Cheaper medicines, free beach trips: U.S. health plans tap prescriptions that feds say are illegal

Every measurement is simply a conflict for Bruce Zimmerman, whose wellness has been deteriorating since helium was diagnosed with aggregate sclerosis 8 years ago.

In 2019, Zimmerman said, his then-employer offered him an accidental that sounded irresistible: He and his wife, Becky, could instrumentality all-expense-paid trips to the Cayman Islands and the Bahamas to retrieve the medicine helium needed, Avonex, a cause made by Biogen that presently retails successful the U.S. for $2,159 per play dose. Through Florida-based PriceMDs, which paid for the couple's travel, Zimmerman's Avonex would beryllium escaped of charge.

PriceMDs is portion of a increasing people of businesses called alternate backing programs, oregon AFPs, which committedness to link patients with more-affordable options for accessing specialty medications that often travel astatine precise precocious costs. AFPs declaration with employer-sponsored wellness plans to connection sum connected specialty drugs.

While PriceMDs has taken the concern exemplary to different level, flying patients specified arsenic Zimmerman to different countries to bring backmost their drugs themselves, AFPs much typically get the medications overseas for importantly little than what they outgo successful the United States and get them shipped straight to patients. The savings tin astatine times beryllium truthful ample that AFPs, astatine slightest successful the lawsuit of PriceMDs, tin nonstop patients connected Caribbean trips and inactive marque money.

"They stressed ... to me: It's the nonstop aforesaid medicine that I was taking astatine the time," Zimmerman said. "I couldn't judge what an awesome programme it was."

But AFPs travel with a large catch: Federal authorities accidental importing medications intended for overseas markets is amerciable and could airs risks to patients' health.

"These alternate backing programs are fulfilling prescriptions done unverified suppliers and online pharmacies, perchance illicit," said Nicole Johnson, a peculiar cause with Homeland Security Investigations, an bureau wrong the Department of Homeland Security.

"And they're not really importing the drugs themselves," she said. "The prescriptions are getting mailed straight to the patients. Therefore, Customs [U.S. Customs and Border Protection] has nary thought however galore prescriptions person made it to U.S. citizens, however galore person travel from verified places."

Johnson, who is besides nationalist programme manager for the department's National Intellectual Property Rights Coordination Center, told CNBC that Homeland Security has launched respective transgression investigations into AFPs.

A CNBC probe recovered AFPs are becoming much pervasive astir the state arsenic cause costs skyrocket. CNBC submitted astir 100 nationalist records requests and sorted done much than 10,000 pages of contracts, emails, invoices and complaints that amusement these companies person penetrated the country's health-care strategy done backstage employers, cities, counties, schoolhouse districts and unions. In immoderate cases, employers are requiring their unit to usage an AFP.

CNBC traced the way of medications from overseas to the U.S. via a proviso concatenation that's not authorized by the pharmaceutical companies that manufacture the medications.

"No patient, nary American should ever person to beryllium forced to instrumentality a medicine that's going to enactment their beingness astatine risk," Johnson said, speaking for the archetypal clip publically astir AFPs.

The AFPs support their concern practices arsenic some ineligible and harmless and accidental their businesses are an antidote to precocious medicine cause prices. Those prices, crossed each drugs, successful the U.S. are astir 3 times arsenic much, connected average, arsenic those successful different high-income countries, according to a 2024 report by Rand, a nonprofit, nonpartisan probe organization.

Greg Santulli, CEO of Georgia-based AFP Rx Valet, told CNBC he's truthful assured successful the medications his institution sources that helium felt comfy with his ain parents taking drugs brought successful from overseas for years, and helium said they experienced nary problems.

"If I was putting lives astatine risk, I enactment my ain parents astatine risk," helium said. "We're committed to helping tiny and midsize American companies [be] capable to spend wellness security for their employees successful a tenable manner."

Employers who opt to usage an AFP typically wage their staff's health-care costs retired of pocket. AFPs assistance trim the outgo of the most-expensive specialty drugs, specified arsenic those to dainty crab and cystic fibrosis that tin outgo hundreds of thousands of dollars a year.

While not each AFPs import medicines from overseas, the ones that bash committedness outsized savings. The companies complaint employers fees oregon instrumentality a percent of the savings.

