As Trump administration considers importing drugs from Canada, experts analyze risks, benefits
The idea of importing prescription drugs from Canada as a means to lower prices is back under scrutiny with President Donald J. Trump verbally supporting several state laws that would allow such actions, mainstream media reported.
There are 17 states that have introduced importation bills this year and three — Florida, Colorado and Vermont — have enacted laws for wholesale implementation, according to the National Academy for State Health Policy, a nonpartisan group that addresses health care issues. Though a state must receive HHS approval before it can begin importation, the states appear undeterred.
“Consumers are in desperate straits over the extraordinary drug prices in the United States, thus many states are doing everything that they can to bring those prices down,” Trish Riley, the organization’s executive director told Healio Primary Care.
Another way besides wholesale importation that many consumers obtain more affordable drugs is by going online. But at least one economist thinks that approach is on the wrong track.
“Importing drugs via websites, even if it were legal and safe, is akin to putting a band-aid on a cut that requires stitches. We need a better solution,” Memo Diriker, DBA, MBA, founding director of the Business, Economic and Community Outreach Network at Salisbury University in Maryland, said in an interview.
Trump’s inability to achieve his campaign promise of making significant progress in lowering drug prices makes it likely to be an issue in the 2020 presidential elections. Healio Primary Care spoke to experts and reviewed literature regarding the importation debate to help its readers make an informed decision on the matter.
Trump appears to have changed his mind several times regarding drug importation.
The health care plan he released in 2016 while seeking the presidency indicated that if elected, he would work to “remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.”
However, his blueprint to lower drug prices that was released last year made no mention of importing drugs. Earlier this spring, leaders of Florida and Colorado said Trump verbally supported their respective plans.
Current secretary Alex Azar also seems to have reversed his thoughts in this area.
He told reporters within a week of Trump’s blueprint release that importing Canada’s drugs as a solution to high drug prices is a “gimmick [that] has been assessed multiple times by the Congressional Budget Office, and CBO has said it would have no meaningful effect.”
But earlier this month, when asked about Florida’s plan to import drugs from Canada, Azar replied “the president and I clearly support importation that can be done safely and provide real savings.”
Diriker said the timing of Trump’s actions and Azar’s comments smack of election politics.
“When you are a candidate, some solutions sound good and you think will work well, but then when you get into office and really see what would need to occur before that could happen, the reality is often different,” Diriker said. “With the presidential election less than 18 months away, Trump and his team are thinking like candidates again.”
Robert Freeman, PhD, a professor of pharmacy administration at the University of Maryland’s Eastern Shore campus, agreed with Diriker, especially when it came to Florida.
“This is nothing more than window dressing in the form of a precampaign stunt in an important state,” he told Healio Primary Care.
A research fellow at the Independent Institute and director of FDAReview.org, said while a president meddling in state affairs is not completely new, there is still a precedent to Trump’s actions if he orders Azar to sign off on Florida’s plan.
“Managing opioid abuse and physicians’ financial relationships with drug producers, regulating health insurance and enacting right-to-try laws were all once state issues that have become federal issues,” Raymond March, PhD, said in an interview.
“Florida’s efforts are different in that they put forth an initiative recognized previously as a federal, mostly FDA issue and are significant in that it could be a rare effort for deregulation. President Trump promised to roll back 70 to 80% of FDA regulations upon taking office. So far, he has fallen well short. If he allows Florida to legislate this kind of law, it would be a huge curb to the FDA’s regulatory power,” he added.
Freeman said that individuals who buy drugs from websites (as opposed to adopting a wholesale importation model) are technically breaking the law, but currently, the practice is largely undetectable and not vigorously enforced.
Potentially lower costs
Drug prices in Canada and elsewhere around the world have repeatedly been shown to be less expensive than U.S. prices.
Ravi Gupta, an internal medicine resident in the department of medicine at the Johns Hopkins School of Medicine and colleagues analyzed Medicaid spending and generic competition on 170 novel drugs approved in tablet or capsule form and approved by the FDA and a similar entity in Canada, Europe, Australia, New Zealand, Switzerland, South Africa or Israel. Findings were published in The BMJ.
“When we looked at the off-patent drugs with the least competition in the USA, 64% of those drugs had additional potential competition from international sources, which could help bring prices down,” he told Healio Primary Care.
Mark Abramowicz, MD, president of The Medical Letter, recently compared head-to-head 30-day wholesaler acquisition cost comparisons for a dozen drugs in the United States and Canada.
Among his findings published in JAMA: the blood thinner Eliquis (apixan, BMS) cost $318.30 less; the long acting insulin Lantus (insulin glargine, Sanofi) cost $57.20 less and the cholesterol-lowering Crestor (rosuvastatin, AstraZeneca) cost $205.60 less.
Other experts, citing each country’s allotment of drugs and the ability of its residents to pay, warned that those price gaps would narrow if Canada became a larger player in U.S. prescription fulfillments.
“The pharmaceutical industry can control the volume of drugs it sells in Canada, and they simply aren't going to increase volume to any great extent,” Freeman explained.
“The drug companies know that most Canadians won’t pay the high prices that many Americans pay,” Alex Tabarrok, PhD, an economics professor at George Mason University, said in an interview.
