Health insurer PEHP, which covers Utah's state employees and their families, is paying enrollees to travel to Mexico to purchase prescription drugs at lower prices than they could in the United States.
Download the executive's guide to complex pharmacy issues
How it works
According to the Salt Lake Tribune, a Utah law requires health insurers covering state employees to offer savings rewards or cash incentives to enrollees who seek care from lower-cost providers. Under that law, PEHP, which covers 160,000 of Utah's public employees and their family members, this fall began rewarding enrollees who seek lower-cost prescription drugs in Mexico.
Specifically, PEHP offers enrollees a no-cost plane ticket to San Diego and no-cost transportation from San Diego to Tijuana, Mexico, where enrollees visit a PEHP-contracted clinic and receive their prescription drugs. PEHP Director Chet Loftis said the clinic is "top-notch," and is comparable to Mayo Clinic and Cleveland Clinic, the Tribune reports.
In addition to covering enrollees' travel expenses, PEHP also offers enrollees that participate in the benefit a $500 cash payout. PEHP offers the benefit to enrollees who need costly prescription drugs for conditions such as certain autoimmune disorders, cancer, and multiple sclerosis (MS). The so-called "pharmacy tourism" benefit applies to nearly a dozen drugs that have significantly lower prices in Mexico than in the United States. For instance, the program covers the MS treatment Avonex, which for a 28-day supply costs about $6,700 in the United States, compared with about $2,200 through PEHP's contract with the Tijuana-based clinic.
Loftis said enrollees that qualify for the pharmacy tourism benefit are eligible for up to $3,900 in cash rewards annually. PHEHP allows enrollees to purchase a maximum of a three-month supply of prescription drugs at one time.
Loftis says program 'makes sense'
Loftis said PEHP in the past has covered the cost of patients undergoing medical procedures in foreign countries, but PHEP had never before offered enrollees a cash incentive to seek care or prescriptions outside of the United States. He said he hopes the cash incentive will encourage enrollees to take advantage of the new benefit. "It makes sense to not only pay for the cost [of the trip], but also to provide an incentive," he said.
Utah Rep. Norman Thurston (R), who sponsored the legislation that became the state law, said, "Why wouldn't we pay $300 to go to San Diego, drive across to Mexico, and save the system tens of thousands of dollars? If it can be done safely, we should be all over that." He continued, "When you start looking at the list at these higher-priced drugs people are taking, you think, 'How in the world can there be such a big price differential between the [United States] and other countries? What’s going on?' Why wouldn't we fly our employee to Mexico?" (Alberty, Salt Lake Tribune, 10/29; Baker, "Vitals," Axios, 10/30).
Next, access the executive's guide to all things pharmacy
Download these executive briefings on hot pharmacy topics to better understand increasingly complex pharmacy issues and the critical role pharmacy plays in overall health system success.