Every step is a struggle for Bruce Zimmerman, whose health has been deteriorating since he was diagnosed with multiple sclerosis eight years ago.
In 2019, Zimmerman said, his then-employer offered him a chance that sounded irresistible: He and his wife, Becky, could take all-expense-paid trips to the Cayman Islands and the Bahamas to retrieve the medication he needed, Avonex, a drug made by Biogen that currently retails within the U.S. for $2,159 per weekly dose. Through Florida-based PriceMDs, which paid for the couple’s travel, Zimmerman’s Avonex can be freed from charge.
PriceMDs is an element of a growing class of companies called alternative funding programs, or AFPs, which promise to attach patients with more-affordable options for accessing specialty medications that usually come at very high costs. AFPs contract with employer-sponsored health plans to supply coverage on specialty drugs.
While PriceMDs has taken the business model to a different level, flying patients akin to Zimmerman to other countries to bring back their drugs themselves, AFPs more typically obtain the medications overseas for significantly lower than what they cost in america and get them shipped on to patients. The savings can at times be so large that AFPs, not less than within the case of PriceMDs, can send patients on Caribbean trips and still generate profits.
“They stressed … to me: It’s the very same medication that I used to be taking on the time,” Zimmerman said. “I could not imagine what an awesome program it was.”
But AFPs include a significant catch: Federal authorities say importing medications intended for foreign markets is prohibited and will pose risks to patients’ health.
“These alternative funding programs are fulfilling prescriptions through unverified suppliers and online pharmacies, potentially illicit,” said Nicole Johnson, a special agent with Homeland Security Investigations, an agency throughout the Department of Homeland Security.
“And they don’t seem to be actually importing the drugs themselves,” she said. “The prescriptions are getting mailed on to the patients. Subsequently, Customs [U.S. Customs and Border Protection] has no idea what number of prescriptions have made it to U.S. residents, what number of have come from verified places.”
Johnson, who can be national program manager for the department’s National Mental Property Rights Coordination Center, told CNBC that Homeland Security has launched several criminal investigations into AFPs.
A CNBC investigation found AFPs have gotten more pervasive across the country as drug costs skyrocket. CNBC submitted nearly 100 public records requests and sorted through greater than 10,000 pages of contracts, emails, invoices and complaints that show these corporations have penetrated the country’s health-care system through private employers, cities, counties, school districts and unions. In some cases, employers are requiring their staff to make use of an AFP.
CNBC traced the trail of medicines from abroad to the U.S. via a supply chain that is not authorized by the pharmaceutical corporations that manufacture the medications.
“No patient, no American should ever need to be forced to take a drugs that is going to place their life in danger,” Johnson said, speaking for the primary time publicly about AFPs.
Nicole Johnson, special agent with Homeland Security Investigations.
CNBC
The AFPs defend their business practices as each legal and secure and say their businesses are an antidote to high prescription drug prices. Those prices, across all drugs, within the U.S. are nearly 3 times as much, on average, as those in other high-income countries, in accordance with a 2024 report by Rand, a nonprofit, nonpartisan research organization.
Greg Santulli, CEO of Georgia-based AFP Rx Valet, told CNBC he’s so confident within the medications his company sources that he felt comfortable together with his own parents doping up brought in from overseas for years, and he said they experienced no problems.
“If I used to be putting lives in danger, I put my very own parents in danger,” he said. “We’re committed to helping small and midsize American corporations [be] capable of afford medical insurance for his or her employees in an affordable manner.”
Employers who opt to make use of an AFP typically pay their staff’s health-care costs out of pocket. AFPs help reduce the fee of the most-expensive specialty drugs, akin to those to treat cancer and cystic fibrosis that may cost tons of of 1000’s of dollars a 12 months.
While not all AFPs import medicines from overseas, those that do promise outsized savings. The businesses charge employers fees or take a percentage of the savings.
Patients akin to Zimmerman typically do not know the total extent of how AFPs work, or that their medication could also be illegally crossing borders.