“They also know that they can recover a significant portion of their research and development costs in America. So, if a large number of U.S. residents started importing their drugs from Canada, the pharmaceutical companies would raise their Canadian prices and cut back on developing new drugs. Such actions would negatively impact the health of residents of both countries,” Tabarrok continued.
Possible safety issues
Studies indicate the positives of low prices are potentially offset by concerns over drug safety.
Drugs can be approved for different indications or dosages in different countries, which may not always be made clear at pharmacy counters, according to Nigel S.B. Rawson, PhD, of the Eastlake Research Group in Canada.
He wrote in CMAJ how Lynparza (olaparib, AstraZeneca) received FDA approval in patients with BRCA-mutated advanced ovarian cancer. But Health Canada approved it for patients with platinum-sensitive relapsed BRCA-mutated high-grade serous epithelial ovarian, fallopian tube or primary peritoneal cancer.
In addition, patients purchase drugs on their own via the internet without supervision websites face another potential safety risk, according to C. Michael White, PharmD, of the department of pharmacy practice at the University of Connecticut.
“Importing drugs in this particular way cripples the patient-pharmacist relationship that is an important link in the medication safety chain and compromises the ability of the pharmacist to relay important information back to the prescribers,” he told Healio Primary Care. “In addition, this type of imported drug could be coming from a variety of sources and being mailed in from several countries, compromising the ability to detect and mitigate drug interactions or to provide medication therapy management,” White added.
But not everyone subscribes to the concerns noted by Rawson and White.
Joel Lexchin MSc, MD, a practicing physician and professor emeritus at the School of Health Policy and Management at the University of Toronto, wrote in Open Medicine that of 528 drugs approved in Canada between Jan. 1, 1990 and Dec. 31, 2009, 4.2% had been withdrawn, a figure he wrote was “generally in line with U.S. and European values.”
Five years after his paper’s publication, Lexchin said in an interview that drugs from Canada are safe.
“The mere fact that drugs cross a border does not render them suspect. There are no Canadian bodies lying on the street from the drugs that they consumed here and similarly there won’t be any American bodies lying on the street if they use drugs imported from Canada,” he said.
Pharmaceutical companies have an incentive to claim there will be safety issues, Tabbarok said.
“The drug companies are happy to have those rumors because it will lower consumers’ incentive to buy them from outside the United States. But those rumors are nonsense. If you buy your drugs from a Canadian Walmart, your drugs will be fine. The safety of Canadian drugs only comes into play when it comes to where patients buy the drugs from,” he said in an interview.
Several researchers have published about the origin of safety issues associated with drugs imported from Canada, and found the problems generally lay with the distributors.
A study in PLoS One detailed a litany of potential problems when its authors tried to order drugs from Canadian online pharmacies, including: drug identities that could not be confirmed, copy versions of drugs sent when name-brand versions were ordered; drugs shipped from a different location than indicated on the website and an original prescription not being required.
Riley of the National Academy for State Health Policy said its wholesale importation program eliminates the “horror stories” of shopping for drugs online.
She said the academy’s wholesale importation proposal, which prohibits importation of opioids and biologics, creates a state wholesale importation program to purchase lower-cost drugs from Canada. The drugs are then made available to state residents through an existing supply chain that includes local pharmacies.
“Our model guarantees the drugs are FDA authorized and follow all the FDA current rules,” Riley said, adding that those who hesitate to legalize importing drugs may not realize how global the U.S. drug market already is.
“Forty percent of the drugs at U.S. pharmacies were made somewhere else, and 80% of what makes up those drugs have been made somewhere else, so we already do a significant importation from our foreign countries,” she said.
“Given the global nature of the pharmaceutical industry, anyone who thinks Canadian drugs are unsafe, are in essence, also saying American drugs are unsafe,” Riley added.
However, some of the sources consulted for this story suggested that wholesale importation methods may have some potential faults.
“The new wholesale model will still be a much more complex procedure than what we have currently have. In that complexity, there is risk for errors or delays in securing medications when patient need it,” White told Healio Primary Care.
“I suspect that if the wholesale model is approved and implemented on a nationwide scale, the pharmaceutical industry will simply raise the prices overseas, they will not lower them here. They would rather lose the market share elsewhere if they had to choose in order to preserve the profitability of the drugs on the U.S. market,” he added.
Freeman said the wholesale model may not bring drug prices down.
“A wholesaler model, while on the surface attractive, isn't really going to lower prices to the consumer. Wholesalers work on a very thin profit margin (generally around 1%) but generate enormous cash flows. It's doubtful they could purchase in sufficient volume from manufacturers to offer significant benefits,” Freeman said in an interview. – by Janel Miller
Editor’s note: According to the National Academy for State Health Policy, the 14 states that have introduced wholesale importation bills this year are Connecticut, Illinois, Indiana, Maine, Massachusetts, Minnesota, Missouri, New Mexico, New York, Oklahoma, Oregon, Utah, West Virginia and Wyoming.
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Diriker reports serving as a trustee of a regional health system and its regional hospital that has shares in some local health ventures but no external pharmaceutical contacts other than the pharmacy operations within the hospital. None of the other sources interviewed for this story report any relevant financial disclosures.