http://www.post-gazette.com/news/health/2017/06/19
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Posted On: 07/16/2017 4:54:01 PM
http://www.post-gazette.com/news/health/2017/...1706130002
June 18 2017
Secondary market arises for diabetes test strips
Five words in a recent classified ad revealed that a secondary market for lower-priced diabetes test strips is reaching into the greater Pittsburgh area.
“I Buy Diabetic Test Strips!” the ad in the Pittsburgh Post-Gazette declared, with an 800-number and requirements that boxes be unopened and strips be unexpired.
The secondary purchase and resale of test strips, typically advertised through Craigslist, is centered for now in Michigan, with several ads showing up in eastern West Virginia and western Maryland.
With retail prices for test strips as high as $1.79 each, the so-called black or gray market finds people selling excess strips to buyers, who in turn resell them at sizable discounts. People with diabetes use these strips to test blood glucose levels, with those on insulin sometimes using 10 strips or more daily to manage their disease.
Physicians, medical insurance providers and test-strip manufacturers warn about potential health risks from false readings from off-market strips damaged by heat or humidity, among other problems.
“Products obtained from sources not authorized by LifeScan have been found to be counterfeit, stored or transported improperly, tampered with, stolen, associated with insurance fraud, illegally diverted or otherwise illegally obtained,” states LifeScan, the manufacturer of OneTouch test strips, the leading national brand. “LifeScan does not sell products through Amazon, eBay, or other online sources such as Facebook or Craigslist.”
Strip search
Several news reports have addressed the off-market sale of test strips.
Some involve reporters spotting a buyer through Craigslist or other sites, with the exchange occurring in a fast-food restaurant parking lot, raising the specter of a black-market operation that begs the question of legality.
But the U.S. Food and Drug Administration says it’s perfectly legal, with limitations, to buy test strips and resell them, so long as the seller isn’t importing them from or reselling them in other countries.
“In general, firms that act as domestic distributors of devices made in the United States, as well as wholesale distributors that are not manufacturers or importers, are not required to register or list with the FDA,” FDA spokeswoman Tara Goodin said.
She added these words of caution:
“While it is technically legal to buy and sell blood glucose test strips from consumers under certain conditions, the FDA does not encourage this practice due to concerns about the safety and efficacy of test strips. It may be dangerous to consumers to use test strips that were not handled and stored correctly.”
Chris Leake, who placed the Post-Gazette ad, says he operates two family-owned companies — the Diabetic Supply Team, which purchases off-market test strips, and Valley Rain Medical, an online company based in Clovis, Calif., that resells test strips on its website.
He warned that it’s illegal to resell strips acquired through Medicare and Medicaid.
“We turn away people all the time and do not buy strips from them when we find out they received their strips through Medicare/Medicaid,” Mr. Leake said.
He said his companies are properly licensed, pay taxes and have insurance. Other secondary operations, however, aren’t so transparent and don’t follow the professional guidelines that he said he does, including climate-controlled storage of strips.
“We’re absolutely trying to rise above the fly-by-night, first-name-only, grab-the-cash-and-go person buying strips on Craigslist,” Mr. Leake said in an email exchange.
Secondary sales of test strips, he said, “undercut the prices of huge medical distributors who would otherwise have the market pretty well monopolized. I believe this is doing much to help hold down the price of test strips. So I see what we do as contributing more to holding down health care costs than raising them.”
Test-strip “manufactures, of course, hate this,” he said.
Retail realities
Plastic test strips, placed into an electronic monitor, have an enzyme solution on their tips. Within seconds after a drop of blood is applied to the strip, the monitor produces a good approximation of blood-glucose levels, making them essential tools in diabetes management, especially for people who are insulin-dependent.
Name-brand test strips — OneTouch and Accu-Chek, among others — are sold over the counter in containers of 25, 50 or 100, costing about $1.50 each, with some variation. Bargain or generic brands offer strips for as low as 17 cents each. But there always are questions and debates about test-strip reliability, regardless the brand, but more so with cheaper brands. Most brands also sell control solutions to test the accuracy of strips and monitors.
People with diabetes who have health insurance typically get a prescription and acquire test strips with a copay. But it remains unclear whether reselling prescribed strips constitutes insurance fraud. Extra strips do turn up when patients die, change brands upon doctors’ advice, have too many to use before the expiration date, or no longer need or use them.
In a story on Healthline, an online consumer site, a reporter wrote that he met a representative of a firm that advertised “Ca$h paid for Diabetic Strips” in a McDonald’s parking lot in Scottsdale, Ariz., to sell him a box of 50 strips for $20. The purchaser then said he would resell them for $40, which still represents a notable discount over the $75 to $90 retail cost.
