Why Is Restasis So Expensive?

The typical American finds paying for prescription drugs challenging. Most American families don’t have $400 saved for emergencies. What do we do when prescriptions cost almost twice that every month?

One of the most persistent puzzles of our healthcare system is why everything costs so much. For instance, take the prescription eye treatment Restasis.

It turns out there’s an answer to this question. And, in even better news, there are a few ways to save money on Restasis today. Read on to learn more.

What Is Restasis?

Restasis is cyclosporine. Cyclosporine is an immunosuppressive drug that helps organ transplant patients. It keeps the patient’s body from rejecting the new organ.

In other forms, cyclosporine treats overactive-immune-response conditions. For example, doctors prescribe cyclosporine to treat psoriasis and rheumatoid arthritis. 

The Restasis drug treats chronic dry eye specifically. For some patients, the underlying cause of chronic dry eye is inflammation.

Inflammed tissues can impact the lacrimal glands, which are vital to creating tears. Without functional lacrimal glands, patients’ eyes become dry and irritated. 

Chronic dry eye seriously negatively affects patients’ quality of life. It also impacts vision. 

Restasis treats this condition with eye drops. Restasis lets patients apply cyclosporine directly to their eyes twice per day.

Over time, this treatment alleviates inflammation. This restores lacrimal glands to full functionality. 

What Does Restasis Cost in the United States?

In the United States, the wholesale acquisition price of Restasis is $586 per month. That’s roughly $7,032 per year. 

That said, prices vary. Insurance coverage and pharmacy discounts impact what patients actually pay for the drug. Also, the retail price is typically higher than the wholesale price.

The average retail price of Restasis is $729.74. Patients with Medicare Part D coverage may only pay $42. But, they may also pay over $640.  

Why Is Restasis so Expensive?

Are you wondering why Restasis is so expensive? Healthcare costs are a complex issue. But, the extraordinary price of Restasis works as a case study in price inflation. 

After all, Restasis is based on the drug cyclosporine. Cyclosporine has been around since the 1970s. And Restasis itself reached initial approval in 1983. 

A newer cyclosporine variant is Astagraf XL®. Doctors prescribe it to organ transplant patients. As of 2021, the acquisition price of the lowest Astragraf XL® dosage was $72.76.

Both Restasis and the minimum dosage Astragraf XL contain the same amount of cyclosporine. 

Why is the difference between Restasis and Astagraf XL® so dramatic? 

Opaque Production Costs

You might think the production cost differs. Unfortunately, it’s hard to determine what the core cost of production is for any given drug.

Pharmaceutical companies try to keep these costs secret. This may be to prevent accusations of profit margin inflation. 

Yet, even without this information, we know three reasons Restasis costs so much in the United States. 

1. Lack of Government Oversight

In some countries, the federal government sets or regulates drug prices. However, this isn’t the case in the United States.

Insurance Companies Can’t Negotiate

The United States doesn’t have a single federal health insurance system. Instead, Americans get health insurance through many different private companies. 

Each insurance company meets with drug companies. Then, it attempts to negotiate the price of the drug to keep costs low for its beneficiaries.

Unfortunately, insurance companies don’t have much leverage to negotiate. An insurance company can refuse to cover a drug if the pharmaceutical company disagrees with its price.

But, if even one insurance company agrees to cover the drug at a high price, the other insurers lose their leverage. If the other insurers walk away from the table, Americans will choose the insurer covering the drug they want. 

Because insurance companies are divided in competition, they’re easy to conquer. In essence, pharmaceutical companies get to set the prices they want. 

U.S. Government Negotiation Struggles

The federal government does not have unilateral power to set drug prices. But, it can negotiate prices on behalf of Medicare and Medicaid.

Unfortunately, these efforts are hampered as well.

In theory, Medicare and Medicaid act as conduits between drug makers and patients. Government negotiators have room to walk away from the table since drug companies can’t afford to lose their business. 

In practice, though, federal laws require Medicaid and Medicare to cover all FDA-approved drugs. This hampers the government agencies’ negotiations. 