Zimmerman said he eventually left the employer that contracted with PriceMDs after his MS progressed to the purpose where he could not perform his job safely. Now, he says, his recent insurance doesn’t consistently cover his medication.
“I’m at risk of not having any of my medication in any respect. Not less than then I had the medication,” he said, of being within the PriceMDs program. “At one point you do not care if it’s illegal. If I might have been told that, I say, send me the ticket.”
Bruce Zimmerman and his wife, Becky.
CNBC
‘Sales pitch’ vs. safety?
AFPs are typically small, for-profit corporations and are situated across the U.S. They will not be often affiliated with insurance firms or employers directly, but quite are third-party vendors.
While there have been limited studies about AFPs, nobody is officially tracking their growth and overall impact on the health-care system. Within the last several years, as prescription drug prices have soared, more AFPs are opening up, documents show, and sourcing high-cost medications for a fraction of the value to patients in places including Canada, Australia and Turkey.
The savings often seem too good to pass up, but the method is not at all times straightforward.
A study of 260 patients using AFPs that was released in October by the Vanderbilt Health System Specialty Pharmacy Outcomes Research Consortium found the patients were experiencing significant barriers and delays in access to treatment. They waited a mean of 41 days to receive their medications, compared with 15 days for patients who didn’t use AFPs, in accordance with the study.
In a single case, a 34-year-old patient with Stage 4 colorectal cancer was told by an AFP that he had to acquire a passport and complete a telehealth visit with a global provider before receiving his medication, in accordance with the study. After a five-month delay, he finally got a three-month supply shipped from a global pharmacy, the study found.
Other patients said they were required to receive medicine from overseas or were switched to different drugs that worsened their conditions, in accordance with the Vanderbilt study.
“It is a sales pitch on the backs of the security of the patients. Patients take a security hit with the intention to save an employer money,” said Shabbir Imber Safdar, executive director of the Partnership for Secure Medicines, a coalition of nonprofit and pharmaceutical industry groups.
Shabbir Imber Safdar, executive director of the Partnership for Secure Medicines.
CNBC
Safdar said his organization has been investigating AFPs for the past two years and that it has found that about $5 million price of what he said was illegally imported medicine has been provided to patients previously two years. He said many AFPs have grown since the medications are supposedly sourced from trusted countries akin to Canada, the U.K. or Australia.
“They think, oh, Canadian medicine is secure, but you do not actually know if that medicine truly got here from Canada,” he said.
In a single instance, Safdar said, patients thought they were receiving Canadian drugs, however the fantastic print of the pharmacy’s website revealed it also allotted medications from “international success centers around the globe,” including in Turkey and India.
Turkey is one in all the world’s largest suppliers of counterfeit medicines, in accordance with the Office of america Trade Representative.
Even when patients read the fantastic print, they might not have the opportunity to opt out.
Emails obtained by CNBC through a public records request show that the town of Lebanon, Missouri, told government staff their medication “have to be obtained” through an AFP called SHARx. If employees didn’t use the SHARx program, their “high-cost medication will not be covered” and they’d be “required to pay the total price,” the e-mail said.
Town of Lebanon declined CNBC’s request for comment.
“It’s no selection in any respect,” Safdar said. “Patients are put in an inconceivable position, and it’s against the law that they are still paying health-care premiums, and yet they will not be getting FDA-approved medicine, legal medicine or secure medicine.”
In a press release to CNBC, SHARx cited the high cost of medication within the U.S. and said, “We help employees access the medications they need when their medications will not be covered by insurance.”
FDA drug seizures
The central query for AFPs is the legality of private importation of prescribed drugs into the U.S.
The U.S. Food and Drug Administration allows Americans to import medications for individual use if the drug isn’t available domestically. That is the idea on which the AFPs built their models for shipping medicines on to the patients.
But an FDA spokesman said in a press release to CNBC that “in most circumstances, an individual cannot import prescribed drugs from other countries into the U.S. … as substitutes for FDA-approved drugs.”
“Medicines from outside the legitimate U.S. drug supply chain do not need the identical assurance of safety, effectiveness, and quality as drugs subject to FDA oversight,” the spokesman added.