The secondary market, Mr. Leake said, is popular because “retail prices are extremely high for a product that people have to have.” Some people with diabetes must choose between buying test strips or insulin. The strips he sells, he said, are 50 to 75 percent below the retail price.
“Despite the large, active secondary market that exists for test strips, thousands upon thousands of dollars worth of perfectly good test strips are still ending up in landfills every single week,” he said. “Meanwhile, many diabetics out there are struggling mightily to be able to purchase the strips they need.”
His companies, he said, bridge that gap, with “thousands of messages from our customers telling us how happy they are to have found us and thanking us for providing the strips at such a discount.”
Copays and controversies
Local health insurance providers said they were unfamiliar with the secondary market for test strips.
One hundred to 200 test strips per month represent common insurance limits. Some individuals, especially those with insulin-dependent Type 1 diabetes, often test blood-glucose levels more often than the prescribed rate of three to six times daily. It’s a key factor fueling the secondary market.
But UPMC Health Plan and Highmark, the major health insurance providers in southwestern Pennsylvania, said people they insure generally can get the number of strips their doctors prescribes for a copay. Joseph R. Mayer, registered pharmacist on Highmark’s pharmacy case management team, said in an email that most private plans provide 200 test strips per month but “coverage does vary by plan and some commercial plans may not offer coverage.” He recommended that people check the test-strip policy before enrolling in a plan.
UPMC Health Plan said it doesn’t limit the number of test strips for Medicare members and children but does limit adult members to 150 strips a month. A doctor can request more strips for a patient whom UPMC says it grants if the amount is deemed “reasonable and appropriate.”
Medicare and Medicaid limits strips to 100 a month — about three a day.
Echoing warnings against the off-market purchase of strips, Patricia Bononi, medical director of the Allegheny Health Network Center for Diabetes, said her patients have discussed their problems in acquiring enough tests strips, “and they want to use more than they are allowed.”
She discourages use of off-market test strips, saying, “You don’t know how they were stored, and I think they are unreliable.”
“In my experience, if patients tell me about [needing more strips], and go for prior authority through their insurer, the insurer typically provides it,” Dr. Bononi said. “You have to work with the provider for a reasonable number that makes sense clinically.”
For Medicare or Medicaid patients, she said, she recommends buying less-expensive generic strips and meters.
Otherwise, she said, “I’d be careful. You could be putting your life at stake.”
June 18 2017
Secondary market arises for diabetes test strips
Five words in a recent classified ad revealed that a secondary market for lower-priced diabetes test strips is reaching into the greater Pittsburgh area.
“I Buy Diabetic Test Strips!” the ad in the Pittsburgh Post-Gazette declared, with an 800-number and requirements that boxes be unopened and strips be unexpired.
The secondary purchase and resale of test strips, typically advertised through Craigslist, is centered for now in Michigan, with several ads showing up in eastern West Virginia and western Maryland.
With retail prices for test strips as high as $1.79 each, the so-called black or gray market finds people selling excess strips to buyers, who in turn resell them at sizable discounts. People with diabetes use these strips to test blood glucose levels, with those on insulin sometimes using 10 strips or more daily to manage their disease.
Physicians, medical insurance providers and test-strip manufacturers warn about potential health risks from false readings from off-market strips damaged by heat or humidity, among other problems.
“Products obtained from sources not authorized by LifeScan have been found to be counterfeit, stored or transported improperly, tampered with, stolen, associated with insurance fraud, illegally diverted or otherwise illegally obtained,” states LifeScan, the manufacturer of OneTouch test strips, the leading national brand. “LifeScan does not sell products through Amazon, eBay, or other online sources such as Facebook or Craigslist.”
Strip search
Several news reports have addressed the off-market sale of test strips.
Some involve reporters spotting a buyer through Craigslist or other sites, with the exchange occurring in a fast-food restaurant parking lot, raising the specter of a black-market operation that begs the question of legality.
But the U.S. Food and Drug Administration says it’s perfectly legal, with limitations, to buy test strips and resell them, so long as the seller isn’t importing them from or reselling them in other countries.
“In general, firms that act as domestic distributors of devices made in the United States, as well as wholesale distributors that are not manufacturers or importers, are not required to register or list with the FDA,” FDA spokeswoman Tara Goodin said.
She added these words of caution:
“While it is technically legal to buy and sell blood glucose test strips from consumers under certain conditions, the FDA does not encourage this practice due to concerns about the safety and efficacy of test strips. It may be dangerous to consumers to use test strips that were not handled and stored correctly.”
