Pharmacy, The Internet, And Expatriates

Risk & Insurance, Sept 16, 2001 by John Otrompke

The Internet can play a huge role in managing pharmacy benefits for employees working abroad--saving both employees and employers time and money.

Imagine an employee of a U.S. company assigned to work in another country for a lengthy assignment. Throughout his life, he suffered from a genetic enzyme disorder, the medication for which currently costs the health carrier $100,000 per year. The medication has a quick expiration, so it needs to be refrigerated.

When the employee gets to his overseas destination, he learns that there has been a problem with his medication. Although the pharmacy, located in the United States, prepared the package in dry ice, it was held up in customs for too long and is no longer any good.

Not only that, but the medication is not available in the country the employee has been assigned to. In the end, the employer has to foot the bill for a consultant to get the medication to the employee--at an astronomical cost.

This was precisely the case for an employee of a client of International SOS, a world assistance company for medical emergencies headquartered in Singapore, according to David Unkle, operations manager for the Americas region.

But industry leaders say the one tool that could solve problems like these--the Internet--is being downplayed as a solution. In fact, the Internet could greatly facilitate the movement of pharmaceuticals from one part of the globe to the other, they say.

"Insurers offering expatriate health plans will be forced to use the Internet as a component in the future," says Greg Lehman, president and CEO of the National Business Coalition on Health in Washington. "That's becoming the new wave of filling prescriptions." Lehman said that, in addition to procurement advantages, Internet usage combined with mail order yields a cost savings of 10 percent to 25 percent over standard pharmacies.

Professor John Blum at Loyola University of Chicago College of Law, agrees that international trade in pharmaceuticals appears to be growing. "There is a crack in the armament, and with the Internet, that crack is magnified 100 times," he says. "Consumers no longer need to take a trip to get medications, they can just click on (the computer). I have to believe that a consortium of employers is looking at this."

Although insurers such as Philadelphia-based Cigna and Chicago-based CNA are getting systems in place to provide more pharmaceuticals to expatriates, for now they are leaving the Internet in a secondary role. International consumers can access Cigna's Web site to check claims status, for example.

Also online is another component expected to lead to big savings in the future, plan design (see sidebar on page 30). Beneficiaries can access translation tables to determine what a drug is called in different countries. In addition, Cigna will be bringing an international network of credentialed hospitals online within the next 12 months, according to Jenny Hollis, vice president for sales and marketing at Cigna International Expatriate Benefits.

Other resources available online include a list of English-speaking pharmacies around the world, as well as drug lexicons.

"The Internet can allow International SOS to store electronic prescriptions for expatriates, activating the international pharmacy," says Unkle. "Many countries have requirements for importation licenses. The expatriate has to fill out the license and request permission to have the medication shipped in." Unkle says that this function probably can be carried out electronically in the future.

For example, Unkle says, workers in Japan must complete such an application, called a "yakkanshomei." The application must be filled out in two languages. "With the Internet technology, we could have the document remotely completed in English, but International SOS has a Japanese language staff to translate as well," he says.

Although insurers may be phrasing the international pharmacy issue in terms of serving expatriates and downplaying the Internet's role, there can be no doubt that companies are gearing up and connecting with longstanding players in this field, international assistance companies like GlobalCare Inc. in Alpharetta, Ga., and International SOS, which started out working only with emergency situations.

Cigna currently offers coverage to 115,000 expatriates and their families.

These preparations may make good sense, considering the passage recently in the House of Representatives of proposed legislation allowing U.S. citizens to buy drugs from overseas. But for now, the systems in place for international pharmaceuticals procurement are rather primitive. According to a survey recently compiled by Cigna, World at Work, and the National Trade Council, two-third of executives said that while their expatriate employees have access to the company intranet, only 20 percent reported that their Web site has a section specifically for expatriates. Internet functions heavily feature e-mail, but little other infrastructure.

Even the use of mail-order pharmacy is restricted in international settings, depending on what country the expatriate is working in. "With certain exceptions, pharmacy benefits managers (PBMs) cannot ship outside the borders of the U.S.," says Michael Gagnon, chief of the insurance section of the Inter American Development Bank, which provides coverage for 1,500 employees and relatives living overseas via Cigna. "We have the capability to put in a mail-order over the Internet, and you can send it via a third-party overseas. Some specialty pharmaceutical providers are legally able to do it. Otherwise, people have their relatives pick up the medication and send them out."