The Trump administration proposed a rule Wednesday to allow states to import prescription drugs from Canada, moving forward a plan announced this summer that the president has said will bring cheaper prescription drugs to Americans.
Importation of drugs from Canada as a way to lower costs for U.S. consumers has been considered for years. Alex Azar, secretary of the Department of Health and Human Services (HHS), called the move “a historic step forward in efforts to bring down drug prices and out-of-pocket costs.”
Industry trade groups in both countries opposed the plan, saying it will not lower costs and could hurt Canadian drug supplies.
Azar said HHS would also offer guidance to drugmakers that wish to voluntarily bring drugs they sell more cheaply in other countries into the United States for sale here.
The pathways for importation were announced in July, when Azar unveiled a “Safe Import Action Plan.”
Azar could not provide an estimate of how soon Americans could start seeing cheaper drugs from Canada. The proposed rule would need to pass through a 75-day comment period before being finalized, he said.
“We’re moving as quickly as we possibly can,” he added.
Governors of states including Florida, Maine, Colorado, Vermont and New Hampshire have already expressed an interest in importing drugs from Canada once the pathway to do so is fully in place, Azar said. States would be required to explain how any proposed drug imports would reduce drug prices for consumers.
The proposal faces opposition from large U.S. pharmaceutical and biotech companies.
Jim Greenwood, current head of biotech industry group BIO and a former Republican congressman, said that importation would not result in lower prices for consumers, citing nonpartisan budget experts and past U.S. Food and Drug Administration commissioners.
“Today’s announcement is the latest empty gesture from our elected lawmakers who want us to believe they’re serious about lowering patients’ prescription drug costs,” Greenwood said.
Ottawa also has criticized the plan. Canada’s ambassador to the U.S. said last month that importing medicines from north of the border would not significantly lower U.S. prices. Reuters previously reported that Canada had warned U.S. officials it would oppose any import plan that might threaten the Canadian drug supply or raise costs for Canadians.
The federal government has suggested it could step in and block exports in the event that any such plans threaten Canada’s drug supply. In fact a previous government already introduced a bill in the House of Commons that would have allowed a block on exports.
The Paul Martin government introduced Bill C-83 in 2005 when American politics was previously awash in talk of importing from Canada. But it never became law, as the Martin government was defeated soon thereafter and the issue died down in the U.S.
Canada drug supply ‘insufficient’
“The drug supply is insufficient for the Canadian market, let alone trying to divert it to a much larger market like the U.S.,” said Daniel Chiasson, president of the Canadian Association for Pharmacy Distribution Management, a trade group that represents drug distributors.
“We’re not supportive of any policy initiative or policy proposal that has the capacity to threaten the stability of medications available to Canadians.”
The Canadian Pharmacists Association (CPHA) was still analyzing the announcement Wednesday afternoon to assess whether it might have a practical impact.
“With an average of five new drug shortages reported each day in Canada, we are not in a position to supply a country 10 times our size. These proposals could significantly restrict the availability of medications for our patients,” CPHA chair Christine Hrudka said in a statement to CBC News.
Speaking to reporters in Florida on Wednesday, Azar said Canadians’ cheaper drug prices were the result of a free ride off of American investment and innovation.
“Obviously the Canadians are going to be looking out for Canadians,” he said. “We’re here to put American patients first.”
Many prescription medicines would be excluded from importation from Canada, such as biologic drugs, including insulin, controlled substances and intravenous drugs.
Tip-toeing around big pharma
U.S. President Donald Trump, a Republican, has struggled to deliver on a pledge to lower drug prices before the November 2020 election. Health-care costs are expected to be a major focus of the campaign by Trump and Democratic rivals vying to run against him.
The Trump administration in July scrapped an ambitious policy that would have required health insurers to pass billions of dollars in rebates they receive from drugmakers to Medicare patients.
Also in July, a federal judge struck down a Trump administration rule that would have forced pharmaceutical companies to include the wholesale prices of their drugs in television advertising.
Both the House of Representatives and the Senate are proposing drug pricing bills that contain some of the proposals Trump has advocated, such as indexing public drug reimbursements to foreign drug costs.
But Trump has said he will veto the Democrat-led House bill if it comes to his desk on the grounds that it would slow down innovation.
“Once again, the Trump White House is tiptoeing around big pharma with a spectacularly pinched and convoluted proposal that excludes insulin and has no actual implementation date,” said Henry Connelly, a spokesman for U.S. Speaker of the House Nancy Pelosi, a Democrat.
“If President Trump actually wants to lower drug prices, he should pick up the phone and tell Senator McConnell to send him the House-passed Lower Drug Costs Now Act.”