With drug prices in the US now substantially more than twice as much as in other countries, Donald Trump issued an executive order in his final days as president allowing states to import many drugs from Canada under certain conditions. Now, Phil Galewitz reports for Kaiser Health News that several states are planning to seek approval from the US Department of Health and Human Services (HHS) to get drugs at lower cost from our northern neighbor. Will the Biden administration provide approval?
A new RAND report finds that in the 17 years between 2000 and 2017, drug prices in the US rose 76 percent. They are likely to continue to increase. Today, we pay on average more than two and a half times what other wealthy countries pay for brand-name and generic prescription drugs.
Interestingly, we pay about 3.44 times more than other countries for brand-name drugs, but 84 percent of what other countries pay for generic drugs. We pay on average about 1.7 times what Mexicans pay for their brand-name drugs and 7.7 times what Turks pay for their brand-name drugs.
During his presidential campaign, President Joe Biden supported the policy of drug importation from Canada as one way to help Americans afford their medications. Of course, Pharma opposes importation, claiming patient safety issues. But, its arguments around safety hold little weight. People have been importing drugs safely from Canada for years. Moreover, forcing people to go without needed medicines because they are unaffordable creates grave patient safety issues.
Pharma has sued to stop the Trump policy from taking effect. The federal government must respond shortly. We will have a good sense of whether President Biden still supports importation from Canada, based on the federal government’s response to the lawsuit.
Florida, Colorado, Vermont, New Hampshire and Maine have decided to take importation into their own hands. Some are contracting with private businesses to deliver them drugs from abroad. Florida’s plan is to get lower-cost drugs for state programs, such as Medicaid. It thinks it could save as much as $150 million in year one.
Colorado is looking to contract with a private company to obtain drugs from Canada for its residents that would be available at their local pharmacies. And, health insurers in Colorado would be able to make the drugs available on their formularies. Colorado policy experts believe that importing drugs from Canada would more than cut the price of many drugs in half for Colorado residents.
For its part, the Canadian government seems willing to cooperate with the states. However, it will only cooperate when it has a healthy supply of a drug. While that could be an issue with generic drugs, it does not appear to be an issue with brand-name drugs. Trump’s executive order does not allow importation of insulin or injectables.
The Secretary of HHS must approve a state’s importation policy and find it safe. President Biden’s HHS nominee, Xavier Becerra supported a law allowing importation from Canada as a member of the House of Representatives back in 2003. That was a while ago; it’s not clear how HHS will respond in 2021.
Again, safety should not be an issue. Many drugs sold in the US are safely imported from abroad already.
Importation is not a solution to out-of-control drug prices in the US. It will only help a small portion of the population. But, making it legal to import drugs should help reset the market price for drugs in this country. It should make it harder for Pharma to challenge regulation of drug prices to levels at which people can legally import them.
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