Trump plan would allow states to import drugs from Canada

“Today, for the first time in history, HHS and FDA are open for business on importation,” HHS Secretary Alex Azar said as he announced the news in Tallahassee alongside Florida Gov. Ron DeSantis, a Republican and Trump ally who was instrumental in pushing the administration to allow drug imports.

In addition to Florida, three states have passed legislation to import medicines, all of which need federal approval. In New York, Gov. Andrew Cuomo, a Democrat, said Wednesday he will lay out a plan to lower prescription drug costs in his January State of the State address.

Trump kicked drug imports into overdrive when the Republican-led Florida Legislature approved a pharmaceutical measure earlier this year. The president told supporters at a Florida rally that DeSantis would soon “be able to go out and negotiate to his heart’s content.”

The Florida battleground is central to Trump’s reelection and DeSantis has staked the success of his first term in part on getting drug imports up and running. Trump won Florida by fewer than 113,000 votes in 2016 and used his adopted home state to kick off his reelection campaign.

If the draft rule is adopted, it likely will be years before states can actually implement importation plans. HHS and FDA will accept initial public comment on the proposals for 75 days and a final rule could be years away. States then will have to draft their own plans to comply with the federal rule. Imported drugs will need to bear new FDA-approved labels and undergo safety testing. The requirements could prove prohibitive for potential importers.

“This is not easy stuff,” DeSantis told reporters Wednesday. “This is one step in a long process,” and not “a silver bullet” for lowering drug costs.

“I’d much rather be here moving forward than just being on the sidelines chirping and saying ‘oh why doesn’t somebody do something?’“ DeSantis said.

But the decision to publicize incremental moves risks heightened expectations in a state where a significant number of senior citizens dependent on prescription drugs.

“Older Floridians are going to be to measuring the success of this by when they pay less for prescription drugs,” said Jeff Johnson, state director for AARP Florida. “If that is delayed because the comment period drags out or the review period drags out, people here will notice that.”

The import plan excludes controlled substances, IV drugs, and pricey biologics such as insulin and Humira to treat rheumatoid arthritis. Azar said that as states prove cost-savings and drug safety under the plan, Congress could look at expanding it to more complex and expensive medications.

Canada and its provinces get drugs at lower cost as a result of price regulation and negotiations with drug companies. There’s no way to estimate how much Americans might save from the Trump plan because it will depend in part on the importation applications HHS receives, Azar said.

In addition to the main proposal, the administration on Wednesday put forward an importation route that could benefit drugmakers by letting them bypass payer contracts to sell drugs at lower prices. Drug companies have argued that the heavy discounts they provide insurance companies and others force them to keep list prices high.

Jim Greenwood, president and CEO of the drug industry group Biotechnology Innovation Organization, condemned the Trump administration proposal an “empty gesture” and “dangerous importation scheme” that would endanger patient safety without saving consumers money.

Consumer savings from of the Trump proposal likely will be modest compared to the financial impact of tough drug price controls passed by House Democrats and contained in a bipartisan bill stranded in the Senate. The issue doesn’t break cleanly along party lines, but it is typically more popular with Democrats than Republicans, and drug companies have relied on Republican support to avoid the more stringent measures.

The drug industry has opposed — with success, to date — drug pricing reforms, including an index linking payments for physician-administered drugs to lower international prices and a requirement to list prices in advertisements, forcing the administration to retreat on some of its more ambitious proposals. Other measures have been struck down by the courts or are still being drafted.

The administration held talks in September with House Speaker Nancy Pelosi on her bill, which enables the government to directly negotiate drug prices, but ultimately threw its weight behind the Senate plan, which has minimal support from Republicans.

Pelosi spokesperson Henry Connelly said the White House move was “tip-toeing around Big Pharma with a spectacularly pinched and convoluted proposal that excludes insulin and has no actual implementation date.”

Canadian officials have warned that exporting drugs to the U.S. could cause shortages in their country and would not significantly lower costs to U.S. consumers. Canada’s market for pharmaceuticals is “too small to have any real impact on U.S. drug prices,” Canada’s acting ambassador to the U.S., Kirsten Hillman, said in November after a meeting with White House aides.

In Florida, DeSantis has asked lawmakers to appropriate $20.4 million to start an importation program that involves 150 drugs for the state’s 4 million-patient Medicaid program, and its prison system. State officials have estimated their plan would save $150 million annually. Little of the money would go to consumers, who have few out-of-pocket costs in these health programs.

The idea of importing lower-cost drugs has been brought up repeatedly since Congress imposed current import restrictions in 1987, but safety concerns and industry pushback have held those rules in place.

As part of the 2003 law that established the Medicare Part D drug benefit for seniors, Congress allowed medicines to be imported if HHS certified them as safe and cost-saving. But no HHS secretary has taken on that task. A high-level government report in 2004, co-authored by Azar as a then-HHS lawyer, argued against the idea. Azar as recently as last year called importation a “gimmick” that would not lower costs.

On Wednesday, Azar said the industry has changed.

“At the urging of Gov. DeSantis and the president, we examined the supply channel,” Azar said, noting the vertical and global integration of pharmacy chains and wholesalers.

“We believe this creates an opportunity for a business-to-business system,” he said.