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Utah Life Sciences News & Events

Trump Proposes Pathways to Import Canadian Drugs

August 2, 2019

On Wednesday, The Trump Administration announced a Safe Importation Action Plan – PDF* that outlines two potential pathways that could open the door to import lower cost drugs from Canada. However, no timeline has been specified for the plan, which will be formalized through agency rulemaking.

Under Pathway 1, states, wholesalers or pharmacists could submit importation plans for pilot projects to the Department of Health and Human Services (HHS) for review and approval.

Under Pathway 2, manufacturers could import versions of FDA-approved drugs that they sell in foreign countries, provided the drugs are the same as the U.S. versions. A new national drug code would be developed to affirm that the foreign product is the same as the U.S. product.

The pharmaceutical industry has come out swinging against the plan. Jim Greenwood, president and CEO of the Biotechnology Innovation Organization (BIO), blasted the move to import Canadian drugs in a statement, stating that, “there is simply no way to adopt an importation scheme that doesn’t jeopardize the health and well-being of America’s patients.”

Pharmaceutical Research and Manufacturers of America (PhRMA) president and CEO Stephen J. Ubl, also issued a statement, stating that, “the Administration’s importation scheme is far too dangerous for American patients. There is no way to guarantee the safety of drugs that come into the country from outside the United States’ gold-standard supply chain.”

Colorado, Florida, Maine and Vermont have all passed laws to allow drug importation from Canada, subject to the approval of the HHS. The Administration’s plan would give these states a path forward.

In Utah, bills to import drugs from Canada were introduced in both the 2018 and 2019 legislative sessions. However, the bills did not pass, amid significant questions around safety and distribution. BioUtah has opposed importation legislation, raising concerns about patient safety, practical implementation and problems with creating a patchwork quilt of state laws.

“We’re all for lowering out-of-pocket costs for the consumer at the pharmacy counter, but importing drugs from Canada is not a silver bullet,” said Kelvyn Cullimore, president and CEO of BioUtah. “We could actually end up doing patients more harm than good in the long run.”

Last month, the Administration withdrew a proposed rule, supported by BIO, PhRMA and BioUtah, among other stakeholders, that would have ensured that drug rebates provided to middlemen, such as Pharmacy Benefit Managers (PBMs), flow through to the consumer to reduce out-of-pocket medication costs.

The Canadian government has expressed concern about the impact of the proposal on the Canadian drug supply. In a recent article, the Los Angeles Times reported that the Canadian Medical Association and 14 other groups representing patients, health-care professionals, pharmacists and hospitals had written a letter to Health Minister Ginette Petitpas Taylor, stating that the “hospital and community pharmacies in Canada are resourced to serve the Canadian public. They are not equipped to support the needs of a country 10 times its size without creating important access or quality issues.” The letter also noted that U.S. importation could encourage more illegal online pharmacies.

In 2003, as part of the Medicare Prescription Drug, Improvement, and Modernization Act, which established the Medicare drug benefit, Congress gave HHS the authority to approve programs to import drugs. However, no secretary has ever signed off on a proposal. In fact, HHS Secretary Alex Azar hasn’t always been a fan of importation. Last year, he suggested that importation was a “gimmick” because it would be difficult to ensure that counterfeit drugs from other countries would not be routed through Canada. He has since stated that the global supply chain of drugs and drug distribution has changed in the last 20 years to the point where importation can actually be done safely.

In May, President Trump directed Azar to explore options for authorization. This importation action plan responds to Trump’s directive and is part of his larger initiative to reduce drug costs. Other drug pricing measures being considered by the Administration and Congress include international price Indexing and inflation rebates. The inflation rebate was approved last week as part of the Senate Finance Committee’s drug package, with the support of the Administration. Both the House and Senate are likely to debate drug pricing legislation in the fall.