(Bloomberg) — This is how far one Express Scripts Holding Co. (Nasdaq:ESRX) executive was willing to go to secure inexpensive versions of Gilead Sciences Inc.'s hepatitis C drug Sovaldi, unavailable to U.S. consumers under federal drug import and patent laws.
His plan: Dock a cruise ship flying an Indian flag off the coast of Miami. Stock the ship with versions of Sovaldi sold in India for $83,000 less than the U.S. retail price for 12 weeks of treatment. Ferry U.S. patients to the boat and send them home with the potentially life-saving medicines at a huge discount.
The only wrinkle in his plan wasn't the absurdity of a pharmacy benefit manager (PBM) manning and operating a cruise ship full of drugs from India. The problem, after doing some quick research into the idea, was that it would probably violate U.S. drug re-importation laws that limit the value of drugs brought into the country to $1,500 — the price of one and a half Sovaldi tablets in the U.S., said Steve Miller, chief medical officer at Express Scripts, who came up with the idea.
"I was trying to be as creative as possible," Miller said in an interview. "This is what the market is demanding, this level of creativity that almost borders on the ridiculous."
Miller quickly dropped the drug boat scheme, but he says he is still searching for creative ways to save money on the $84,000 Sovaldi, which Express Scripts stopped covering for many patients this year because of the cost. He isn't alone. A cottage industry of drug distributors, medical tourism agencies and consultants is emerging to offer patients in the U.S. and other developed countries cheap copies of Sovaldi from countries where it is sold for 1 percent of the U.S. price.
Control costs
Patients in the U.S. and Europe have struggled to get access to the drug after insurers and governments limited its use to the sickest patients to control costs, leaving the rest waiting while the virus attacks and scars their liver. Employers have warned that the cost of covering the drug could be a financial catastrophe. The Southeastern Pennsylvania Transportation Authority, for instance, said it spent almost $3 million on Sovaldi last year for its employees and retirees, according to a lawsuit it filed against Gilead (Nasdaq:GILD) over the price.
Meanwhile, a group of generic drugmakers are licensed to sell copies of Sovaldi in 91 mostly low-income countries, and this year began selling it in India for about $900 for a 12-week regimen under an agreement with Gilead intended to help patients in the poorest countries get access to the medication.
While Americans have crossed the border to Canada for years to get access to low-cost drugs or traveled to the Caribbean for cheap surgeries, the high price of Sovaldi combined with the demand from patients is creating an extreme form of medical tourism. There are 3.2 million people in the U.S. with chronic hepatitis C. Sovaldi, which has been on the market in the U.S. for less than two years, has shown to cure at least 90 percent of people of the liver-destroying virus.
High interest
"I know people who have hepatitis C and the only thing they can think about is getting this drug," said Jonathan Edelheidt, chief executive officer of the Palm Beach Gardens, Florida-based Medical Tourism Association, who said his group's members are gearing up to help patients start traveling to lower-cost countries to buy the drug. "There is definitely a high interest in going abroad."
Leena Menghaney, a lawyer working with patients to gain affordable access to hepatitis drugs, said the current situation reminds her of the early days of the AIDS epidemic when patients from South Africa were traveling to Thailand or India for antiviral drugs.
The demand is "coming from countries where treatment is being rationed and patients are waiting in line for treatment in the public health care system, or their insurance doesn't cover it, and they are desperate to get on to treatment," Menghaney said.
Overseas trip
Health Flight Solutions, an Orlando, Florida, company that provides technology services to medical tourism agencies, is putting together a network of foreign doctors and hospitals willing to prescribe the drug to U.S. patients, said CEO Anuja Agrawal. She said her company is working with the generic manufacturers to verify that the hospitals in her network aren't getting counterfeit drugs.
"We have already seen some movement, but I think we are going to see an explosion over the next several months," Agrawal said.
Greg Jefferys, a 61-year-old historian from Australia, is one of those who has already made the trip. Jefferys' doctor told him the government wouldn't subsidize the cost of Sovaldi for him because his disease wasn't advanced enough. He'd have to wait until the virus further scarred his liver or pay the retail price of nearly $90,000.
It was money he didn't have and he didn't want to get any sicker so when a friend mentioned to him that the drug was being sold for much less in India, he immediately booked a trip there.
Modern facility
When he landed earlier this month, a mutual acquaintance in India referred him to a doctor at Apollo Hospital in Chennai, a gleaming, modern facility that specialized in treating patients from overseas, he said. The doctor he saw was trained in the U.K. and had practiced for years in London. He charged $20 for the appointment.
To buy the drugs, his doctor referred him to a drug distributor who works for Mylan NV, one of the licensed generic manufacturers. The distributor, located on the top floor of a house with boxes scattered about, sold him the full course of treatment for $1,000 — the price of one pill in Australia and the U.S. The flight, hotel and transportation were an additional $2,000.
Jefferys said he has no doubt he got the actual drug, not a counterfeit, and will find out for sure when he gets his viral load checked in a few days. Since writing about his experience on his blog, he said he has been getting inundated with e-mails from patients around the world asking how they can do the same after being denied the drug in their home country.
See also: The real cost of medical tourism
"What are your choices? One is to wait for the liver to get cirrhosis and get real sick or go to India and get the medication," he said. "The whole thing for me was $3,000. You'd spend that on an old car — that isn't a lot of money to pay to get your health back."