Even without this handicap, federal negotiators may not be trying very hard to reduce drug prices. This is because drug companies hire lobbyists.

These lobbyists make persuasive arguments–and campaign donations–that discourage Congress members from limiting corporate profits. 

Drug Pricing Lobbyists

In one ten-year analysis, pharmaceutical companies spent, on average, $1.5 billion each year lobbying Congress. Most drug companies hire two lobbyists for every member of Congress.

This lobbying includes formal presentations, informal meetings, and campaign contributions. Among themselves, drug company leaders point to lobbying as a source of their wins.   

Recently, Congress has passed bills in the House to reduce drug pricing. Pharmaceutical lobbyists oppose these bills. Some lobbyists have succeeded in dividing Democratic support for reform bills. 

Drug company lobbyists argue that high prices are the cost of innovation. But, other experts claim this isn’t true.

In fact, taxpayer-funded projects are responsible for as many medical breakthroughs as for-profit companies. And, even those large pharmaceutical firms benefit from government funds, which are filled through taxes.

Recently, the United States government paid $9 billion to for-profit companies to develop the Covid-19 vaccine. While that was an extreme circumstance, for-profit companies regularly apply for government grants and subsidies. 

The U.S. Budget Office notes pharmaceutical spending on R&D has increased. In the past ten years, costs have risen dramatically. With this, so has the cost of government subsidization, mainly through Medicare. 

Despite these factors, lobbyists are often persuasive. Their rhetoric impedes attempts at government oversight. 

Restasis Costs Less in Canada

In Canada, Restasis is much less expensive. In contrast to the United States, Canada has a single, federally-funded healthcare system. 

The Canadian government regulates drug prices. It negotiates with drug makers to keep costs low. 

The Canadian healthcare system maintains leverage in negotiations. It’s willing to leave the table. It will not pay for medications if it believes the costs outweigh the benefits. 

Because it isn’t trapped (as Medicare is), the Canadian government can negotiate closer to its desired drug price. 

2. Prioritizing Profit With Marketing

Drug companies prioritize making a profit. One way to make a profit is to drive up demand. Marketing makes this happen.

Unfortunately, marketing is also expensive. In fact, pharmaceutical companies spent $6.58 billion on direct-to-consumer advertising in 2020.

Money spent on marketing is a gamble. The company hopes to recoup the expense with increased sales of the drug. 

This is easier to do if each drug has a higher profit margin. If a drug’s profit margin is high, the company doesn’t need to sell as many units to recoup expenses.

In this way, marketing costs incentivize higher profit margins. This, in turn, raises drug prices. 

Direct-to-Consumer Marketing

In the United States, drug companies can legally advertise their products directly to consumers. This strategy is illegal in Europe, the UK, and Canada. 

The European Union prohibits drug companies from advertising prescription medications on tv. These prohibitions limit companies’ abilities to stir up demand.

In the United States, these direct-marketing tactics are legal. They can lead to significant rewards for pharmaceutical companies. But, this increases the incentive for profitable drugs. 

Without the expense of marketing departments, there’s one less thing Canadian prescription drugs have to pay for. 

3. Patent Law Manipulation

Poor government negotiation and marketing costs drive up the price of every drug. But Restasis, in particular, demonstrates how companies inflate drug prices by manipulating patent law.

This manipulation can create monopolies. Monopolies circumvent competitive pricing by eliminating the competition.   

What Are Drug Patents?

Drug patents are exclusive intellectual property rights. If a company patents a molecular compound (like a drug), the United States grants that company the exclusive right to produce the drug for twenty years.

This exclusive status creates a monopoly. However, the monopoly is time-limited.

Patents are meant to reward invention. An effective patent system encourages innovation rather than companies merely ripping one another off. 

Allergen Attempts Patent Limit Dodge

Allergen invented Restasis. It patented the current formulation of Restasis in 2003. So, legally, Allergen’s exclusive production rights end in 2024.

But, the company wanted to evade competition from generics. So, in 2017 it attempted to sell its patent rights to the St. Regis Mohawk Tribe.

