

product security at Gilead Sciences,

which manufactures Biktarvy.

When you first learned about this case, did you think

this was a one off?

That's what we were hoping, because we knew that it was

very dangerous for patients to be receiving foreign

medicines from overseas.

They're unregulated.

They're coming from unknown sources.

But this is not an isolated incident.

These AFPs are targeting cash-strapped employers and

their employees, like teachers,

police officers and retirees from places like rural

Lebanon, Missouri, to small towns in upstate

New York. These employers typically don't have

traditional insurance and pay health care costs out of

pocket, so they carve out coverage of expensive

specialty drugs for illnesses like cancer or

M.S. That can cost hundreds of thousands of dollars a

year. AFP's save them money by buying lower cost drugs

from overseas. And AFP's make money by charging fees

or taking a percentage of the savings.

Patients get the drug for little or no cost.

AFP say they're an answer to a broken health care system

and what they're doing is legal.

Connecting employees directly with cheaper drugs

overseas, but regulators say what they're doing is wrong.

As part of our investigation,

we submitted nearly 100 public records requests that

show private employers, cities,

counties, school districts and unions are using AFP's,

and we obtained more than 10,000 pages of documents,

including contracts, e-mails,

invoices and complaints.

Not all AFP's import medicines,

but the ones that do promise outsized savings,

so it's easy to see why they're growing in

popularity.

It's a sales pitch on the backs of the safety of the

patients. Patients take a safety hit in order to save

an employer money.

Shabbir Imber Safdar is the executive director of the

partnership for Safe Medicines,

a coalition of nonprofit and pharmaceutical industry

groups that protect consumers against unsafe and

counterfeit drugs.

He's been investigating AFP's for the past two

years.

We have uncovered about $5 million just in the last two

years of illegally imported,

unsafe medicine that patients have been given.

$5 million? Yes.

Medicine that was never reviewed by the Food and

Drug Administration.

Many AFP's we analyzed said their medications were

coming from countries like the UK,

Australia and Canada.

Why so many of these AFP's have been able to

infiltrate, so to speak, so many different employee

health plans and county health plans.

They think, oh, Canadian medicine is safe,

but you don't actually know if that medicine truly came

from Canada.

For example, Safdar says he found medication from this

Canadian pharmacy wasn't always coming from Canada.

In the fine print, the pharmacy's website says

we also have options to dispense your medications

from our international fulfillment centers around

the world, including the UK,

Australia, New Zealand, Turkey and India.

The pharmacy declined to comment.

What if patients want to opt out?

Sometimes employers don't give them a choice.

Emails we obtained show the city of Lebanon,

Missouri, told its staff that their medications must

be obtained through an AFP called Sharx,

based in Saint Louis, Missouri.

Otherwise, their high cost medication will no longer be

covered and they will be required to pay the full

price. The city declined to comment.

It's no choice at all. Patients are put in an

impossible position, and it's a crime that

they're still paying health care premiums, and yet they

are not getting FDA approved medicine,

legal medicine or safe medicine.

In a statement, Sharx told us Americans pay

on average 3 or 4 times more than the rest of the world

for their prescription drugs,

and added that we help employees access the

medications they need when their medications are not

covered by insurance.

No patient, no American, should ever have to be

forced to take medication that's going to put their

life at risk.

We learned that the Department of Homeland

Security has launched several criminal

investigations into AFP's.

Nicole Johnson is a special agent with Homeland Security

Investigations who manages the pharmaceutical program

at the department's National Intellectual Property Rights

Coordination Center.

A lot of these AFP's are going to target lower

income, lower paying jobs.

This is going to be a school district, a county

government, a religious organization where there's

not a lot of money in excess for health benefit plans.

So if you only have $500,000 to spend a year and you can

save a couple hundred thousand dollars,

you could use that money elsewhere.

So they are really preying on those that are the most

vulnerable in the system.

Absolutely.

Johnson revealed what the ongoing investigations

uncovered about how most AFP's operate.

What we've discovered is these alternative funding

programs are fulfilling prescriptions through

unverified suppliers and online pharmacies,

potentially illicit.

And they're not actually importing the drugs

themselves. So the prescriptions are getting

mailed directly to the patients.

Therefore, customs has no idea how many prescriptions

have made it to US citizens.

How many have come from verified places?

And this is a way for them to evade customs and being

detected by law enforcement.

So we really just don't know.

We have no idea.

What's wrong with receiving medicines from overseas,

especially if they are from Europe or Canada.

Isn't that safe?

Not necessarily.

The United States has very strict laws and regulations

that are intended to protect patients.

