Prescription drug prices in the US are steadily rising and, with little progress being made to solve the problem at the national level, state legislators are now taking matters into their own hands. Already in 2018, 84 bills have been filed from 34 different US states, all seeking to reduce prescription drug prices for state constituents. Many of these bills focus on internal US issues and seek to drive down costs by making domestic drug development and approval processes more efficient and increasing competition through the approval of generics and biosimilars.
However, some states have decided to look outside of the US for a solution. Recognizing that drug prices are considerably lower in other countries, Utah and five other states have put forward bills which would allow the importation of cheaper drugs from Canada.
In Canada, the exact same drugs, produced by the same manufacturers, cost on average 30 percent less than they do in the US. The state-level drug importation bills would allow contracted wholesale pharmacies to purchase these cheaper products, from FDA-approved wholesalers and facilities in Canada, and provide them to US patients. The hope is that this will not only provide cheaper alternatives for patients, it will also put pressure on companies to lower their drug prices in the US in order to remain competitive.
The main opposition to the bill, unsurprisingly, comes from pharma companies who claim that Canadian drugs could be less safe and importing them could pose a threat to US patient health. However, backers of the state plans claim that this would only be a concern if the drug importation was being proposed as an open, ‘free-for-all’ program, which it is not.
Under the Utah bill, for example, wholesalers will only be allowed to import drugs from a list created by the state’s department of health and reviewed by the U.S. Department of Health and Human Services (HHS). Only those drugs deemed safe and appropriate for importation, according to state and federal law, will be included in this list. This will ensure that the medicines being imported will be made by the same reputable companies that provide the drugs in the US, often in the same manufacturing facilities. The only difference between the US and Canadian products will, therefore, be the price.
There are also concerns that, even if such importation programs could provide access to safe, affordable products, drug companies would most likely find a way to counter importation. Industry could quite easily discourage Canadian wholesalers from providing their products to the US by dwindling Canada’s drug supply or increasing Canada’s drug prices. As the success of an importation program relies on Canadian wholesalers’ willingness to participate, suppliers in the US would likely find it hard to secure long term supply, if there are signs that Canadian patients would be negatively affected.
As of yet, no drug company has come forward to overtly say that this would be their course of action, and the trade group Pharmaceutical Research and Manufacturers of America (PhRMA) has said that it could not speculate on how individual drug companies may react to importation.
It seems that states are determined to make the importation programs work, despite these concerns. According to the text in the Utah bill, if the HHS denies the approval of the state program, experts will continue to submit applications each year until 2023. This bill has already been passed by the state House of Representatives and will now move to the Senate for consideration. Similar legislative action is being taken in states, including Vermont, West Virginia and Oklahoma.