The St. Regis Mohawk Tribe is an indigenous sovereign nation. As such, not all U.S. laws and regulations apply to tribe members.

Allergen hoped the St. Regis tribe could maintain exclusive rights to produce Restasis after 2024. Allergen would have to license production rights from the tribe. 

Generic drug companies alleged foul play. These companies sued Allergen on two grounds:

• Allergen’s patent was not valid
• St. Regis Tribe’s sovereign immunity cannot violate the Hatch-Waxman Act

In 2018, the U.S. Patent and Trademark Office sided with generics companies. The Restasis patents weren’t valid. And, sovereign immunity did not legally enable non-compliance with Hatch-Waxman. 

Generic Restasis in 2024

Regulators defeated Allergen’s strategy. Higher courts refused to hear appeals, so the USPTO’s ruling stayed. Generic Restasis will reach the American market in 2024. 

Generic Restasis in Canada Now

Canada’s drug patent laws are different from the laws in the United States. In Canada, a generic drug manufacturer may put their version of the drug on the market while the patent is still in effect.

To do this, the generic drug company must assert that it does not infringe on the patents. Or it must argue that the patent is invalid. Companies make these assertions out-of-court.

In Canada, drug companies introduced a non-infringing version of Restasis to the market. It may be similar to a compound Allergen patented in 1995. This compound used a different ratio of cyclosporine to glycerin.

Currently, generic Restasis’ price is $90 / month in Canada. It is not available in the United States.

Less Expensive Restasis Today?

You can order Restasis today. And, you can pay less for it. The primary ways to save money on Restasis are:

• Manufacturer coupons
• Prescription assistance programs
• Canadian online pharmacies

In Canada, name-brand Restasis only costs $120. That’s 80% off the wholesale acquisition price in the United States. Or, to put it another way, Restasis is five times cheaper in Canada than in America.

Order Restasis From Canada

People in the United States can order Restasis from Canada. Canadian online pharmacies are legal, safe, and much less expensive. These pharmacies offer American patients drugs at Canadian prices.

Is Canadian Restasis Legal?

It’s legal to order Restasis from Canada in most circumstances. Currently, U.S. Congress is debating over the letter of the law. But, most legal scholars agree ordering prescription drugs abroad doesn’t violate the law’s spirit.

Practically speaking, no agent in border patrol or U.S Customs wants to arrest an American for transporting eye drops. Drug import laws are meant to stem the flow of dangerous, addictive substances. Restasis isn’t in that category.

In a thought piece published on Web M.D, one legal scholar explained the keen awareness government agents have. Politicians know citizens hold them liable for the failures of this country’s healthcare policies.

Canada has inexpensive medications that Americans want. 78% of Americans support legalizing medicines from Canada. Standing in the way of Americans’ pursuit of commerce and physical health seems, well, politically unwise.  

Ordering Restasis from Canada was legally greenlit in July 2021. President Biden signed an executive order empowering states to import drugs from Canada legally. 

Are Canadian Online Pharmacies Safe?

Importing Restasis from Canada is as safe as buying Restasis at your local pharmacy. This medicine isn’t known to cause addiction. 

It’s reasonable to feel wary about ordering drugs online. After all, you may have heard stories of less-than-scrupulous companies selling fraudulent products. 

The Canadian government regulates pharmacies. For solely online pharmacies, Canada and United States maintain the Pharmacy Verified Websites database. This program makes sure patients are buying from reputable pharmacies.

Some online pharmacies have a geographic “home base” in Canada. Any pharmacy with a street address is subject to regulations in its province.

So, to see if a pharmacy based in, say, Nova Scotia is legitimate, you would see the NS Pharmacy Regulatory Board. You could look up the pharmacy and discover any warnings or public notices about it. 

Buy Restasis for Less Today

We can answer questions like, “Why is Restasis so expensive?” But, better than that, we can give you options. 

90DayMeds is an online Canadian pharmacy. We’re ready to get you the medications you need at a price you can afford. 

You can get any prescriptions drug using our secure online order system. And you’ll only pay Canadian prices.