Leigh Verbois, who worked on the FDA for nearly 23 years — the last five as director of the agency’s Office of Drug Security, Integrity, and Response — said AFPs will not be covered by the agency’s personal importation policy.
Leigh Verbois, former director of the FDA’s Office of Drug Security, Integrity and Response.
CNBC
“If it is not approved or available clinically within the U.S., a person can obtain a product from a foreign source, assert that they’re importing that product for themselves, after which bring that product under a limited supply of 90 days into america,” said Verbois, who left the FDA in April.
Nevertheless, she said, “there is not any gray area when the product is approved in america and so they are being commercially purchased and brought into america.”
Verbois said she doubts most patients realize that the medications they’re getting will not be FDA-approved.
“I do not think the typical patient understands the complicated nature of the distribution practice that is happening,” she said.
In 2023, the FDA seized medication being shipped by a Canada-based AFP called CANARX, in accordance with an email sent to a patient that was obtained by CNBC.
The FDA wrote that it seized the medication for being potentially “misbranded” and “counterfeit” and said the patient didn’t “qualify to receive this medication under the non-public importation policy.”
The motion got here after a 2019 warning letter from the FDA to CANARX saying the corporate was operating “in a fashion that substitutes the FDA-approved drugs prescribed by the U.S. healthcare provider with unapproved drugs.”Â
In response to the warning, CANARX said it was not misleading patients but it surely did comply with stop importing drugs that must be administered by a physician, in accordance with the corporate’s general counsel, Joseph Morris.
Morris told CNBC the medication shipped to U.S. patients by CANARX comes from highly regulated, “tier one countries” akin to Canada, the U.K. and Australia, which he said have standards just like those within the U.S. for regulating prescribed drugs.
Joseph Morris, general counsel for CANARX.
CNBC
“Built into my client’s program are the security precautions that be certain that the medication is real, that it’s coming through a legitimate supply chain, that it’s coming from a recognized manufacturer, that it’s what the patient’s doctor is ordering to be delivered to that patient,” he said.
Exploiting ‘ambiguities’
Morris said there are “ambiguities” within the FDA’s rules around personal drug importation. He acknowledged the policy prohibits importing medications which can be available on the market within the U.S. but argued that affordability is a vital a part of access.
A drug could also be available within the U.S., he said, but when its price puts it out of reach for patients, availability becomes irrelevant, especially when the identical medication could be found just across the border in Canada for a fraction of the fee.
Morris said drug seizures like those conducted by the FDA in 2023 occur several times 1 / 4. He said he occasionally advises individual patients on reach out to U.S. Customs or the suitable agency, explaining who they’re and what the shipment comprises, with the intention to request the discharge of their medication. Typically, he said, the difficulty is resolved without difficulty.
He said the U.S. Department of Health and Human Services can grant waivers to individuals “on a case-by-case basis” for the importation of prescribed drugs.
Morris said CANARX contracts directly with the patient — not a government entity or private employer — so nobody is forced to just accept an imported drug.
CANARX’s patient contract requires customers to agree that they’ve purchased medications “internationally for private use” and that the title to the medication passes to the patient when it’s shipped. The agreement also says 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 in obtaining the prescription medications.”
CNBC showed Homeland Security’s Johnson a replica of the contract. She said it is a tactic to avoid responsibility.
“Even in the event that they write this in a contract, that does not imply that they don’t seem to be violating U.S. federal and state laws,” she said.
In 2023, the FDA also sent a warning letter to an AFP called ElectRx and Health Solutions.
The FDA letter said the corporate’s drug importation program “poses significant health risks to U.S. consumers.” The corporate responded in a press release posted to its website that its personal importation of medicines was legal.
ElectRx was offering medication from overseas through its personal importation program as recently as this 12 months, in accordance with drug listings on the corporate’s website viewed by CNBC. ElectRx and Health Solutions declined to comment for this text, and by October, after CNBC reached out, the corporate’s website had been taken offline.