Patients specified arsenic Zimmerman typically don't cognize the afloat grade of however AFPs work, oregon that their medicine whitethorn beryllium illegally crossing borders.

Zimmerman said helium yet near the leader that contracted with PriceMDs aft his MS progressed to the constituent wherever helium could nary longer execute his occupation safely. Now, helium says, his caller security doesn't consistently screen his medication.

"I'm successful information of not having immoderate of my medicine astatine all. At slightest past I had the medication," helium said, of being successful the PriceMDs program. "At 1 constituent you don't attraction if it's illegal. If I would person been told that, I say, nonstop maine the ticket."

AFPs are typically small, for-profit companies and are located crossed the U.S. They are not usually affiliated with security companies oregon employers directly, but alternatively are third-party vendors.

While determination person been constricted studies astir AFPs, nary 1 is officially tracking their maturation and wide interaction connected the health-care system. In the past respective years, arsenic medicine cause prices person soared, much AFPs are opening up, documents show, and sourcing high-cost medications for a fraction of the terms to patients successful places including Canada, Australia and Turkey.

The savings often look excessively bully to walk up, but the process isn't ever straightforward.

A survey of 260 patients utilizing AFPs that was released successful October by the Vanderbilt Health System Specialty Pharmacy Outcomes Research Consortium recovered the patients were experiencing important barriers and delays successful entree to treatment. They waited an mean of 41 days to person their medications, compared with 15 days for patients who did not usage AFPs, according to the study.

In 1 case, a 34-year-old diligent with Stage 4 colorectal crab was told by an AFP that helium had to get a passport and implicit a telehealth sojourn with an planetary supplier earlier receiving his medication, according to the study. After a five-month delay, helium yet got a three-month proviso shipped from an planetary pharmacy, the survey found.

Other patients said they were required to person medicine from overseas oregon were switched to antithetic drugs that worsened their conditions, according to the Vanderbilt study.

"It's a income transportation connected the backs of the information of the patients. Patients instrumentality a information deed successful bid to prevention an leader money," said Shabbir Imber Safdar, enforcement manager of the Partnership for Safe Medicines, a conjugation of nonprofit and pharmaceutical manufacture groups.

Safdar said his enactment has been investigating AFPs for the past 2 years and that it has recovered that astir $5 cardinal worthy of what helium said was illegally imported medicine has been provided to patients successful the past 2 years. He said galore AFPs person grown due to the fact that the medications are supposedly sourced from trusted countries specified arsenic Canada, the U.K. oregon Australia.

"They think, oh, Canadian medicine is safe, but you don't really cognize if that medicine genuinely came from Canada," helium said.

In 1 instance, Safdar said, patients thought they were receiving Canadian drugs, but the good people of the pharmacy's website revealed it besides dispensed medications from "international fulfillment centers astir the world," including successful Turkey and India.

Turkey is 1 of the world's largest suppliers of counterfeit medicines, according to the Office of the United States Trade Representative.

Even if patients work the good print, they whitethorn not beryllium capable to opt out.

Emails obtained by CNBC done a nationalist records petition amusement that the metropolis of Lebanon, Missouri, told authorities unit their medicine "must beryllium obtained" done an AFP called SHARx. If employees did not usage the SHARx program, their "high-cost medicine volition nary longer beryllium covered" and they would beryllium "required to wage the afloat price," the email said.

The metropolis of Lebanon declined CNBC's petition for comment.

"It's nary prime astatine all," Safdar said. "Patients are enactment successful an intolerable position, and it's a transgression that they're inactive paying health-care premiums, and yet they are not getting FDA-approved medicine, ineligible medicine oregon harmless medicine."

In a connection to CNBC, SHARx cited the precocious outgo of drugs successful the U.S. and said, "We assistance employees entree the medications they request erstwhile their medications are not covered by insurance."

The cardinal question for AFPs is the legality of idiosyncratic importation of medicine drugs into the U.S.

The U.S. Food and Drug Administration allows Americans to import medications for idiosyncratic usage if the cause is not disposable domestically. That's the ground connected which the AFPs built their models for shipping medicines straight to the patients.

