Trump is exploring ways to let the US import cheaper prescription drugs from Canada and other countries

  • The Trump administration wants to let Americans import cheaper drugs from Canada and other countries.
  • Many details of the proposal still need to be worked out, and the timeline for implementation is unclear.
  • The leader of BIO, a trade group representing biotech companies, called it “a misguided attempt to keep an ill-informed campaign promise.”
  • President Donald Trump has long said he wants to lower US drug prices, but so far he has fallen short of that promise.
  • Both Republicans and Democrats have long touted the idea of lowering drug costs for US consumers by importing drugs from Canada, and healthcare is becoming a major issue in the 2020 presidential campaign.
  • Visit Business Insider’s homepage for more stories.

The Trump administration is exploring ways to allow Americans to import cheaper prescription drugs from Canada and other countries, the Department of Health and Human Services said on Wednesday.

The move holds out the promise of lower-cost prescription drugs, but many details still need to be worked out. The administration will look into new rules to allow states, pharmacies, and other parties to bring in drugs from Canada as part of pilot projects. The US Food and Drug Administration could also allow manufacturers to bring into the US versions of their drugs that they sell overseas.

“We all know how unfair it is that other countries are paying lower prices for the same drugs, and we’re taking action,” HHS Secretary Alex Azar said on a Wednesday-morning call with reporters.

Azar said changes in the “landscape and opportunities” for safe foreign drug importation, such as the rise of large companies that distribute medicines around the world, had made it possible for the administration to explore imports, an idea he’s previously criticised. HHS and the Food and Drug Administration will set up a framework for importation and want to see proposals from states, wholesalers, and pharmacies, Azar said.

It could take months to years before importation starts

“What we’re saying is, ‘Here’s the criteria, here’s the road map,'” Azar said. “Work with us, convince us that you have a game plan that could work.'”

The timeline for drug importation is unclear because the administration plans to put out the policy through a rulemaking process that can take months to years. After that, it will be up to states and manufacturers to do the heavy lifting and prove out how drug importation could work safely.

“This is not anywhere close to being implemented,” said Rachel Sachs, a law professor at Washington University in St. Louis who studies drug pricing.

The pharmaceutical industry criticised the rule, saying it wouldn’t work and would jeopardize patient safety.

“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,” Stephen J. Ubl, the CEO of the industry group PhRMA, said in a statement.

Not all drugs may qualify. For instance, insulin, a diabetes drug whose high price tag has drawn frequent criticism, wouldn’t be eligible for importation under one of the pathways outlined in the proposal.

The other pathway could allow more drugs to be imported, possibly at a lower price than what they’re sold for in the US, but would require pharmaceutical companies to participate. Azar said the Trump administration had heard interest from some drugmakers in doing that.

The proposal has little immediate effect

Spencer Perlman, the director of healthcare research at the investment adviser and consultancy Veda Partners, said the proposal was likely to have little immediate effect, as it would take a long time to get off the ground and is relatively limited in scope. Stocks in the biotech and life-sciences sector were muted in trading after the news.

“While the headline sounds foreboding, in actuality the announcement is quite limited and very likely will have only a relatively small (if any) impact,” Perlman said. “Bottom line, there’s not a lot of ‘there’ there.”

The Evercore ISI analyst Umer Raffat called the proposal a “snooze,” adding that “this proposal isn’t quite that bombshell importation proposal that Street had feared.”

President Donald Trump has promised since the start of his presidency to deliver lower-cost drugs for the US, as part of a broader push toward transparency around healthcare costs, but had so far fallen short on that promise.

Earlier this month, the Trump administration scrapped a plan that would have banned a form of payment between drugmakers and pharmacy benefit managers known as rebates. On Monday, the administration came out with a proposed plan that would require hospitals to list out their prices for procedures that they negotiate with health plans, with the intent of giving consumers the ability to shop around. Health plans and hospitals weren’t happy with the proposed rule.

The new drug-importation proposals also received pushback from the biotech trade group BIO on Wednesday. BIO CEO Jim Greenwood questioned how safe such a plan would be for patients and added that the costs of implementation would largely outweigh any savings.

“This is a misguided attempt to keep an ill-informed campaign promise,” Greenwood said.

Healthcare is a big political issue for Democrats and Republicans

Both Republicans and Democrats have long touted the idea of lowering drug costs for US consumers by importing drugs from Canada.

Sen. Bernie SandersScott Eisen/Getty ImagesSen. Bernie Sanders, the Democratic presidential candidate, in Windsor, Canada, on Sunday talking about the cost of insulin in the US versus Canada.

Just this week, the Democratic presidential candidate Bernie Sanders joined people with diabetes on a trip to Canada to buy cheaper drugs, highlighting the disparity in cost between the US and its northern neighbour. Healthcare has become a major issue in the 2020 Democratic primary campaign, and candidates clashed in a debate Tuesday night over proposals to reshape the US system and guarantee care for all.

Another major question hanging over Wednesday’s announcement is how Canada will respond. Canada opposes US drug importation because it could cause shortages there or raise the country’s drug costs, Reuters reported earlier this month.

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