By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Med spas purchasing Botox or other drugs from legitimate overseas sources in order to save money open themselves to significant legal risks. For instance, in June 2018, Oregon-based physician Brenda Roberts had her medical license revoked for obtaining and using prescription medication from foreign countries. Roberts was a family practice doctor who began administering Botox treatments at her home on the side. She wasn't necessarily doing anything improper in terms of patient care, and she was keeping appropriately detailed records on her patients, but after Allergan noticed that she was having Botox sent to her home and cut off her account, she began buying Botox from United Pharmacies, a "rogue pharmacy" that operates outside of U.S. Food and Drug Administration (FDA) governance. FDA agents went through her trash and found that she had used Botox that was intended for sale in Europe.

Parallel Importation

Roberts was participating in a practice called parallel importation. In countries such as the United Kingdom, Germany, France, Sweden, and Canada, government regulates the cost of pharmaceuticals. Broadly, these measures are designed to prevent drug manufacturers from charging too much for what those governments consider essential medicine, but they also apply to pharmaceuticals used for elective procedures such as those offered by medical spas, including Botox.

In the U.S., however, drug manufacturers essentially can charge whatever they feel the market will bear for their products, and that price is invariably much higher than what is charged in other countries. In response, licensed dealers in countries where cost controls are enforced sell their products to customers in the U.S. at prices that are up to 50% less than what the buyers would have to pay if they were purchasing the drugs directly from the manufacturer.

This transaction benefits both parties. The buyers get legitimate pharmaceuticals for much less than they would have to pay if they were buying directly from the manufacturers, and the dealers can make a decent profit simply by marking the product up slightly. These are not cheap, counterfeit pharmaceuticals like the ones that are typically manufactured in China that have flooded the medical aesthetics market in recent years; these are the same drugs that are approved by the FDA and sold in the U.S.

Legal Concerns

However, while parallel importation is broadly legal in the U.S.—the Supreme Court ruled that to be the case in a 2013 case involving textbooks—this case demonstrates that the distribution of drugs that are not explicitly intended for use in the U.S. is still absolutely illegal, and that the FDA and the U.S. Drug Enforcement Agency (which also participated in the investigation) are taking cases such as this one extremely seriously. There hasn't been a great deal of enforcement yet, but this case demonstrates that the issue is absolutely on the agencies' radars.

Despite the relatively minor risk of being caught, ByrdAdatto and AmSpa steadfastly believe that medical aesthetics practices should not participate in parallel importation. The potential consequences clearly outweigh the cost savings. If a practice's profitability depends on getting 30% off Botox, it needs to re-evaluate the way it does business. Practices should remain compliant with the FDA and other regulatory agencies, regardless of whether a drug is overpriced. It is absolutely possible to run a medical spa practice that is both financially sound and compliant with all laws and regulations. Learn the keys to running a medical spa practice profitably and legally at an AmSpa Medical Spa & Aesthetic Boot Camp. Consult with your healthcare attorney if you need more information. AmSpa members can take advantage of their annual compliance consultation with the business, healthcare, and aesthetic law firm of ByrdAdatto.