So there's rigorous testing,

there's supply chain security that's been put in

place. Pharmaceuticals that are intended for another

country may not have the same safety standards that

the United States has.

Johnson says. AFP's typically argue they're

operating legally under the FDA's personal importation

policy, a narrow exception that lets individuals get

medications from abroad for personal use.

When we asked the FDA specifically if personal

importation covered the practices of AFP's,

it told us in most circumstances,

a person cannot import prescription drugs from

other countries into the U.S.

as substitutes for FDA approved drugs,

and that medicines from outside the legitimate U.S.

drug supply chain do not have the same assurance of

safety, effectiveness and quality as drugs subject to

FDA oversight.

If anyone knows all about the FDA and AFP's,

it's Leigh Verbois.

She spent nearly 23 years at the FDA,

the last five as director of the Office of Drug Security,

Integrity and Response.

She left the agency earlier this year,

and this is the first time she's publicly speaking out

about AFP's.

What AFP's are doing are importing misbranded and

unapproved foreign drugs, which is illegal.

Full stop, full stop.

She says the FDA's personal importation policy doesn't

allow what AFP's do.

The policy is such that it allows for very exceptional

instances for importation of products when an individual

cannot obtain a product that is approved in the United

States. So if it's not approved or available

clinically in the US, an individual can obtain a

product from a foreign source,

assert that they are importing that product for

themselves, and then bring that product under a limited

supply of 90 days into the United States.

And that product cannot be commercially brought into

the US.

So in an instance in which a patient is receiving by mail

a drug that is approved for use in the United States,

but the drug is coming from outside the United States,

is there any circumstance under which that is legal?

No.

There's no gray area here.

There's no gray area when the product is approved in

the United States and they are being commercially

purchased and brought into the United States,

there is not a gray area.

Do you think patients are aware of this practice,

that there's something wrong with it, that there might

not be legal or allowed?

I don't think that the average patient understands

that the products that they're getting are not FDA

approved. And I don't think the average patient

understands the complicated nature of the distribution

practice that's happening.

Another beautiful day.

Bruce Zimmerman is one of those patients.

A Florida based AFP called Price MDs,

has taken foreign importation one step

further, according to documents we reviewed,

going so far as sending patients to the Cayman

Islands and Bahamas on all expense paid trips so they

can pick up their medications themselves.

Bruce and his wife, Becky, took several of these

luxury trips, courtesy of Price MD's

between 2019 and 2021.

We interviewed them about the program near their home

in Saint Helena Island, South Carolina.

Let's talk about why we're here.

Bruce, when were you diagnosed with multiple

sclerosis?

2017 was the official word from the doctor.

How has life changed since that diagnosis?

Oh, it's a lot harder.

Just walking up a set of stairs is an obstacle for

me. It's not just an inconvenience.

I worry about falling.

He says his boss told him about Price MD's,

an optional program the company was offering.

They stressed that to me.

It's the exact same medication that I was taking

at the time.

When you heard about this program from your boss,

and you go home to Becky and you tell her about it.

What was your reaction?

Is this even legal?

That was my first thought.

Despite their initial hesitation,

the couple took multiple all expense paid trips after the

first one went off without a hitch.

We tried to take in all that we could.

We went swimming with stingrays.

We went to Starfish Point.

You know, I went scuba diving.

I got a license so I could scuba dive and then took

three scuba diving trips.

It's just there's so much to do.

And how many times did you do this?

I went to the Cayman Islands four times.

Bruce went five, and then we went to the

Bahamas. And we did that three times.

And each time, they would bring back a free

three month supply of Avonex,

the medication Bruce took for his multiple sclerosis,

which currently retails for more than $2,100 per weekly

dose.

When it was up, time to call them and get

another flight.

Based on what you saw, do you still believe that

the medicine that you received would be the same

as if you walked down the street to the pharmacy here?

I do.

Yeah. And the first time I got the medication,

I looked at it just to make sure.

And it it was exactly the same stuff,

same plant, everything.

Same packaging.

But Turkish customs data we analyzed show that Price MDS

has previously rerouted shipments of Avonex meant

for one country or market, and sold it through

unauthorized channels.

The data show that from 2020 to 2023,

around the same time Bruce and Becky were making these

trips, Price MDS sourced Avonex originating in

Germany, which passed through customs in Turkey

via a Turkish exporter, then made its way to the

Cayman Islands, Bahamas, Switzerland or the

United States.

Biogen, the manufacturer of Avonex,

told us this route is not part of Biogen's authorized

supply chain and that it does not have any direct

customers or ship to locations in either the

Cayman Islands or Bahamas.

