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Trump's drug importation plan unlikely to clear cost, risk hurdles, experts say

The Trump administration's two-pronged strategy to import prescription drugs into the U.S. is unlikely to clear the key statutory hurdles of ensuring no additional safety risks to Americans and providing a significant reduction in consumers' costs, health policy experts said.

The plan, unveiled Dec. 18, would let states work with wholesalers and pharmacists to import medicines from Canada into the U.S. and would permit drugmakers to sell their products intended for foreign markets to Americans.

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

Both strategies involve complicated processes outlined in a proposed rule and a set of industry guidelines that may take years to implement.

"If we finalize the rule, we'll finalize that as quickly as possible with any modifications we need to make and go into implementation," Health and Human Services Secretary Alex Azar said during a Dec. 18 news conference in Tallahassee, Fla.

"This is one step in a long process," added Republican Gov. Ron DeSantis of Florida, whose state has submitted a draft plan to HHS.

Economic analysts from the U.S. Food and Drug Administration, which is tasked with carrying out the importation plans, said they were unable to estimate the cost savings from the proposed rule.

In addition, they said the costs of implementing the proposed rule "may fall on the federal government, importation program sponsors, importers and manufacturers of imported drugs."

Benefit question

They also said there was a question about whether the proposal would yield much benefit, given Canada's small drug supply and the potential that manufacturers may try to limit the amount of medicines exported.

Canada opposes the administration's importation plan.

"Our government will protect our supply of and access to medication that Canadians rely on," said Alexander Cohen, press secretary for Canada's Office of the Minister of Health. "These measures will not have any significant impact on prices or access for Americans."

Rachel Sachs, associate professor of law at Washington University in St. Louis, said the administration may have a hard time satisfying the statutory requirements to authorize importation, which it can only do by law if it certifies to Congress that there are no additional safety risks and the program will significantly reduce the costs of drugs.

HHS said it plans to declare it has met those requirements when it issues its final rule — a timeline that is currently unknown.

The agency is depending on states to develop the cost savings information. But if they cannot submit their plans to HHS until the proposed rule is finalized, then the agency cannot make the certification of savings at the time it finalizes the rule, Sachs noted.

"The idea seems to be that the certification is conditioned on states being able to meet the two statutory elements," Sachs wrote on Twitter. "But it's not clear that the statute permits this, and the proposal contemplates importation occurring for two years before assessing these results."

"I remain skeptical that HHS can make the required certification on the current record," she said.

'Burdensome'

The proposed rule is "burdensome" and "bureaucratic" and will likely yield little net savings, said Adam Fein, president of management advisory and business research company Pembroke Consulting, Inc. who called the plan "bonkers."

While the proposal to import cheaper drugs from Canada is a laudable goal, it "would fail to deliver the promised savings," said Kristina Acri née Lybecker, associate professor of economics at Colorado College.

Under the Trump administration's proposed rule, the importer would need to arrange for statutorily prescribed testing of the drug for authenticity, degradation and meet other testing requirements by a U.S. qualifying laboratory if the manufacturer does not perform those activities.

The importer would also be required to ensure the drug complies with all U.S. labeling requirements.

In a recent analysis of 24 drugs obtained from Canada, Acri née Lybecker found the cost of testing a single sample ranged from $2,500 to $4,100.

"The bottom line is that all cost savings evaporate when accounting for the cost of quality testing, the medical consequences of treatment failure and the cost of treating an adverse medical event," she said in a Dec. 18 LinkedIn blog.

Importing drugs under the Trump administration's proposed rule will not save Americans money and may end up costing Canadians more, while endangering patients in both countries, Shabbir Safdar, executive director of The Partnership for Safe Medicines, told S&P Global Market Intelligence.

States like Illinois, Minnesota and Maine have all tried to implement drug importation programs but failed, Safdar said.

He noted that in a 2006 review of Illinois' importation program, the state's auditor general found that 40% of the required inspections of the foreign entities claiming to be pharmacies were never completed and none of the entities ever obtained a pharmacy license.

Within a month of the 2003 launch of Minnesota's importation program, the FDA had to warn the state's governor it was not operating it safely, The Partnership for Safe Medicines noted on its website.

In 2015, a federal court struck down Maine's importation law, declaring that by singling out certain countries from which pharmaceuticals may be imported compromised the federal government's tightly regulated structure and its ability to speak with one voice when regulating foreign commerce.