Chris Leake, who placed the Post-Gazette ad, says he operates two family-owned companies — the Diabetic Supply Team, which purchases off-market test strips, and Valley Rain Medical, an online company based in Clovis, Calif., that resells test strips on its website.
He warned that it’s illegal to resell strips acquired through Medicare and Medicaid.
“We turn away people all the time and do not buy strips from them when we find out they received their strips through Medicare/Medicaid,” Mr. Leake said.
He said his companies are properly licensed, pay taxes and have insurance. Other secondary operations, however, aren’t so transparent and don’t follow the professional guidelines that he said he does, including climate-controlled storage of strips.
“We’re absolutely trying to rise above the fly-by-night, first-name-only, grab-the-cash-and-go person buying strips on Craigslist,” Mr. Leake said in an email exchange.
Secondary sales of test strips, he said, “undercut the prices of huge medical distributors who would otherwise have the market pretty well monopolized. I believe this is doing much to help hold down the price of test strips. So I see what we do as contributing more to holding down health care costs than raising them.”
Test-strip “manufactures, of course, hate this,” he said.
Retail realities
Plastic test strips, placed into an electronic monitor, have an enzyme solution on their tips. Within seconds after a drop of blood is applied to the strip, the monitor produces a good approximation of blood-glucose levels, making them essential tools in diabetes management, especially for people who are insulin-dependent.
Name-brand test strips — OneTouch and Accu-Chek, among others — are sold over the counter in containers of 25, 50 or 100, costing about $1.50 each, with some variation. Bargain or generic brands offer strips for as low as 17 cents each. But there always are questions and debates about test-strip reliability, regardless the brand, but more so with cheaper brands. Most brands also sell control solutions to test the accuracy of strips and monitors.
People with diabetes who have health insurance typically get a prescription and acquire test strips with a copay. But it remains unclear whether reselling prescribed strips constitutes insurance fraud. Extra strips do turn up when patients die, change brands upon doctors’ advice, have too many to use before the expiration date, or no longer need or use them.
In a story on Healthline, an online consumer site, a reporter wrote that he met a representative of a firm that advertised “Ca$h paid for Diabetic Strips” in a McDonald’s parking lot in Scottsdale, Ariz., to sell him a box of 50 strips for $20. The purchaser then said he would resell them for $40, which still represents a notable discount over the $75 to $90 retail cost.
The secondary market, Mr. Leake said, is popular because “retail prices are extremely high for a product that people have to have.” Some people with diabetes must choose between buying test strips or insulin. The strips he sells, he said, are 50 to 75 percent below the retail price.
“Despite the large, active secondary market that exists for test strips, thousands upon thousands of dollars worth of perfectly good test strips are still ending up in landfills every single week,” he said. “Meanwhile, many diabetics out there are struggling mightily to be able to purchase the strips they need.”
His companies, he said, bridge that gap, with “thousands of messages from our customers telling us how happy they are to have found us and thanking us for providing the strips at such a discount.”
Copays and controversies
Local health insurance providers said they were unfamiliar with the secondary market for test strips.
One hundred to 200 test strips per month represent common insurance limits. Some individuals, especially those with insulin-dependent Type 1 diabetes, often test blood-glucose levels more often than the prescribed rate of three to six times daily. It’s a key factor fueling the secondary market.
But UPMC Health Plan and Highmark, the major health insurance providers in southwestern Pennsylvania, said people they insure generally can get the number of strips their doctors prescribes for a copay. Joseph R. Mayer, registered pharmacist on Highmark’s pharmacy case management team, said in an email that most private plans provide 200 test strips per month but “coverage does vary by plan and some commercial plans may not offer coverage.” He recommended that people check the test-strip policy before enrolling in a plan.
UPMC Health Plan said it doesn’t limit the number of test strips for Medicare members and children but does limit adult members to 150 strips a month. A doctor can request more strips for a patient whom UPMC says it grants if the amount is deemed “reasonable and appropriate.”
Medicare and Medicaid limits strips to 100 a month — about three a day.
Echoing warnings against the off-market purchase of strips, Patricia Bononi, medical director of the Allegheny Health Network Center for Diabetes, said her patients have discussed their problems in acquiring enough tests strips, “and they want to use more than they are allowed.”
She discourages use of off-market test strips, saying, “You don’t know how they were stored, and I think they are unreliable.”
“In my experience, if patients tell me about [needing more strips], and go for prior authority through their insurer, the insurer typically provides it,” Dr. Bononi said. “You have to work with the provider for a reasonable number that makes sense clinically.”
For Medicare or Medicaid patients, she said, she recommends buying less-expensive generic strips and meters.
Otherwise, she said, “I’d be careful. You could be putting your life at stake.”
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