To fight high drug prices, Utah will pay for public employees to go fill prescriptions in Mexico

Amid a flurry of national proposals to bring exorbitant U.S. drug prices in line with other countries’ charges, one Utah insurer has a different option for patients:

Pay them to go to Mexico.

PEHP, which covers 160,000 public employees and family members, is offering plane tickets to San Diego, transportation to Tijuana, and a $500 cash payout to patients who need certain expensive drugs for multiple sclerosis, cancer and autoimmune disorders.

“That money is pretty small in comparison to the difference between U.S. prices and Mexico prices,” said Travis Tolley, clinical operations director for PEHP.

The insurer rolled out its “pharmacy tourism” option this fall in response to state legislation requiring state employees’ insurance plans to offer “savings rewards,” or cash incentives, to patients who choose cheaper providers.

PEHP is offering pharmacy tourism benefits for about a dozen drugs for which the price disparity between countries is vast. For example, Avonex, which treats MS, costs about $6,700 for a 28-day supply in the U.S., but about $2,200 through PEHP’s contracted clinic in Tijuana.

For three months’ supply — the maximum allowed under the program — the savings of $13,500 more than covers the $500 reward and transportation, typically less than $300 per person.

“Why wouldn’t we pay $300 to go to San Diego, drive across to Mexico and save the system tens of thousands of dollars?” asked state Rep. Norman Thurston, R-Provo, who sponsored the legislation calling for incentives. “If it can be done safely, we should be all over that.”

Patients who participate will fly to San Diego, be driven through a priority lane at the border crossing and arrive at a clinic, which PEHP director Chet Loftis described as “top-notch,” comparable to a Mayo or Cleveland clinic in the United States.

Medical tourism is not new; PEHP itself has previously offered coverage for out-of-country medical procedures. But without the cash incentives, patients haven’t used that option, Loftis said. Now that clients are eligible for up to $3,900 a year in reward payments for trips to Tijuana for procedures and drugs, Loftis said he hopes more will participate.

“It makes sense to not only pay for the cost,” he said, “but also to provide an incentive.”

The pharmacy tourism incentive is launching as Trump administration officials are focusing on the disparity between drug prices in the United States and in other countries. On Thursday, President Donald Trump announced a proposal focusing on the price of drugs under Medicare Part B, which covers cancer drugs and other drugs given to patients in hospitals. Federal law at present forbids Medicare from negotiating lower drug prices — a rule that Congress has resisted changing — but Trump proposed a trial that would limit Medicare payments for certain Part B drugs to prices closer to what other countries negotiate.

The experiment would apply only to half of Medicare recipients, in select areas of the country, and to some doctor-administered drugs.

For other insurers, like PEHP, the border may remain the closest shot at savings.

“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 U.S. and other countries? What’s going on?’” Thurston said. "Why wouldn’t we fly our employee to Mexico?”