Canada importation plan

Drug industry lashes Trump for Canada importation plan

By SARAH OWERMOHLE and ARTHUR ALLEN

The Trump administration jumped into a fight with drugmakers Wednesday by promising to allow importation of cheaper drugs from Canada and other countries, advancing an idea the pharmaceutical industry and many members of the president’s party have long opposed.

Trump’s health department Wednesday said it would open up two pathways to let states and companies test drug importing programs in the coming months, promising that modern drug distribution supply chains would allow federal drug regulators to guarantee the products’ safety.

It wasn't clear how widely — or quickly — importation would occur under the plan, but the administration is eager to tout the idea as part of President Donald Trump’s efforts to fight drug prices after recent setbacks to his agenda. Health and Human Services Secretary Alex Azar, a former pharmaceutical executive who until recently opposed importation, said the new plan could allow Americans to access safe and cheaper drugs in some cases.

But the pharmaceutical industry swiftly attacked the plan, citing Azar’s own words from just last year, when he called drug importation a “gimmick.”

"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," said Stephen Ubl, CEO of Pharmaceutical Researchers and Manufacturers of America, in a statement.

"There is simply no way to adopt an importation scheme that doesn't jeopardize the health and well-being of America's patients," added Jim Greenwood, president of the biotech-heavy organization BIO. "This is a misguided attempt to keep an ill-informed campaign promise."

The idea of drug importations has been brought up repeatedly since Congress imposed the current strict import limits in 1987. Any loosening of the rules was always stymied by safety concerns and industry opposition. A high-level 2004 report — co-authored by Azar, then HHS' senior lawyer — argued against the idea.

The announcement came a day after a Democratic presidential debate in which Sen. Bernie Sanders (I-Vt.), a champion of drug importing, cited the high cost of insulin as a prime example of profiteering in the health care industry. House Oversight Chairman Elijah Cummings (D-Md.), whom Trump has demonized in recent days, has led congressional investigations into the soaring price of insulin, a nearly century-old treatment.

However, the administration’s plan likely would not immediately allow for insulin imports. The first regulatory pathway HHS laid out is limited to certain drugs from Canada, said acting FDA Commissioner Ned Sharpless. It would exclude controlled substances, IV drugs and biologics such as insulin and the popular anti-rheumatoid arthritis drug Humira.

In addition, FDA will provide manufacturers the opportunity to offer a lower price for imported versions of drugs they sell overseas. This might include medications like insulin for diabetes and drugs for rheumatoid arthritis, cardiovascular disorders and cancer, HHS said. This second pathway, which will require FDA to write new guidance "in the coming months," would potentially be open to all products and countries, Sharpless said.

"FDA is laying out a framework, for the first time in its history, for drug imports that will save money," Azar said on a call with reporters. "We all know how unfair it is that other countries are paying lower prices for the same drugs, and we're taking action."

Republican health leaders in Congress offered measured support for the administration's plan. Tennessee Sen. Lamar Alexander, chairman of the upper chamber's health committee, welcomed it but said FDA must maintain its "gold standard for safety and effectiveness." Oregon Rep. Greg Walden, the top Republican on the House Energy and Commerce Committee, praised Trump's engagement on drug prices and said he "looked forward to continuing our work with HHS and FDA as we explore these paths to lower drug prices."

Some Senate Democrats pointed out that the administration has refused to support direct government negotiations with drugmakers — a top priority for them — while now advancing a plan to import medicines from a country that does.

Sen. Mark Warner (D-Va.) said it would be a better idea to “give the federal government the same rights the Canadian government and the British and other governments have, which is to negotiate for drug prices.”

Azar opened up to the idea of importation after Trump pushed him to work with Florida officials on it earlier this year. Four states have passed legislation to import drugs in recent years, but states must receive HHS approval before the programs can move forward.

"What we’re saying today is, ‘We’re open, there is a pathway,'" Azar said, as long as importers can convince FDA they can protect safety and lower prices.

The Trump administration this month faced a couple of high-profile defeats in its push to lower drug costs. A federal judge threw out a rule that would have required drugmakers to disclose list prices in TV ads. Days later, the administration withdrew a rule that would have required insurers and companies managing drug benefits to provide any discounts directly to patients in most government health plans.

The White House, meanwhile, has been working with the Senate on a drug pricing package that would cap Medicare drug costs, but that’s been met with resistance from some Republican lawmakers and drugmakers.

The importation plan outlined Wednesday could face opposition from Canadian officials, who have warned the Trump administration they will oppose any U.S. plans to buy prescription drugs that could cause shortages or raise drug prices in Canada. Pharmacists there are already complaining about growing shortages.

Azar said he would leave the Canadian objection issue to drug importers to address. “It would be premature to speculate on the specific impact of these pathways on any country," an HHS spokesperson added.

Asked why a drug company would want to lower a price on a drug it can charge more for in the United States, Azar said "perverse incentives” such as rebates to prescription benefit managers had driven up list prices. Under the proposal, the drugs could be imported in a way that would give savings directly to consumers. The details, he added, “would be for [manufacturers] to figure out.”