But an FDA spokesperson said successful a connection to CNBC that "in astir circumstances, a idiosyncratic cannot import medicine drugs from different countries into the U.S. ... arsenic substitutes for FDA-approved drugs."

"Medicines from extracurricular the morganatic U.S. cause proviso concatenation bash not person the aforesaid assurance of safety, effectiveness, and prime arsenic drugs taxable to FDA oversight," the spokesperson added.

Leigh Verbois, who worked astatine the FDA for astir 23 years — the past 5 arsenic manager of the agency's Office of Drug Security, Integrity, and Response — said AFPs are not covered by the agency's idiosyncratic importation policy.

"If it's not approved oregon disposable clinically successful the U.S., an idiosyncratic tin get a merchandise from a overseas source, asseverate that they are importing that merchandise for themselves, and past bring that merchandise nether a constricted proviso of 90 days into the United States," said Verbois, who near the FDA successful April.

However, she said, "there's nary grey country erstwhile the merchandise is approved successful the United States and they are being commercially purchased and brought into the United States."

Verbois said she doubts astir patients recognize that the medications they're getting are not FDA-approved.

"I don't deliberation the mean diligent understands the analyzable quality of the organisation signifier that's happening," she said.

In 2023, the FDA seized medicine being shipped by a Canada-based AFP called CANARX, according to an email sent to a diligent that was obtained by CNBC.

The FDA wrote that it seized the medicine for being perchance "misbranded" and "counterfeit" and said the diligent did not "qualify to person this medicine nether the idiosyncratic importation policy."

The enactment came aft a 2019 informing letter from the FDA to CANARX saying the institution was operating "in a mode that substitutes the FDA-approved drugs prescribed by the U.S. healthcare supplier with unapproved drugs." 

In effect to the warning, CANARX said it was not misleading patients but it did hold to halt importing drugs that request to beryllium administered by a doctor, according to the company's wide counsel, Joseph Morris.

Morris told CNBC the medicine shipped to U.S. patients by CANARX comes from highly regulated, "tier 1 countries" specified arsenic Canada, the U.K. and Australia, which helium said person standards akin to those successful the U.S. for regulating medicine drugs.

Morris said determination are "ambiguities" successful the FDA's rules astir idiosyncratic cause importation. He acknowledged the argumentation prohibits importing medications that are disposable for merchantability successful the U.S. but argued that affordability is simply a important portion of access.

A cause whitethorn beryllium disposable successful the U.S., helium said, but if its terms puts it retired of scope for patients, availability becomes irrelevant, particularly erstwhile the aforesaid medicine tin beryllium recovered conscionable crossed the borderline successful Canada for a fraction of the cost.

Morris said cause seizures similar those conducted by the FDA successful 2023 hap respective times a quarter. He said helium occasionally advises idiosyncratic patients connected however to scope retired to U.S. Customs oregon the due agency, explaining who they are and what the shipment contains, successful bid to petition the merchandise of their medication. In astir cases, helium said, the contented is resolved without problems.

He said the U.S. Department of Health and Human Services tin assistance waivers to individuals "on a case-by-case basis" for the importation of medicine drugs.

Morris said CANARX contracts straight with the diligent — not a authorities entity oregon backstage employer — truthful nary 1 is forced to judge an imported drug.

CANARX's diligent declaration requires customers to hold that they person purchased medications "internationally for idiosyncratic use" and that the rubric to the medicine passes to the diligent erstwhile it is shipped. The statement besides says patients indispensable "release the program holder, its officers, employees, agents, heirs" from "any and each causes of actions with respect to errors oregon omissions by CANARX successful obtaining the medicine medications."

CNBC showed Homeland Security's Johnson a transcript of the contract. She said it's a maneuver to debar responsibility.

"Even if they constitute this successful a contract, that doesn't mean that they're not violating U.S. national and authorities laws," she said.

In 2023, the FDA besides sent a warning letter to an AFP called ElectRx and Health Solutions.

The FDA missive said the company's cause importation programme "poses important wellness risks to U.S. consumers." The institution responded successful a connection posted to its website that its idiosyncratic importation of medicines was legal.

ElectRx was offering medicine from overseas done its idiosyncratic importation programme arsenic precocious arsenic this year, according to cause listings connected the company's website viewed by CNBC. ElectRx and Health Solutions declined to remark for this article, and by October, aft CNBC reached out, the company's website had been taken offline.

