Trump administration unveils plan to allow states to buy cheaper drugs from Canada

President Trump confers with Health and Human Services Secretary Alex Azar at a White House meeting on Nov. 22. Washington Post photo by Jabin Botsford

WASHINGTON – The Trump administration laid out a plan Wednesday to fulfill President Donald Trump’s long-standing vow to lower prescription drug prices by allowing states, drug wholesalers and pharmacies to import some cheaper drugs from Canada. But officials could not say when the plan might go into effect, and many questions about its possible scope remain unanswered.

Curbing high drug prices has been a top priority for the president ahead of the 2020 election, and he demanded advisers pursue options long opposed by many Republicans, including importing cheaper drugs from other countries and using some overseas prices as a benchmark for some drugs in Medicare. While Trump had sought to give voters access to cheaper drugs before the election, Health and Human Services Secretary Alex Azar told reporters on a call late Tuesday that while the administration was “moving as quickly as we possibly can,” it still needs to collect public input and he could not predict the timetable for the plan’s implementation.

Azar announced the policy in an appearance Wednesday morning with Florida Gov. Ron DeSantis, a Trump ally, who has sought federal approval to allow the state to import Canadian drugs for the state Medicaid program. Trump pushed his advisers to speed things up as he seeks to woo Florida, a battleground state that played a key role in his 2016 win, for his reelection effort.

“For the first time in history, HHS and FDA are open to importation as a means to lower drug prices,” Azar said on the call with reporters, referring in the latter case to the Food and Drug Administration. “No president in history has had an FDA willing to open the door to safe importation of drugs from Canada.”

Azar said he could not predict possible cost savings because he didn’t know how many states might come forward with plans, or what would be in them. Several states have shown interest in importing drugs from Canada.

It also remains unclear whether the plan will survive expected legal challenges from the pharmaceutical industry, and whether it will be possible to import significant quantities of drugs from Canada. The Canadian government has fiercely pushed back against importation proposals, warning that the drug supply for Canada’s 37 million residents cannot possibly fulfill the demands of the much larger U.S. market and that allowing importation would cause severe drug shortages for Canadians.

Analysts said it could be years before any drugs are actually imported from Canada – if they ever are – given myriad regulatory and legal requirements involved in finalizing and implementing the plan.

“If you put Canadian drugs on a dogsled and pointed it in the direction of Florida, the dogs would arrive long before any drugs through this regulatory proposal,” said Chris Meekins, a former HHS official who is now a health-care policy research analyst at Raymond James, a financial services firm.

Trump’s political foes said the initiative does not go far enough. “Once again, the Trump White House is tiptoeing around Big Pharma with a spectacularly pinched and convoluted proposal that excludes insulin and has no actual implementation date,” Henry Connelly, a spokesman for House Speaker Nancy Pelosi, said in a statement. He said the Republican-controlled Senate should take up the House-passed bill to lower drug prices.

The administration’s announcement comes as Congress failed to pass bipartisan drug pricing legislation, backed by the White House, in a year-end spending bill, and as infighting, a court ruling and policy disputes have thwarted much of the administration’s efforts to lower drug prices. Democrats have already begun rolling out ads about their own efforts to lower drug prices with House legislation that would allow Medicare to negotiate the prices of up to 250 drugs each year, and are expected to attack Republicans and the White House for failing to work with them to pass legislation. Several presidential candidates, including former Vice President Joe Biden and Sen. Bernie Sanders, I-Vt., also support importation.

The importation rule is based on a plan announced by the FDA and HHS in July.

The administration’s newly issued blueprint would provide two pathways to allow for the importation of drugs. The first, released as a proposed rule, would enable states, along with wholesalers and pharmacies, to develop programs to purchase certain brand-name prescription drugs from Canada, where they are cheaper because a federal body sets a price ceiling for patented drugs. Those plans would require U.S. federal approval.

Under this option, states could not import more complex – and often more expensive – medications, such as biologic drugs, intravenous drugs, products injected in the spinal column or eye, or controlled substances. Any medications that are imported must be approved by Canadian regulators and meet all U.S. standards, undergo testing in the United States to ensure authenticity and demonstrate they will result in significant cost savings.

The second pathway, issued as a draft “guidance” that is likely to go into effect sooner, would allow drug manufacturers to import to the United States cheaper versions of their medications from any country under certain conditions. Many experts doubt most pharmaceutical companies would choose to do so.

In November, Canada’s acting ambassador to the United States, Kirsten Hillman, met with White House Domestic Policy Council Director Joe Grogan and HHS officials. Hillman said in a statement then that she told officials “it is important to recognize that Canada’s market for pharmaceuticals is too small to have any real impact on U.S. drug prices,” noting that Canada represents 2% of global pharmaceutical consumption compared with the United States’ 44%.

Just last year, Azar dismissed the idea of importation as a “gimmick” because he said it would be difficult to ensure counterfeit drugs from other countries are not routed through Canada. But he said Tuesday that the administration’s plan would not “put patients or our drug supply chain at risk.”

In the 2003 law that created a drug benefit for Medicare beneficiaries, Congress included a provision allowing the importation of limited types of drugs from Canada if the secretary of health and human services certified it wouldn’t pose safety risks and would result in significant cost savings. No HHS secretary has ever made such a certification.

The pharmaceutical industry has fiercely pushed back against the administration’s importation proposals, and in July called it a “scheme” with “no way to guarantee the safety of drugs that come into the country from outside the United States’ gold-standard supply chain.”

Former FDA Commissioner Scott Gottlieb, a longtime opponent of importing drugs, raised safety questions about the importation plan on Twitter Tuesday night, but struck a different tone on Wednesday. “On close review,” he tweeted, the proposed rule “places stringent conditions on the importation of drugs.” He added, “While it may sharply limit Canadian drugs under this framework, it maintains critical FDA safeguards to protect consumers.”

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