The Department of Health and Human Services released an action plan on Tuesday taking the first steps to importation of cheaper drugs from countries such as Canada.
HHS expects to release a proposed rule at a later date to set up a demonstration program in which states, pharmacists or wholesalers could get permission to import drugs from Canada. The second part would enable manufacturers to get a new drug code to lower their prices.
But the plan comes with some major question marks, including:
Will Canada play ball?
Any importation plan will require buy-in from the Canadian government, and a statement from the country’s Health Ministry shows that could be a hard sell.
A key question surrounding any importation effort is whether pharmaceutical companies will limit supplies to Canada because of a potential loss in profits from the U.S. market. Another is whether the country even has enough supplies to satisfy the high U.S. demand for lower-priced drugs.
The health ministry referenced this concern in a statement delivered after the release of the action plan.
“Ensuring that Canadians have access to the medicines they need is one of our top priorities: we constantly monitor Canada’s drug supply, will be working closely with health experts to better understand the implications for Canadians and will ensure there are no adverse effects on the supply or cost of prescription drugs in Canada,” the ministry said in a statement.
But Reuters reported earlier this month that Canadian officials have told the Trump administration that importation will threaten the country’s drug supplies.
Will states want to play ball?
Four states have passed laws to start up importation programs: Maine, Vermont, Florida and Colorado, according to the National Academy for State Health Policy.
But other states are also considering importation. The Connecticut and Minnesota legislatures considered bills for importing drugs, but they failed to pass before the legislatures’ governing sessions adjourned, the academy said.
Two other states—West Virginia and New Mexico—alongside the District of Columbia passed laws to explore importation, according to the National Conference of State Legislatures.
How will safety issues be addressed?
The Food and Drug Administration has been reluctant to endorse importation due to safety concerns. The agency has long said it couldn’t guarantee the safety or effectiveness of imported drugs.
Under the plan, a state, wholesaler or pharmacist could submit a demonstration project for HHS to outline how they would get approval to import drugs sold in Canada. Any demonstration would have to meet specific safety conditions for drug quality, record keeping, testing and protection against counterfeiting, the plan said.
The specific conditions will be outlined in the proposed rule that hasn’t been released yet. Other safety requirements for the demonstration include track-and-trace requirements to trace the pathway of the drug along the supply chain from manufacturer to pharmacy.
It remains unclear at this time what bar Health and Human Services will set for getting approval for a waiver for safety. Safety issues could become a talking point for opponents of the plan. The pharmaceutical lobby has already referenced it in its opposition to the plan.
“There is no way to guarantee the safety of drugs that come into the country from outside the United States’ gold-standard supply chain,” said Steven Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America.
Will congressional Republicans interfere?
Drug importation from Canada has long been a popular idea in Congress … among Democrats, not Republicans.
Republican lawmakers have long shot down drug importation as unworkable. Even HHS Secretary Alex Azar called importation a “gimmick” last year.
There are already warning signs of GOP concerns about other drug price measures. The Senate Finance Committee passed a bipartisan drug price bill by a 19-9 vote earlier this month, with several GOP senators balking at an inflationary cap on drug prices paid by Medicare.