The FDA spokesman, erstwhile asked wherefore these AFPs are inactive allowed to operate, said the bureau could not remark connected "ongoing compliance issues."

Bruce Zimmerman was 1 of those patients who thought everything was fine, picking up his medicine and flying it backmost to the U.S.

The Zimmermans, from St. Helena Island, South Carolina, took respective trips to the Cayman Islands and the Bahamas done PriceMDs betwixt 2019 and 2021. The institution acceptable up the question and each the accommodations, the mates said.

"We tried to instrumentality successful each that we could," Zimmerman said, describing his trips anterior to his wellness deteriorating further. "We went swimming with stingrays. We went to Starfish Point. I went scuba diving, and I got a licence truthful I could scuba dive, and past took 3 scuba diving trips."

Each time, helium said, the mates would bring backmost a three-month proviso of medication. "When it was up, clip to telephone them to get different flight," helium said.

Zimmerman said helium intimately examined the medicine helium received and that the Avonex looked precisely the aforesaid arsenic what helium had gotten astatine U.S. pharmacies. He besides said helium experienced broadside effects akin to what helium was utilized to.

But Turkish Customs information analyzed by CNBC showed that PriceMDs has antecedently rerouted shipments of Avonex meant for 1 state to different and sold it done unauthorized channels.

From 2020 to 2023, astir the aforesaid clip the Zimmermans were making their Caribbean trips, PriceMDs sourced Avonex that originated successful Germany, passed done Customs successful Turkey via a Turkish exporter, past made its mode to the Cayman Islands, the Bahamas, Switzerland oregon the United States, according to the Customs data.

Biogen, Avonex's manufacturer, told CNBC this way is "not portion of Biogen's authorized proviso chain" and that it does not person immoderate "direct customers oregon ship-to locations successful either the Cayman Islands oregon Bahamas."

Since 2020, Turkish Customs information shows, PriceMDs has imported much than 1,200 antithetic drugs into the country, valued astatine much than $2.7 million.

PriceMDs declined aggregate requests to remark for this story.

When asked if helium was acrophobic astir the root of the drugs provided by PriceMDs, Zimmerman — adjacent knowing that the shipping routes mightiness person been amerciable — said helium mightiness inactive person taken the chance.

"If I was faced with it, I would bash it again," helium said. "It's specified a hopeless happening to deliberation that you mightiness not person your medicine astatine all."

Last year, erstwhile a Maryland HIV diligent reported to his doc that his medication, Gilead Sciences-made Biktarvy, was mailed from Turkey, with the vessel statement and instructions written successful Turkish, the drugmaker traced the shipment backmost to Rx Valet.

The lawsuit yet progressive a web of companies crossed the health-care industry, and Gilead filed suit successful December successful U.S. District Court done lawyer Geoffrey Potter of Patterson Belknap Webb & Tyler, a New York City-based instrumentality steadfast handling illegally diverted and counterfeit pharmaceutical cases.

The institution sued not lone Rx Valet, for sourcing the medicine from overseas, but besides Meritain Health, which manages worker wellness plans and is portion of CVS Health-owned Aetna, arsenic good arsenic respective different companies connected to the Biktarvy shipment. Meritain contracted with 1 of the companies that utilized Rx Valet to root the medications.

"As you tin understand, receiving lifesaving medicine from a mysterious root successful a connection you can't work was rather concerning. [The patient] did not cognize if the merchandise was safe, genuine, and truthful they reported it to their health-care provider," said Lori Mayall, who oversees anti-counterfeiting and merchandise information astatine Gilead Sciences.

The company's investigating determined the medicine was existent Biktarvy but was intended to beryllium sold successful Turkey and not permitted to beryllium shipped to the U.S., Mayall said.

She said that erstwhile a cause gets retired of Gilead's proviso concatenation the institution cannot warrant that what's successful it "is harmless and effective" for the patient.

"Every clip you're taking a overseas medicine that's been delivered from overseas, you're playing a crippled of Russian roulette," she said.

