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White House budget office vets rule to permit importation of foreign drugs

The White House Office of Management and Budget is now reviewing a proposed rule that would permit U.S. states to import prescription drugs from Canada and other foreign nations, according to a government notice.

The details of the proposed rule under consideration at the Office of Management and Budget are not known, but the U.S. Department of Health and Human Services in late July outlined two pathways as potential courses of action for importing prescription medicines into the U.S. as a way to lower Americans' drug costs.

SNL ImageHHS Secretary Alex Azar and President Donald Trump
Source: AP Photo

The drug industry, Canada and others have objected to HHS' two pathways.

"Rather than surrender the safety of Americans by importing failed polices from single-payer countries, we should work on solutions here at home that would lower patient out-of-pocket costs at the pharmacy counter," the Pharmaceutical Research and Manufacturers of America said in a statement.

While Canada's Office of the Minister of Health is sympathetic to U.S. concerns about high drug costs, the northern nation's biopharmaceutical market is "simply too small to have any real impact on American prices," spokesman Alexander Cohen told S&P Global Market Intelligence.

"Canada represents a mere 2% of global pharmaceutical consumption, compared to the U.S.' 44%," Cohen said. "Not only do we spend less on pharmaceuticals than the state of Florida alone, we also import nearly 70% of our supply."

Cohen noted Canadian health officials have been in contact with the White House and HHS but must ensure that "our citizens can get and afford the medication they need."

Finding a way

HHS Secretary Alex Azar had repeatedly called drug importation a "gimmick" in his first few months in office but later said the administration was trying to find a safe way to make it happen.

President Donald Trump has been promising to let states import drugs into the U.S. He said in an Oct. 3 speech in Florida that his administration would soon approve a proposal from the state's governor, Ron DeSantis, a Republican, to import prescription drugs from Canada and other countries.

DeSantis submitted his state's plan to HHS in late August — a document Florida officials said was intended to serve as a model to inform HHS as it develops its importation rules.

At an Oct. 11 campaign rally in Louisiana, Trump said he had already given Florida the go-ahead to carry out its drug importation plan, though HHS did not confirm those remarks and the White House declined to comment.

SNL ImageFlorida Gov. Ron DeSantis
Source: AP Photo

Trump said at the rally that he was also giving other governors the right to go to Canada and other states or countries to buy the drugs instead of "going through this horrible system where the Democrats refuse to allow you to do anything to cut the price of drugs," despite drug importation being a longtime issue supported by his rival party and a topic rejected by most Republicans.

At least three other states — Colorado, Vermont and Maine — have joined Florida in adopting legislation to permit foreign importation of prescription medicines.

Colorado said it was working on its plan to submit to HHS. The state's health department is holding meetings this month to obtain input from various stakeholders.

Sen. Chuck Grassley, R-Iowa, who has partnered with Democrats on drug importation legislation, said in an Aug. 6 letter to the HHS and the U.S. Food and Drug Administration that the Trump administration should at least reinstate surprise inspections of foreign manufacturing facilities if moves forward with its pathways. He also expressed concern about the tracking and tracing of imported drugs.

Rule could take years

Rachel Sachs, an associate professor of law at Washington University in St. Louis, said HHS faces a number of roadblocks in implementing drug importation and any proposals could take years to implement.

The two pathways HHS outlined earlier this year rely on other parties — states, wholesalers, pharmacies and manufacturers — to do the federal government's work for it on demonstrating whether drug importation can be done safely and effectively, Sachs wrote in a July 31 article in the policy journal Health Affairs.

The pathways involve pilot projects and a complicated process that would let manufacturers sell products intended for foreign markets in the U.S., she noted.

In a Nov. 4 tweet, Sachs said she found it a bit odd that the proposed regulation was listed as having no international impacts. "Even under the regulatory criteria for that term, not sure how they come to that conclusion," she tweeted.

In July, Ned Sharpless, the outgoing acting FDA commissioner who has now returned to his full-time position as director of the U.S. National Cancer Institute, acknowledged there were "many operational challenges" ahead that must first be addressed.

If HHS moves forward with its proposed rule, those challenges will fall to the new FDA commissioner to handle — potentially Stephen Hahn, Trump's nominee to lead the agency.