Utah is pioneering an alternative for its state employees to address soaring prescription drug prices.

The Pharmacy Tourism Program, a part of the Utah Public Employees Health Program (PEHP), allows certain members with high-cost medicines to fill their prescription in Vancouver, Canada, and Tijuana, Mexico, where medication comes at a much lower cost. The initiative even pays for members’ flights.

The cost of international airfare to get drugs available in the U.S. may sound expensive. But PEHP managing director Chet Loftis says the program has saved the nonprofit around $250,000 since just last year when it started.

“There are certain drugs that cost an awful lot of money. We're talking about $50,000 for a year,” Loftis says. “And in those situations, the variance between the cost of the drug here in the United States and what's available either in Canada or Mexico is such that it makes economic sense for us to be able to send them to those locations.”

So much economic sense, says Loftis, that the PEHP gives eligible members $500 cash back when they choose to participate in the program.

But the so-called pharmacy tourism isn’t open to all public employees or even all PEHP members. Loftis says the ratio of people who are eligible for the program versus those the PEHP serves in total is about 1 to 400. The program is meant to benefit public employees with serious chronic conditions like rheumatoid arthritis and multiple sclerosis.

Interview Highlights

On how the program came about

“Medical tourism isn't anything that's new. We had some experience with respect to medical tourism in terms of working with one of our larger employer clients that's a city here in the Utah area. And so we became familiar with what the options were, what the cost structure was, those kinds of things. And then we had a bill passed in the Utah legislature a couple years ago. It specifically directed us as the health plan for the state to share savings with employees when they made health care decisions that reduce costs. And it caused us to think about the pharmaceutical space where the costs are very, very high, particularly for these kinds of drugs.

“... That's when it all came together for us in terms of seeing how this would work. We only pay on this program through our vendor that we use, if somebody goes. So it's not like we've had to create a constant stream of money to make the program work. It just works as we send people there. And we think it's important to give people choice and again, to be able to share savings under the legislation that was passed.”

On the safety of filling prescriptions abroad

“Every country has a process for what we call chain of custody. We have the ability to be able to check that chain of custody through our vendor and through ourselves. And so there is a very specific process that that it goes through. And the good news for Americans, of course, is that this is a drug that the FDA has approved for these purposes, and it is exactly the same drug.

On what drugs and members are eligible for pharmacy tourism

“They’re specialty drugs, biologics is what we call them. They deal with rheumatoid arthritis, MS and other conditions like that.

“There's only a handful of people that are eligible for the program. And the program is still relatively new. We've been doing it for about a year now. There's about 400 people in our total pool of people that we cover over at both state and other public employees here in Utah. We care about 160,000 people and there's probably one in 400 that are eligible for the travel.”

Chris Bentley produced and edited this interview for broadcast with Kathleen McKenna. Lynsey Jeffery adapted it for the web.