The company added, it condemns any illegal

trade in pharmaceutical products and Avonex is just

part of the picture.

Since 2020, Turkish customs data also shows Price MDS

has imported more than 1200 drugs valued at more than

$2.7 million to various countries.

And that's just the drugs that can be traced through

Turkey. Price MDS declined to comment on this story.

Does that concern you at all?

That the drug may be coming from a place it's not

supposed to be coming from?

I would want to dive a little deeper into that.

I see your wheels turning in your head,

Becky.

Well, because I'm thinking, okay,

it's I can easily say, well,

it doesn't concern us now because we're not in that

program. But there are people that are still in

that program. And I would be concerned for them.

Today,

Bruce no longer uses Price MDS.

He left the employer that offered it after his M.S.

progressed to the point where he couldn't do his job

anymore. Now, he says his new insurance

doesn't consistently cover the medication he needs.

When we talk to the special agent,

we were discussing this because there's an

investigation into these types of programs.

And essentially, she said that these kinds of

programs have found a loophole,

because if those drugs were shipped directly to the

United States, that would be illegal and

customs would seize them.

But here they have people go abroad and pick up the drugs

themselves.

I'm in danger of not having any of my medication at all.

At least then I had the medication,

and at one point you don't care if it's illegal.

If I would have been told that, I say,

send me the tickets, I'll go again.

So, legal or not legal, you do it again?

Yes. If I was faced with it,

I would do it again.

It's such a desperate thing to think that you might not

have your medication at all.

In some contracts, AFP's appear to be

transferring blame to the patient,

like this one, from Canada-based AFP

CanaRX. Patients are required to agree they have

purchased my medications internationally for personal

use, and that title to my medication passes to me when

my medications are shipped.

It goes on to say patients must release the plan

holder, its officers, employees,

agents, heirs from any and all causes of actions with

respect to errors or omissions by CanaRX.

It seems like the patient is saying I'm assuming all

liability here.

And that's the scheme is they are trying to avoid

being held responsible for this.

So even if they write this in a contract,

that doesn't mean that they're not violating U.S.

federal and state laws.

But Johnson says the responsibility falls on the

AFP, not the patients.

We are viewing our patients in the United States as

victims of these crimes.

This company is providing them with illicit

pharmaceuticals.

And so we would consider that the company itself is

the criminal in this scenario,

not the patient.

CanaRX general counsel Joseph Morris told us his

company is following the law.

The FDA says it's illegal to import drugs that are

available and sold in the United States.

I don't think that's what the handbook means,

but I understand it's a handbook as opposed to a

regulation. It's a handbook that's meant to guide the

exercise of discretion by FDA officials.

And I do think that there are ambiguities built into

that, too, because what makes a medicine affordable,

available if you can't afford it?

Specifically, the quote is that the policy personal

importation applies if the effect of treatment may not

be available domestically.

All of these drugs are in fact available domestically.

Correct?

Well, A what if they are available domestically?

What if B they're not available to you?

But the treatment is available to you if you

want. If you cross the bridge from Detroit into

Windsor and walked into a drugstore in Windsor and

there's the medicine, the same medicine you could

buy across the bridge in downtown Detroit.

And there it is in Windsor, substantially lower price.

So you're interpreting available as affordable.

That's a factor in availability. Absolutely to

be sure.

Morris also cites this law that says the Department of

Health and Human Services may grant a waiver to

individuals on a case-by-case basis for the

importation of a prescription drug.

And he says since CanaRX contracts directly with the

patient, it's the patient who chooses to accept an

imported drug.

That's the business that CanaRX is in.

It assists individual American consumers in

exercising their right of personal importation,

bringing their product to the border,

and asking the United States government at the border to

adjudicate the lawfulness and appropriateness of their

personal importation of the product.

And drug safety is a top priority.

Morris says, CanaRX has never had one instance of a

counterfeit drug slipping through.

In fact, it advertises the highest safety standards and

that the medicine shipped to U.S.

patients comes from highly regulated tier one countries

like Canada, the UK and Australia.

Built into my client's program are the safety

precautions that ensure that the medicine is real,

that it's coming through a legitimate supply chain,

that it's coming from a recognized manufacturer,

that it is what the patient's doctor is ordering

be delivered to that, to that patient.

But one document we obtained shows the FDA was concerned

about a possible fake.

In 2023, it emailed a cannabis patient who was

receiving a menopause gel.

The FDA wrote, it seized the medication for

being potentially misbranded,

counterfeit and said the patient does not qualify to

receive this medication under the personal

importation policy.

Does this happen often?

It happens probably several times a quarter.

