Florida Wants To Import Medicine From Canada. But How Would That Work?

Jun 18, 2019
Originally published on June 18, 2019 9:08 pm

In Florida, Gov. Ron DeSantis signed a bill last week that, if federal authorities give it their go-ahead — still a very big if — would allow his state to import prescription drugs from Canada. That makes Florida the third state to pass such a law, joining Vermont and Colorado. More such legislative attempts are in the works.

"There have been 27 different bills proposed across the country this year," says Trish Riley, the executive director of the National Academy for State Health Policy. "I think that it's an approach that makes sense to states. It's something they can do now to help their citizens."

The Trump administration has made bringing down the price of prescription drugs a priority, and politicians at every level are looking for ways to make that happen.

Riley says her group didn't help write the Florida plan, although it met with staff and provided resources and model legislation.

"States are very much frustrated by the incredibly high costs of drugs," she says. "When you're a state and you have to balance a budget and you pay for so much prescription drugs through your state employee plan, your municipal workers [and] through Medicaid, the cost of drugs really is front and center. So I think this is very much a bipartisan issue of urgency at the state level."

Prescription drugs are often significantly cheaper outside the United States.

"Canada negotiates drug prices just like many other countries around the world," explains Rachel Sachs, a law professor at Washington University in St. Louis who studies prescription drug pricing. "In the U.S., we've constructed a system where pharmaceutical companies are able to charge far higher prices because there's no mechanism to push back — there's no way to say, 'We're not going to pay for that drug unless we get it at a better price.' "

So what exactly is Florida's plan to import certain drugs from Canada, and how would it work?

The Florida law imagines negotiating with the federal Department of Health and Human Services to establish a pilot program to buy these medications from Canada in bulk. "The state would contract with a wholesaler in Canada, who would provide certain high-cost drugs that the state identifies to a wholesaler in Florida," Riley explains.

So Floridian patients who have a prescription for one of those drugs would just go to their pharmacy and pick up their medicine as usual — all the importing from Canada would be happening in the background.

The law wouldn't set up a way for Floridians to order medicines from Canadian online pharmacies themselves or enable them to drive north across the border to get a deal on the drugs. Rather, it's a big-scale, institutional kind of plan.

Would Floridians even notice that their drugs were coming from Canada under this plan?

"It's possible that the ability to purchase drugs for lower prices at the wholesale level translates into lower premiums overall for particular classes of patients or lower prices at the pharmacy for other patients," says Sachs. "But without more details about the plan, it's hard to know."

And before Florida's plan can become a reality, it still needs to clear some major hurdles.

First, the state needs to work out a lot of details such as which Floridians and which drugs the plan would apply to.

The next hurdle is a big one: The plan needs to get approved by the federal secretary of health and human services, Alex Azar. Though the authority of the secretary to make such an approval has existed since 2003, no secretary has ever exercised that right. To win approval, Florida needs to show that the drugs it wants to import are safe and that the plan will save the state money.

On the safety front, Azar last year cited safety concerns when he, at least initially, dismissed the idea of importing drugs from Canada as a "gimmick," in a meeting at HHS headquarters with the media and others.

"The last four FDA commissioners have said there is no effective way to ensure drugs coming from Canada really are coming from Canada, rather than being routed from, say, a counterfeit factory in China," Azar said. "The United States has the safest regulatory system in the world. The last thing we need is [to have] open borders for unsafe drugs, in search of savings that cannot be safely achieved."

A pharmaceutical industry group also has been running ads in Florida recently, talking about the dangers of counterfeit drugs. Riley, of the National Academy for State Health Policy, says those sorts of ads are misleading.

"I've seen those in every state we're working in," Riley says. "In fact, this program follows current FDA rules. It will use FDA-registered wholesalers. It will simply follow that same supply chain, those same protections, those same assurances of safety."

Azar also said in that May 2018 speech that he doubted that importing Canadian drugs would save U.S. states or patients money.

"[This idea] has been assessed multiple times by the Congressional Budget Office, and CBO has said it would have no meaningful effect," he said. "One of the main reasons is that Canada's drug market is simply too small to bring down prices here. They are a lovely neighbor to the north, but they're a small one. Canada simply doesn't have enough drugs to sell them to us for less money, and drug companies won't sell Canada or Europe more, just to have them imported here."

