Healio Special Report: Health Care and Politics
Healio Special Report: Health Care and Politics
December 18, 2019
3 min read

HHS unveils plan to allow states to import drugs from Canada

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Alex Azar II
Alex Azar

Today, HHS officials announced that they are seeking public input on two broad strategies that would, for the first time, allow “safe and affordable” prescription drugs to be imported from Canada.

In July, President Donald J. Trump had verbally supported several state laws that would allow drugs to be imported from Canada. But those state laws would need the HHS’ approval before the states could begin importing drugs from Canada.  

Curbing high drug prices has been a priority for the Trump administration, but experts told Healio Primary Care that the strategies are “gimmicks” that will not lead to any significant change and could possibly be illegal.

HHS ’ strategy

HHS stated that it wants public comment on:

  • ways to allow state governments — potentially working with wholesalers or pharmacies — to import nonbiologics and non-IV prescription drugs from Canada as long as the medication undergoes several quality control measures, including testing to ensure that the drugs are not defective; and
  • ways to allow drug manufacturers to import U.S. versions of FDA-approved drugs that are sold in other countries.

HHS said it will not accept proposals from individuals who wish to import drugs from websites that not approved by the government. HHS has not provided a cost-savings estimate based on its plan, nor have they provided a date that importation would start.

Pill Bottles 
Today, HHS officials announced that they are seeking public input on two broad strategies that would, for the first time, allow “safe and affordable” prescription drugs to be imported from Canada.

“The importation proposals we are rolling out are a historic step forward in efforts to bring down drug prices and out-of-pocket costs,” HHS Secretary Alex Azar said during a conference call with reporters. “Everything is aimed at breaking down barriers and distortions, facilitating a market that lowers prices for American consumers.”

Brett Giroir, MD, assistant secretary for health at HHS, said the proposed rule and draft guidance “will allow Americans the best opportunity to obtain lower cost drugs without playing Russian roulette with the pill bottle. We need to make absolutely sure that Americans have the safest possible drugs. We are confident that these new proposals will achieve that goal.”

No ‘meaningful impact’ on drug prices

C. Michael White, PharmD, a practicing pharmacist and professor at the University of Connecticut School of Pharmacy, told Healio Primary Care that HHS’ plan is flawed.

He noted that Canada and the United States do not receive same allocations of prescription drugs. A sudden surge in demand could temporarily deplete supplies in Canada. Once the supply is restored, consumers in both countries would pay higher costs for a prescription drug, he said.

Robert Freeman, PhD, a former professor of pharmacy administration at the University of Maryland's Eastern Shore campus, agreed with White, saying that the strategies would not likely have any “meaningful impact” on drug prices.

Robert Freeman
Robert Freeman

He added that the HHS plan faces an uphill battle in becoming reality.

“Writing legislation at the state level is going to be a long, drawn-out process that will be challenged every step of the way by manufacturers,” Freeman said in an interview.

“In addition, these proposals are in violation of United States patent law since the law allows the patent-holder to control, among other things, the supply chain within the United States market,” he continued. “These proposals will certainly be litigated, and although I'm not an attorney, I can't see any legal recourse to make the rule compliant.”

C Michael White 2019
C. Michael White

White said that over the long term, the U.S. would fare better if it learns from “properly working drug markets” in other countries.

“Governments in Europe and Canada negotiate lower prescription drug prices by threatening to deny access if the cost of the drug is higher than the value that will be yielded,” he explained. “Therefore, in those countries, the pharmaceutical industry has a choice to make — lose the country as a market or lower the price.”

Currently, “pharmaceutical manufacturers make a majority of their profit off the high prices in the United States and therefore, they can accept much lower profitability in other countries,” he continued. “These sweetheart deals to other countries will not continue if that means losing the profitability in the America.”

Following the lead of other countries “is a difficult thing to do since people with real needs, including people with rare diseases, will be caught in the middle,” White explained, “but if we have the courage to set this guidance and not deviate from it, the entire market will begin to right itself over time.” – by Janel Miller

Disclosures: Azar, Freeman, Giroir and White report no relevant financial disclosures.