Sometimes I will advise the individual patient who made

the order how to contact the customer service or whoever

is the relevant agency, and say,

here's who I am, here's what this is,

Please deliver my medicine and most of the time these

things are resolved happily.

If there are so few seizures or interceptions,

why are the ones that are in fact intercepted,

why do they say that the patient is not qualified to

receive it? What makes the difference?

On behalf of the patient, I will say boldly,

those regulators are wrong.

In 2019, CanaRX also received a warning letter

from the FDA for importing drugs from abroad by

operating in a manner that substitutes the FDA approved

drugs prescribed by the U.S.

health care provider with unapproved drugs.

Morris says CanaRX responded to the FDA in this document

that the FDA's description of CanaRX and its business

model is incorrect, but did agree to stop

importing drugs which require a doctor to

administer. The FDA told us it could not comment about

ongoing compliance issues.

Verbois says Morris' interpretation that the

agency has discretion is flat out wrong.

That is not what is meant by that handbook.

Absolutely not.

Absolutely not.

So it's not just up to the FDA official to decide

whether or not this is okay.

It is not okay in any circumstance.

No. CanaRX is not the only AFP on regulators radar.

In March 2023, the FDA sent a warning

letter to ElectRX and Health Solutions,

an AFP based in Ohio.

The FDA letter said its drug importation program from

overseas, poses significant health risks to U.S.

consumers. The company responded that its personal

importation of medicines was legal.

Despite the warning, ElectRX this year was still

offering medication from overseas through its

personal importation program.

The company declined to comment on these practices

and took its website offline after we reached out for

comment. The FDA has not taken further action.

Do you think these AFP's should be shut down?

I do think they should be shut down because what

they're doing is illegal, and it's putting American

lives at risk. It could kill a patient.

In the meantime, the House Appropriations

Committee in June said it has deep concern over the

health risks posed by illegal importation of

unapproved and misbranded drugs,

particularly through AFP's.

Given these significant dangers,

the committee directed the FDA to provide a

comprehensive report on how to strengthen oversight.

But for many, using AFP's are the only way

to deal with sky high health care costs.

As part of our investigation,

we spoke to more than a dozen patients.

And for these employees, from teachers,

to police officers, to retirees,

many told us using AFP is convenient and saves them

money. And for others, it's a matter of using an

AFP or not getting the prescription at all.

But not everyone is comfortable with it.

Take the HIV patient who received the Turkish

Biktarvy.

As you can understand, receiving life saving

medicine from a mysterious source and a language you

can't read was quite concerning.

They did not know if the product was safe,

genuine. And so they reported it to their health

care provider.

And that's how it landed on your desk. That's right.

Gilead's testing determined that it was real Biktarvy,

but intended to be sold in Turkey and not permitted to

be shipped to the U.S.

So what's the real danger here?

It sounds like a lot of the drugs are just coming from

another country.

This is my choice.

You don't know how that product was stored,

handled, or distributed.

And it travels through an illegal supply chain that's

easily infiltrated with counterfeits.

How did we get here, do you think?

In terms of AFP's and this need,

it's really a need to save costs on sky high

prescription medicines.

Well, AFP's are another middleman,

another for-profit company that sits in between the

pharmaceutical manufacturer and the patient.

And in the U.S., HIV medicines are fully

covered. So you have to really ask yourself,

why are they in this business?

It has to be for profit.

It's not for the patient.

They say that they are saving the patient money.

They're saving the employer money.

So they're saving everybody money on these prescriptions

that cost a lot of money.

They're promising savings, but they're delivering risk.

And when it comes to prescription medicines,

prioritizing cost over quality is dangerous.

Drugs like the Turkish Biktarvy,

she says, pose a critical threat to pharmaceutical

companies like Gilead because they violate their

intellectual property rights and undermine the safety and

regulatory oversight of their drug supply chains,

which is why Gilead filed a lawsuit last December to

block the shipment of its medications from overseas.

Among the companies targeted is Meritain Health,

part of Aetna, which is owned by CVS

health. Meritain contracted with a company that used an

AFP called RXValet, which is also a defendant,

to supply high cost medication to insured

patients.

I've been in health care for a good 30 years,

so most of most of my career.

Greg Santulli is the CEO of RXValet and president of

Advanced Pharmacy, a mail order pharmacy that

handles prescriptions in the U.S.

he says RXValet sources high cost specialty medications

from Canada, Australia and New Zealand and that it is

legal and safe.

Let's talk about the Gilead case if we if we can.

The patient got Biktarvy that was mailed from a

Turkish pharmacy.

What happened there?

So in some cases we do order some medications from some

other countries like Turkey.

