Trump administration pushes plan to import drugs from Canada

John Tozzi

The Trump administration is paving the way for Americans to buy lower-cost prescription medication imported from Canada, in another push to reduce drug prices.

The administration on Wednesday offered two proposals to loosen longstanding federal restrictions on importing foreign drugs. Health and Human Services Secretary Alex Azar described the effort as “one of the highest priorities we have in the administration.”

President Donald Trump has frequently touted the idea of bringing medicine from overseas to help lower costs for Americans, saying the U.S. pays too much for prescription drugs. In other large industrialized countries, government health systems or regulators often play a bigger role in setting pharmaceutical prices.

Azar, in a call with reporters ahead of the plans’ release, described a notice of proposed rulemaking he said would allow states to work with wholesalers or pharmacies to import certain drugs from Canada. He said both Republican and Democratic governors have expressed interest in the idea, including in Colorado, Florida, Maine, New Hampshire and Vermont.

Importation plans by states and other entities would have to be approved by the Food and Drug Administration, said Assistant Secretary for Health Brett Giroir. Controlled substances, biologic drugs such as insulin and intravenous drugs wouldn’t be eligible. Canadian drugs for import to the U.S. would have to be approved by authorities in both countries, relabeled and tested “to ensure that they are authentic, not degraded” and meet U.S. standards, Giroir said.

Industry groups opposed the idea. The Pharmaceutical Research and Manufacturers of America, which represents drug companies, called it “a political maneuver” that could endanger patients, and the U.S. Chamber of Commerce likened it to importing “socialized price controls.”

Patients For Affordable Drugs Now, an advocacy group, welcomed the proposal but said it was insufficient.

“It’s not a solution that will lower drug prices for the overwhelming majority of Americans,” the group said in an email.

The reaction from the pharmaceutical industry wasn’t unexpected. When the administration previewed its drug-importation plan over the summer, the industry lobby opposed it. The proposal also incited backlash in Canada, where some said it could lead to shortages of critical medicines.

Avoiding Middlemen

On the call Tuesday, Azar didn’t answer a question about whether the current plan had been discussed with Canadian authorities.

Another proposal, described as a draft guidance, would let drug manufacturers import FDA-approved drugs intended for sale abroad. The plan would only apply to brand-name drugs.

Azar described the policy as a way to circumvent drugmakers’ contracts with intermediaries such as pharmacy-benefit managers, “where they have to funnel a certain amount of rebate money to those middlemen.”

The health secretary has taken aim at drug rebates in the past, though the administration retreated from a drive to eliminate rebates from Medicare prescription plans. Azar, a former executive of drugmaker Eli Lilly & Co., said Tuesday that allowing pharmaceutical companies to get a new national drug code would let them sell the same medicines at lower cost in the U.S.

“What drug companies have told us, and we’ll have to see if they live up to this, is that if they could only get a new national drug code for that exact same drug,” said Azar, “they could issue that drug at a lower list price, bringing savings to patients at the pharmacy counter.”

Both proposals are preliminary and subject to public comment and revision.