The administration of President Donald Trump revealed a plan on July 31 that would let Americans buy lower-cost prescription drugs from Canada.
The action plan (pdf) released by the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) included two pathways to get lower-cost drugs to consumers.
One relies on the Federal Food, Drug, and Cosmetic Act to allow people to import drugs from Canada. That was expected to lead to “significant cost savings” for Americans, the FDA said.
“Under this pathway, States, wholesalers, or pharmacists could submit plans for demonstration projects for HHS to review outlining how they would import Health-Canada approved drugs that are in compliance with section 505 of the FD&C Act,” the agency stated.
The second path allows manufacturers to import versions of FDA-approved drugs that the companies sell in other countries and are the same versions used in the United States.
“The Administration has reason to believe that manufacturers might use this pathway as an opportunity to offer Americans lower-cost versions of their own drugs. In recent years, multiple manufacturers have stated (either publicly or in statements to the Administration) that they wanted to offer lower-cost versions but could not readily do so because they were locked into contracts with other parties in the supply chain. This pathway would highlight an opportunity for manufacturers to use importation to offer lower-cost versions of their drugs,” the FDA stated.
Health and Human Services Secretary Alex Azar said that Trump had been pushing to lower the cost of drugs and that he spoke with the president about the issue Tuesday night.
“I just got off the phone with him,” Azar told CNBC. “Working on a plan on how we can import drugs safely and effectively from Canada so the American people get the benefit of the deals that pharma themselves are striking with other countries.”
“President Trump has been clear: for too long American patients have been paying exorbitantly high prices for prescription drugs that are made available to other countries at lower prices,” Azar added in a statement.
“Today’s announcement outlines the pathways the Administration intends to explore to allow safe importation of certain prescription drugs to lower prices and reduce out of pocket costs for American patients. This is the next important step in the Administration’s work to end foreign freeloading and put American patients first.”
“We support the President and Secretary’s efforts to bring down drug prices for Americans,” added Acting FDA Commissioner Ned Sharpless.
“We know there are many operational challenges to address through each of these pathways, and are actively working through them as we look to formally announce these policies, with opportunity for public comment, in the coming months.”
Most patients take affordable generic drugs to manage conditions such as high blood pressure or elevated blood sugars. But polls show concern about the prices of breakthrough medications for intractable illnesses like cancer or hepatitis C infection, whose costs can run to $100,000 or more. And long-available drugs like insulin have also seen price increases that have forced some people with diabetes to ration their own doses.
The administration’s move comes as the industry is facing a crescendo of consumer complaints over prices, as well as legislation from both parties in Congress to rein in costs.
Trump is supporting a Senate bill to cap medication costs for Medicare recipients and require drugmakers to pay rebates to the program if price hikes exceed inflation. Democrats in the House are pressing for a vote on a bill allowing Medicare to directly negotiate prices on behalf of millions of seniors enrolled in its prescription drug plan.
Separately, the Trump administration is pursuing a regulation that would tie what Medicare pays for drugs administered in doctors’ offices to lower international prices.
The importation idea won praise from a key lawmaker, Sen. Chuck Grassley (R-Iowa) chairman of the panel that oversees Medicare. Grassley said on Twitter that importation would lower prescription drug costs, and all drugs from abroad must be verified as safe by the FDA. He and presidential candidate Sen. Amy Klobuchar (D-Minn.) have a bill to facilitate importation.
Eyeing his reelection campaign, Trump has made lowering prescription drug prices one of his top goals. As a candidate, he called for allowing Americans to import prescription drugs, and recently he’s backed a Florida law allowing state residents to gain access to medications from Canada.
Drug prices are lower in other economically advanced countries because governments take a leading role in setting prices. But in the United States, Medicare is not permitted to negotiate with drug companies.
Some experts have been skeptical of allowing imports from Canada, partly from concerns about whether Canadian suppliers have the capacity to meet the demands of the much larger U.S. market.
But consumer groups have strongly backed the idea, arguing that it will pressure U.S. drugmakers to reduce their prices. They also point out that the pharmaceutical industry is a global business and many of the ingredients in medications sold in the United States are manufactured abroad.
The Associated Press contributed to this report.