They have a very sophisticated

track-and-trace policy for medications,

which in some regards is as good,

if not better than the United States.

Is Turkey a tier one country?

Turkey is not a tier one country,

but it is a sophisticated country.

In fact, Turkey is one of the world's largest

suppliers of counterfeit medicines,

according to the office of the U.S.

Trade Representative.

You've been in the health care industry for a long

time, so you know the Turkey is well known for being an

epicenter of counterfeit drugs.

Isn't that a concern of yours?

I mean, of course it's a concern.

However, we have a very strong vetting process.

AffordableRXMeds, whose label was on the Turkish

Biktarvy, is a prescription referral service located in

this nondescript Florida building,

which Santulli says he works with to obtain the

medications from overseas.

AffordableRXMeds did not respond to our request for

comment. Have you read the FDA guidelines?

Yes I have.

So then you will know that's what it says,

that it's illegal to import drugs that are widely

available in the United States.

It's actually legal to bring across drugs for a disease

for which there is no effective treatment known in

the United States.

It actually does say for personal use,

if you do bring, you can bring a drug into

the United States for personal use as long as you

have a prescription, no more than a 90 day

supply. Physicians watching you for the disease state

and the drug has been approved in the United

States. It's in it's in the documents.

The FDA tells us specifically,

we asked specifically about this business model,

and they told us it is illegal to import drugs that

are available and sold in the United States.

Those are exactly the drugs that you import.

Correct?

I have no comment.

You still think that what you are doing is a public

service? Is that right?

100%. We do a public service.

We help people get access to medications,

people who would not be able to take medications.

He says his own parents had taken medication shipped

from overseas for years with no problems.

Are you putting patients lives at risk?

If I was putting lives at risk,

I put my own parents at risk.

So, no, we're not putting at risk.

Unfortunately, sometimes there's bad actors out

there, and it does open up an opportunity for bad

actors. However, there's a lot of good actors

in this industry and my company is one of those.

AFP's tell us that they're doing a public service,

that without them, patients would not be able

to receive the medicines they or their family needs

because the choice is either use these medicines that

they receive from the AFP or not get medicine at all,

because they would have to pay for it out of pocket.

And that's not affordable.

What I tell my friends and family is that the most

expensive medicine that they could get is one that isn't

safe, isn't effective, or isn't high quality,

and doesn't meet the standards that are in FDA

approved medicines.

AFP's are not providing those measures to ensure

that patients are getting safe,

high quality and effective medicines.

Gilead also sued other companies connected to the

Biktarvy shipment.

In June, a judge issued a preliminary injunction

prohibiting the parties from importing Gilead

medications. Meritain and the other defendants are

appealing. CVS, Meritain's parent company,

told us it has long maintained a policy that it

does not support programs for non-FDA approved

medications sourced from outside the United States,

and does not contract with companies to facilitate the

importation of non-FDA approved medications.

It says it strongly disputes the allegations and is

vigorously defending itself against the complaint.

In late September, Gilead added CanaRX,

ElectRX and Script Sourcing to its lawsuit,

and the court also ordered them to immediately stop

sourcing Gilead medications from overseas while the case

is pending. CanaRX and Script Sourcing denied the

allegations. ElectRX declined to comment on the

case. The Turkish pharmacy did not respond to our

request for comment.

Santulli says without companies like RXValet,

patients couldn't afford the medicine they or their

families need.

We help people get access to drugs,

and we work with a lot of people that are are the

backbone of America, like bartenders and servers

through associations where they don't get access to

really rich health benefits,

where they get access to basic benefits.

And they don't have many medications on these plans.

But for organizations like the Cystic Fibrosis

Foundation, the price is too high.

Mary Dwight is senior vice president and chief policy

and advocacy officer.

The biggest concern is the patient is the pawn here.

The bottom line is that the person living with a

chronic, life threatening illness is being asked to

jump through all these hoops just to make sure they have

the treatments that they need.

These alternative funding programs seem to advertise

that they import these drugs.

It's on their websites.

They talk about it openly, but it's not legal.

How can it be such an open secret?

They're finding cracks and they're trying to expand the

gaps. And we do need more transparency on what's

happening, and we need a lot more cracking down to make

sure that people with CF or any other disease have the

gold standard protections and the high quality care

and treatment that we know they deserve and they

require.

The foundation is one of several nonprofits

representing patients with severe diseases,

which have been warning for years about the dangers of

these programs.

Why are we making individuals with a life

threatening disease, chronic illness,

be the guinea pigs for something that we thus far

have said is not the way we're going to go in US

health care? It's a broken system and we need to make

sure everyone is paying attention.