Trump gives boost to state drug import plans

The Trump administration has softened its stance on drug importation, giving a boost to states that want to curb rising drug prices by importing medications from Canada.

Health and Human Services (HHS) Secretary Alex Azar last week said he and President Trump “are committed” to making importation work.

{mosads}The development marks a significant break from the traditional GOP position, which is opposed to drug importation. Republicans often cite concerns over the safety of imported drugs.

The comments also marked an about-face from Azar, who just last year called drug importation a “gimmick.” 

“The last four FDA [Food and Drug Administration] commissioners have said there is no effective way to ensure drugs coming from Canada really are coming from Canada, rather than being routed from, say, a counterfeit factory in China,” Azar said during a 2018 White House meeting. 

“The United States has the safest regulatory system in the world. The last thing we need is open borders for unsafe drugs, in search of savings that cannot be safely achieved,” Azar said at the time.

Azar, though, was reportedly overruled. The administration’s blessing could now pave the way for states such as Vermont, Florida, Colorado and Maine to begin drug importation. All of those states have passed laws that would allow the importation of prescription drugs from across the northern border.

Prescription drugs are cheaper in Canada, as in most other countries, because the government can directly negotiate the price with drug companies.

At a meeting in May, Trump told Azar to begin working with Florida on a drug import plan the government could approve. Trump has made lowering drug prices a priority, and if the Florida plan works, he could cite it as a major policy victory in a key battleground state going into the 2020 election.

But even with the White House on board, the states will need to overcome hurdles, starting with the massive lobbying effort by the drug industry.

To date, almost every administrative effort on drug pricing has been blocked in court or been withdrawn in the face of opposition.

Aside from industry opposition, states are facing another, potentially larger issue: Canadian officials are concerned that U.S. plans to import their drugs could result in high prices and potential shortages. According to a recent Reuters report, Canadian officials have told U.S. officials that there are other, better ways to lower drug costs.  

Those challenges have left states dealing with soaring drug costs in a difficult situation.

Trish Riley, executive director of the National Academy for State Health Policy (NASHP), said the massive spikes in prescription drug prices have put pressure on state officials to act.

“States are frustrated,” Riley said. “It’s a new phenomenon to see these arbitrary price spikes. It’s reached a point where states are looking at everything they can do. Importation is one arrow in their quiver.” 

Passing drug importation laws is only a first step for states. The decision to approve such plans ultimately needs to be made by HHS.

Many of the details have yet to be worked out, including which drugs would be imported, leaving questions about how much money the policy could save and whether the states can overcome questions about safety.

According to Riley, NASHP is working with the four states to develop a plan they can submit to HHS.

The Florida law in particular is notable because it is supported by GOP Gov. Ron DeSantis. Under the law, the state would contract with a wholesaler in Canada, who would provide certain high-cost drugs that the state identifies to a wholesaler in Florida.

Supporters of drug importation also hope to build support for the plans.

Riley said many of the critics of drug importation — namely the pharmaceutical industry — have misleading talking points.

The drugs come from unverified sources, critics argue, and could be tainted.  

“These dangerous proposals threaten the safety of patients without delivering the savings they promise and would likely come at a high cost to the state,” according to a blog from the industry group PhRMA.

The group says more than 90 percent of the U.S. market is comprised of less expensive generic medicines. 

“The exponentially higher risk of counterfeit, adulterated and substandard products entering the United States and harming patients would be playing Russian roulette with patients’ lives,” PhRMA said.

Riley said those arguments have some merit for unverified personal importation, but noted that contracting with wholesalers, while more cumbersome than direct personal importation, is much safer. 

“There are checks and balances built in. We know where the drugs come from,” she said. 

Health care consultant Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors, said even though using wholesalers to import drugs is safer, states will still have safety gaps that need to be filled, because the regulatory systems of the U.S. and Canada are different. 

“It’s better to regulate or police [wholesalers], instead of the Wild West where individuals can get it from wherever they want,” Shekhdar said, adding that much depends on the integrity of the international wholesalers.

“It’s not a zero-risk game,” he said.

Jeff Myers, a drug pricing consultant, said he understands the reluctance to believe industry’s “scaremongering,” but there are major hurdles that the states haven’t addressed.

“If you’re building an infrastructure to move products, and take advantage of Canadian pricing, it’s … not real clear that you can actually do it in any meaningful way, even if FDA can say it’s safe,” Myers said. 

“Even a state as big as Florida can’t just wave a magic wand and start sucking down drugs from Canada. It involves a big infrastructure build. And right now it just doesn’t exist,” he said.

Much of the push will also come down to Azar.

The 2003 Medicare Modernization Act directs the FDA to allow pharmacists and wholesalers to import prescription drugs from Canada, but only if certain safety precautions are followed.

The HHS secretary needs to certify that importation would not pose an additional risk to the public’s health and safety, and that it would result in a “significant” reduction in the cost of covered products to the American consumer.

States have tried to allow drug importation in the past, but HHS has never signed off on the plans. 

But that could now change.

Azar recently acknowledged that the marketplace has changed dramatically since 2003, signaling possible changes ahead.

“I do believe that the channel has changed quite substantially since these issues were first addressed in the early 2000s — increased international channels of distribution, increased major players and wholesale retail distribution in pharmacy,” Azar told reporters.

“That, I think, could open the door to safe approaches.”