The FDA spokesman, when asked why these AFPs are still allowed to operate, said the agency couldn’t comment on “ongoing compliance issues.”
The Caribbean connection
Bruce Zimmerman was one in all those patients who thought every part was fantastic, picking up his medication and flying it back to the U.S.
The Zimmermans, from St. Helena Island, South Carolina, took several trips to the Cayman Islands and the Bahamas through PriceMDs between 2019 and 2021. The corporate arrange the travel and all of the accommodations, the couple said.
“We tried to soak up all that we could,” Zimmerman said, describing his trips prior to his health deteriorating further. “We went swimming with stingrays. We went to Starfish Point. I went scuba diving, and I got a license so I could scuba dive, after which took three scuba diving trips.”
Every time, he said, the couple would bring back a three-month supply of medication. “When it was up, time to call them to get one other flight,” he said.
Zimmerman said he closely examined the medication he received and that the Avonex looked the exact same as what he had gotten at U.S. pharmacies. He also said he experienced unwanted effects just like what he was used to.
But Turkish Customs data analyzed by CNBC showed that PriceMDs has previously rerouted shipments of Avonex meant for one country to a different and sold it through unauthorized channels.
From 2020 to 2023, around the identical time the Zimmermans were making their Caribbean trips, PriceMDs sourced Avonex that originated in Germany, passed through Customs in Turkey via a Turkish exporter, then made its approach to the Cayman Islands, the Bahamas, Switzerland or america, in accordance with the Customs data.
Biogen, Avonex’s manufacturer, told CNBC this route is “not a part of Biogen’s authorized supply chain” and that it doesn’t have any “direct customers or ship-to locations in either the Cayman Islands or Bahamas.”
Since 2020, Turkish Customs data shows, PriceMDs has imported greater than 1,200 different drugs into the country, valued at greater than $2.7 million.
PriceMDs declined multiple requests to comment for this story.
When asked if he was concerned concerning the origin of the drugs provided by PriceMDs, Zimmerman — even knowing that the shipping routes might need been illegal — said he might still have taken the possibility.
“If I used to be faced with it, I might do it again,” he said. “It’s such a desperate thing to think that you simply won’t have your medication in any respect.”
‘A game of Russian roulette’
Last 12 months, when a Maryland HIV patient reported to his doctor that his medication, Gilead Sciences-made Biktarvy, was mailed from Turkey, with the bottle label and directions written in Turkish, the drugmaker traced the shipment back to Rx Valet.
The case ultimately involved an online of corporations across the health-care industry, and Gilead filed suit in December in U.S. District Court through attorney Geoffrey Potter of Patterson Belknap Webb & Tyler, a Latest York City-based law firm handling illegally diverted and counterfeit pharmaceutical cases.
Bottles of Biktarvy sourced from Turkey which can be at the middle of a Gilead lawsuit against AFPs.
CNBC
The corporate sued not only Rx Valet, for sourcing the medication from overseas, but in addition Meritain Health, which manages worker health plans and is an element of CVS Health-owned Aetna, in addition to several other corporations connected to the Biktarvy shipment. Meritain contracted with one in all the businesses that used Rx Valet to source the medications.
“As you may understand, receiving lifesaving medicine from a mysterious source in a language you may’t read was quite concerning. [The patient] didn’t know if the product was secure, real, and in order that they reported it to their health-care provider,” said Lori Mayall, who oversees anti-counterfeiting and product security at Gilead Sciences.
The corporate’s testing determined the medication was real Biktarvy but was intended to be sold in Turkey and never permitted to be shipped to the U.S., Mayall said.
She said that after a drug gets out of Gilead’s supply chain the corporate cannot guarantee that what’s in it “is secure and effective” for the patient.
“Each time you are taking a foreign medicine that is been delivered from overseas, you are playing a game of Russian roulette,” she said.
When asked concerning the high drug costs that Americans face, Mayall said that HIV medication akin to Biktarvy is fully covered within the U.S. for patients with insurance. Gilead has a free drug program for patients who do not have insurance, the corporate said.
