The idea of importing prescription drugs from Canada is gaining momentum. States have been taking the lead with Vermont, Florida, and Colorado signing into law bills to permit the importation of drugs.
Expensive drugs in America
Drugs sold in countries where their governments negotiate with pharmaceutical companies, such as Canada and the United Kingdom, tend to be far cheaper than in the United States. The public knows this and they are demanding our leaders do something.
♦ States are trying to do what the federal government has failed to do. They are passing legislation to allow the importing of prescription drugs in the hope that prices will come down.
Many details still need to be worked out.
• It is not clear who would be helped by these efforts.
• All plans would ultimately require federal approval to become legal.
• They will also need to survive court challenges from the pharmaceutical industry and their allies.
A few of our elected officials have proposed that CMS be allowed to negotiate drug prices for Medicare participants. The drug industry with the support of Republicans in Congress have been able to prevent this.
♦ Democratic candidates for president in 2020 are all promising something big. The public enjoys hearing that they will beat down big bad pharma.
♦ The Trump administration talks the talk but has not walked the walk. Lots of promises to push drug prices down but no results.
In early July, the White House quietly gave-up on its plan to ban rebates that drugmakers pay to pharmacy benefit managers.
President Trump’s idea to make pharmaceutical companies list their prices in television ads went down in flames when big pharma sued and won.
♦ The Trump administration, fearful of negative headlines during the 2020 election, is now trying to put a positive spin on the administration’s halfhearted efforts to promote the importation of drugs.
President Trump has come out in support of Colorado’s plan. But he has done little to help make it happen.
• All initiatives by states must first be approved by the U.S. Health and Human Services Secretary, Alex Azar. A former pharmaceutical lobbyist and former drug company executive. He has criticized the idea that imported drugs from Canada can reduce drug prices in America.
Mr. Azar recently held a press conference where he told how he was now working toward making imports a reality. The truth is in the details but we only have a rough outline.
Plans that might get approved
On July 31st, the Trump administration outlined a proposal to allow the legal importation of cheaper prescription drugs from Canada and other countries. But it is not what the average citizen is hoping for.
The proposal looks like it is designed to appease the drug industry, provide a few good sound bites but not actually accomplish much.
♦ Individuals will continue to be prevented from legally importing drugs for their personal use.
The Trump plan states, wholesalers and pharmacists would be permitted to draft proposals to import prescription drugs. Vendors would actually do the importing and consumers would have to purchase through approved vendors. The savings from such a scheme are doubtful.
The drug industry has successfully lobbied to block past efforts to allow importation. It looks like they have found another way to pull the strings.
Under the Trump plan there would be two pathways for importing drugs.
Pathway 1 for large-scale buyers of drugs such as states, wholesalers, and pharmacies. Pathway 2 for drug manufactures but not buyers.
• Pathway 1 would be simpler and less expensive drugs.
• Pathway 2 would be for more complex and expensive drugs like insulin and biological drugs.
Most people can understand where this is headed.
It is doubtful that drug companies will want to take advantage of Pathway 2 since the industry opposes drug importation. There is little chance there will be significant price reductions permitted on the most expensive and most desperately needed drugs.
Simpler and less expensive drugs will probably be allowed in but after the middlemen cover their expenses and takes their profits consumers shouldn’t hope for much of a break.
When will it happen?
This proposal for importing drugs won't happen for some time. It is only a proposal. Or more simply an idea thrown to the media to try to overshadow actions being taken by states.
Details will need to be worked out and then undergo regulatory review. The review could take months if the drug industry doesn’t push for more controls. The truth is the review process probably will take years.
What was not made clear is that the Trump plan will only be a pilot program. The administration has not said whether they hope to ever scale it up nationally.
Pharma to control the flow
U.S. drugmakers argue against imports, saying they would put the safety of the U.S. drug supply at risk. Knowing they cannot prevent imports forever; they hope to control the flow of imported drugs by helping to set the rules of the game.
♦ Pharmaceutical companies are in a position to withhold supply. In doing so, they could cause both Canadian and import prices to go up.
The industry is already trying to scare Canadian officials into thinking that U.S. importers would drain the drug supply in Canada. They are encouraging Canada to push back on American’s importing from Canada. Have Canada be the bad guy.
There is a fear that drug companies will retaliate against Canadian pharmacies that sell medicines to U.S. buyers. Senator Bernie Sanders introduced a bill to try to prevent drug companies from doing this. The GOP won’t allow a vote on it.
The threat is real. In the past, some large manufacturers threatened to penalize internet pharmacies that shipped cheaper drugs to the U.S. Some pharmacies were even forced to report shipment details.
Rep. Elijah Cummings (D-Md.), who has launched drug pricing hearings this year as chairman of the House Oversight Committee, authored a similar bill. It is not expected to be signed into law.
Canada is not happy
The Canadian government hasn’t done anything yet. But they are worried.
So far, the U.S. has not done anything other than talk. The Congress is not likely to pass a bill any time soon.
In 2005, an earlier Canadian government promised a bill that would restrict drug exports in response to similar U.S. proposals to allow imports. The Canadian government never followed through.
Canada will hold national election coming this fall. Right now, they are more focused on finding ways to bring their drug prices down.
♦ Canada’s prices are cheaper than the U.S. but they tend to be more than what most Europeans pay.
If U.S. imports or manufacturers actually create shortages and start driving up prices in Canada then we can expect push back on U.S. imports.
“There’s no question that Americans are paying too much for drugs”, says Amir Attaran, a health-law specialist at the University of Ottawa. “But ... tapping out your neighbor is a nasty, rotten thing to do.”
What to expect
It is not likely that we will see any reining in of drug prices in the near future. The GOP will continue to resist anything that even remotely resembles a type of price control.
Even if the Senate and the White House should flip into Democratic hands in 2020, it is unlikely that any major changes will happen overnight. Why?
Follow the money
The drug industry favors power. Kaiser Health News found that since the beginning of 2017 drugmakers have contributed to 217 Republicans and 187 Democrats. The industry gives slightly more to the party in power.
The 2018 election cycle brought in close to $17 million dollars in contributions for members of the House. Republican banked about $10 million and Democrats $7.
On the Senate side, the 2018 election cycle brought in close to $7 million in pharma contributions. Democrats netted $4.3 million, overtaking Republicans who took in $2.6 million.
While we wait for Washington, you might like to read the article Buying Prescriptions Online.