When asked astir the precocious cause costs that Americans face, Mayall said that HIV medicine specified arsenic Biktarvy is afloat covered successful the U.S. for patients with insurance. Gilead has a escaped cause programme for patients who don't person insurance, the institution said.

"[AFPs are] promising savings, but they're delivering risk," she said. "And erstwhile it comes to medicine medicines, prioritizing outgo implicit prime is dangerous."

Rx Valet CEO Santulli said what his institution is doing is both legal and safe.

"We person created an ecosystem that allows individuals to prevention wealth connected high-cost medications, arsenic good arsenic low-cost medications," Santulli said. "We supply thousands of generic medications astatine truly debased cost. And we besides find ways to assistance radical get costly medications, branded and specialty medications done assorted programs."

Like galore AFPs, Rx Valet says importing drugs is ineligible nether the FDA's idiosyncratic importation policy. When pressed further astir the legality of importing medications that are already disposable for merchantability successful the United States, Santulli declined to remark further.

When asked astir the Maryland diligent who received Biktarvy that was intended for merchantability successful Turkey, Santulli said Rx Valet does root medicine from Turkey and that it is simply a "modern, blase country" susceptible of tracking medications passim its proviso chain.

A spokesperson for CVS Health, Meritain's genitor company, said it "has agelong maintained a argumentation that it does not enactment programs for non-FDA-approved medications sourced from extracurricular the United States and does not declaration with companies to facilitate the importation of non-FDA-approved medications" from overseas.

The institution said it "strongly disputes the allegations" made successful Gilead's suit and is "vigorously defending itself against the complaint."

In June, the justice successful the lawsuit issued a preliminary injunction prohibiting the defendants from importing Gilead medications, writing: "The hazard of harm to Gilead's bully volition and estimation among the diligent and healthcare providing applicable assemblage is stark and acute."

All the defendants person appealed the ruling.

The Turkish pharmacy that shipped the Biktarvy to the diligent successful Maryland did not respond to CNBC's petition for comment.

In September, Gilead added different AFPs — CANARX, ElectRx and a Florida-based institution called ScriptSourcing — to the lawsuit. CANARX and ScriptSourcing denied the allegations, and ElectRX declined to remark connected the case.

The justice issued different preliminary injunction successful October that prohibits the 3 companies that were added to the suit from shipping Gilead medications from overseas. The lawsuit is pending.

The Cystic Fibrosis Foundation and different organizations accidental the terms of AFPs is excessively high.

The instauration is 1 of respective nonprofit groups that correspond patients with terrible diseases and accidental they person been informing the FDA for years astir the dangers of AFPs.

"The biggest interest is the diligent is the pawn here, right?" said Mary Dwight, elder vice president and main argumentation and advocacy serviceman astatine the foundation. "The bottommost enactment is that the idiosyncratic surviving with a chronic, life-threatening unwellness is being asked to leap done each these hoops conscionable to marque definite they person the treatments that they need."

Dwight said AFPs are "finding cracks" successful the existing overseas importation regulations and that much enforcement is needed to halt these amerciable practices.

The U.S. House Appropriations Committee successful June said it has "deep interest implicit the wellness risks posed by amerciable importation of unapproved and misbranded drugs," peculiarly done AFPs. Given what it called these "significant dangers," the committee directed the FDA to supply a "comprehensive report" connected however to fortify oversight.

Separately, successful September, apical executives of diligent advocacy groups attended a bipartisan briefing connected AFPs sponsored by U.S. Reps. Rick Allen, R-Ga., and Lucy McBath, D-Ga.

"Patients are enactment successful an highly hard position," McBath said successful a statement. "They can't spell without their medication, but the imaginable overseas cause options transportation their ain risks. ... No diligent should ever person to gamble with their wellness similar that."

Allen said successful a statement, "These programs request greater scrutiny and stronger safeguards, which is wherefore I led a bipartisan effort demanding much accusation connected however these programs are being regulated, however patients are being protected, and however employers tin guarantee they are not being misled."

"Why are we making individuals with a life-threatening disease, chronic unwellness beryllium the guinea pigs for thing that we frankincense acold person said is not the mode we're going to spell successful U.S. wellness care?" Dwight asked. "It's a breached system, and we request to marque definite everyone is paying attention."

— CNBC's Alexandra Evans contributed to this report.