“[AFPs are] promising savings, but they’re delivering risk,” she said. “And on the subject of prescription medicines, prioritizing cost over quality is dangerous.”
Rx Valet CEO Santulli said what his company is doing is each legal and secure.
“We’ve created an ecosystem that permits individuals to get monetary savings on high-cost medications, in addition to low-cost medications,” Santulli said. “We offer 1000’s of generic medications at really low price. And we also find ways to assist people get expensive medications, branded and specialty medications through various programs.”
Greg Santulli, Rx Valet CEO.
CNBC
He said Rx Valet obtains specialty medications from Canada, Australia and Latest Zealand, all “tier one” countries.
Judge’s injunctions
Like many AFPs, Rx Valet says importing drugs is legal under the FDA’s personal importation policy. When pressed further concerning the legality of importing medications which can be already available on the market in america, Santulli declined to comment further.
When asked concerning the Maryland patient who received Biktarvy that was intended on the market in Turkey, Santulli said Rx Valet does source medication from Turkey and that it’s a “modern, sophisticated country” able to tracking medications throughout its supply chain.
A spokesman for CVS Health, Meritain’s parent company, said it “has long maintained a policy that it doesn’t support programs for non-FDA-approved medications sourced from outside america and doesn’t contract with corporations to facilitate the importation of non-FDA-approved medications” from overseas.
The corporate said it “strongly disputes the allegations” made in Gilead’s lawsuit and is “vigorously defending itself against the grievance.”
In June, the judge within the case issued a preliminary injunction prohibiting the defendants from importing Gilead medications, writing: “The danger of harm to Gilead’s good will and popularity among the many patient and healthcare providing relevant community is stark and acute.”
All of the defendants have appealed the ruling.
The Turkish pharmacy that shipped the Biktarvy to the patient in Maryland didn’t reply to CNBC’s request for comment.
In September, Gilead added other AFPs — CANARX, ElectRx and a Florida-based company called ScriptSourcing — to the lawsuit. CANARX and ScriptSourcing denied the allegations, and ElectRX declined to comment on the case.
The judge issued one other preliminary injunction in October that prohibits the three corporations that were added to the lawsuit from shipping Gilead medications from overseas. The case is pending.
For the sake of the patient
The Cystic Fibrosis Foundation and other organizations say the value of AFPs is just too high.
The muse is one in all several nonprofit groups that represent patients with severe diseases and say they’ve been warning the FDA for years concerning the dangers of AFPs.
“The largest concern is the patient is the pawn here, right?” said Mary Dwight, senior vice chairman and chief policy and advocacy officer at the inspiration. “The underside line is that the person living with a chronic, life-threatening illness is being asked to leap through all these hoops simply to ensure they’ve the treatments that they need.”
Mary Dwight, senior vice chairman and chief policy and advocacy officer on the Cystic Fibrosis Foundation.
CNBC
Dwight said AFPs are “finding cracks” in the present foreign importation regulations and that more enforcement is required to stop these illegal practices.
The U.S. 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 AFPs. Given what it called these “significant dangers,” the committee directed the FDA to offer a “comprehensive report” on strengthen oversight.
Individually, in September, top executives of patient advocacy groups attended a bipartisan briefing on AFPs sponsored by U.S. Reps. Rick Allen, R-Ga., and Lucy McBath, D-Ga.
“Patients are put in a particularly difficult position,” McBath said in a press release. “They cannot go without their medication, however the potential overseas drug options carry their very own risks. … No patient should ever need to gamble with their health like that.”
Allen said in a press release, “These programs need greater scrutiny and stronger safeguards, which is why I led a bipartisan effort demanding more information on how these programs are being regulated, how patients are being protected, and the way employers can ensure they will not be being misled.”
“Why are we making individuals with a life-threatening disease, chronic illness be the guinea pigs for something that we to date have said isn’t the way in which we’ll go in U.S. health care?” Dwight asked. “It is a broken system, and we’d like to ensure everyone seems to be being attentive.”
— CNBC’s Alexandra Evans contributed to this report.
