- An executive order that’s expected to take effect in late November would allow six states to import prescription drugs from Canada.
- Experts say they’re not sure whether this new program would actually lower drug prices for U.S. consumers.
- They note that insulin isn’t one of the drugs approved for importation.
On average, people in the United States spend about $1,200 a year on prescription drugs.
That’s more than anywhere else in the world.
With copays and out-of-pocket costs soaring, it’s no wonder there have been calls for something to be done.
Now 5 weeks out from the election, President Donald Trump has signed an executive order to allow the importation of cheaper medications from Canada.
“My plan will allow states, wholesalers, and pharmacies to do something career politicians have promised for decades. It was very simple as an idea but never delivered. We will finally allow the safe and legal importation of prescription drugs from Canada,” the president announced last week.
But will it be a game changer? Will it even get off the ground?
We did some digging and sought out experts for reactions and answers.
How it’s supposed to work
The presidential order gives a handful of states the green light to start buying cheaper drugs across the border.
The six states are Colorado, Florida, Maine, New Hampshire, New Mexico, and Vermont. Each had already passed laws allowing them to seek federal approval to buy drugs from Canada.
It turns out the secretary of Health and Human Services (HHS) has had the legal authority to allow such a plan since 2003.
To do so, the secretary would have to certify to Congress that the importation would “pose no additional risk to the public’s health and safety” and “result in a significant reduction in the cost of covered products to the American Consumer.”
But no HHS secretary had made that certification.
Florida has already outlined its proposal and is soliciting contractors to act as distributors.
The state would depend on the Food and Drug Administration (FDA) to inspect facilities abroad that produce drugs for both the United States and Canada.
Florida would reroute those drugs from Canadian companies. Canadian drugs are considerably cheaper because the country has a government-run, single-payer healthcare system that caps and negotiates drug prices. The United States does not.
But the drugs would still have to go through additional costs for shipping, inspection, and maybe repackaging, which could raise the prices.
Will consumers see lower prices?
“Possibly,” said Dr. Nancy Nielsen, a senior associate dean for health policy and a clinical professor at the Jacobs School of Medicine and Biomedical Sciences at the University of Buffalo.
She’s also past president of the American Medical Association.
Nielsen points out that HHS Secretary Alex Azar predicts the plan would result in significant savings.
“But the final rule says HHS is unable to make any estimates about savings because it doesn’t know which drugs will be imported,” she told Healthline.
One popular medication that wouldn’t be imported across the border?
Insulin.
“It will exclude biologics, for example, and won’t include any drugs available in Canada but not approved for use in the U.S.,” Nielsen added.
That’s not good news for Americans who have been part of the so-called #CaravanToCanada who travel north to buy the insulin they need to treat their diabetes.
The travelers report saving hundreds of dollars. It’s sometimes the difference between paying $56 for a vial of insulin in Canada versus $230 at home.
Plan could face major hurdles
One big hurdle to making the plan work is whether Canada is on board.
Canadian pharmaceutical companies have already voiced their opposition.
Reuters reports that some of Canada’s major pharmaceutical distributors are subsidiaries of U.S. companies. They would be unlikely to participate in a program to lower prices.
When asked about it last week, Canadian Prime Minister Justin Trudeau said he would take the idea into account, but he didn’t seem enthusiastic.
“Our priority will always be to ensure an adequate and safe supply for Canadians first and foremost,” he said at a news conference.
In fact, a study from last year questions whether there’s even enough Canadian supply to make it work.
Researchers for the Canadian Health Policy Institute developed models based on the total number of prescriptions dispensed in both the United States and Canada in 2018.
They estimated that if 20 percent of U.S. drugs were sourced from Canada, that country’s drug supply would last 165 days. If 40 percent of U.S. drugs were sourced from Canada, their supply would last 118 days.
Researchers warned an importation plan could result in serious shortages.
And there’s been major opposition from U.S. pharmaceutical companies. In a statement sent to Healthline, the Pharmaceutical Research and Manufacturers of America (PhRMA) said it’s still reviewing the final rule.
“However, we continue to have grave concerns with drug importation that exposes Americans unnecessarily to the dangers of counterfeit or adulterated drugs. It is alarming that the administration chose to pursue a policy that threatens public health at the same time that we are fighting a global pandemic,” the statement reads.
The organization didn’t say whether it would launch a legal challenge.
Next steps
The final rule says the plan goes into effect 60 days after it’s published in the Federal Register.
That would make it late November, unless it encounters roadblocks.
“I’m not optimistic that the rule will help many Americans afford their prescription drugs,” said Rachel Sachs, JD, MPH, an associate professor of law at Washington University in St. Louis School of Law.
“I do think opposition from both Canadian regulators and pharmaceutical firms will limit its potential impact, even if it survives litigation,” she told Healthline.
“Because these problems are foreseeable, it’s disappointing to see the administration pursuing this strategy when others might be more beneficial,” she added.
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