Since those remarks last year, President Trump has urged Azar to work with Florida on its plan.

"President Trump and Secretary Azar are firmly committed to getting drug prices down," HHS spokesperson Caitlin Oakley told NPR in a written statement. "They are both very open to the importation of prescription drugs as long as it can be done safely and can deliver real results for American patients."

Of course, even if Azar has a change of heart, Florida would face another potential obstacle: getting Canadians and pharmaceutical companies to go along with the plan.

"They need to find willing suppliers for each of the drugs they're aiming to import, and that may be more of a challenge than they anticipate right now," says Sachs, the law professor.

Pharmaceutical companies won't be inclined to cooperate, she says.

"They'll lose money — if it works," explains Sachs. "There are many things they could do all along the supply chain to ensure that drugs aren't diverted to the U.S. in the way that Florida wants."

Canada isn't enthused about the idea either, Sachs says, because Florida's laws could indirectly drive up the price of some drugs in Canada.

When you talk about importing "Canadian drugs," points out Steve Morgan, a professor of health policy at the University of British Columbia, you're not actually talking about drugs made in Canada or otherwise especially Canadian. "They're not actually Canadian drugs," he says. "They are just international medicines, manufactured typically at one or two plants worldwide to supply the entire market with a particular drug."

If Florida's Canadian drug importation plan were in place, Morgan says, "given the scale of manufacturing in the United States, if you were buying a drug made by and sold by an American pharmaceutical company, it's likely you're literally buying the same product shipped to Canada and then shipped back into the United States."

So are Canadians worried that all 21.3 million Floridians are coming for their cheaper drugs? Not really, according to Morgan.

"Canadians feel that the policy is probably not going to result in millions and millions of Americans suddenly getting their drugs from Canada," he says.

"As a consequence of the money to be made by way of being a middleman in the United States, I don't think you're going to see institutional purchasers suddenly shopping in Canada," Morgan adds. "They will be able to get better prices by negotiating continuous discounts right there in the United States."

And maybe that's the point.

Just before Florida's governor signed the bill last week at The Villages, a large retirement community outside Orlando, he said the law was already making a difference.

"It's interesting," DeSantis told a room full of Florida seniors who had been invited to witness the signing of the drug bill. "Since we've passed this bill, some of the American companies have already come to us saying, 'Hey, we're willing to deal and give you better prices' — already, just for the fact that we have this."

The room broke into applause.

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ARI SHAPIRO, HOST:

Florida Governor Ron DeSantis signed a bill last week for importing prescription drugs from Canada. The signing was held at the Villages, a huge retirement community outside Orlando.

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RON DESANTIS: We want people in Florida to be able - if you have the same exact drug here and in Canada and it's half the price in Canada, you should be able to buy it there and have them send it here to Florida.

SHAPIRO: NPR's Selena Simmons-Duffin looked into how the plan will actually work.

SELENA SIMMONS-DUFFIN, BYLINE: The Florida law imagines setting up a program to buy drugs from Canada in bulk. Here's Trish Riley, the executive director of the National Academy for State Health Policy.

TRISH RILEY: The state would contract with a wholesaler in Canada who would provide certain high-cost drugs that the state identifies to a wholesaler in Florida.

SIMMONS-DUFFIN: So I, a Floridian who needs a prescription, would just go to my pharmacy, pick up my medicine as usual. All the importing from Canada is at the wholesale level happening in the background. This is not Floridians clicking around Canadian online pharmacies or driving across the border. It's a big-scale, institutional kind of plan. Florida is the third state to pass this kind of law, joining Vermont and Colorado. In addition...

RILEY: There have been 27 different bills proposed across the country this year. I mean, states are very much frustrated by the incredibly high costs of drugs. So I think this is very much a bipartisan issue of urgency at the state level.

SIMMONS-DUFFIN: The idea has caught fire, perhaps because those cheaper drugs just across our northern border are just too tempting. Canada negotiates their drug prices.

RACHEL SACHS: In the United States, we choose to give the pharmaceutical companies a lot of power in setting the prices that the government will pay.

SIMMONS-DUFFIN: Rachel Sachs, a law professor at Washington University in St. Louis, says that before Florida can get in on those lower Canadian drug prices, there are a lot of hurdles to clear.

SACHS: First, we need to see a more detailed plan from the state. And then we need that plan to be approved by the secretary of Health and Human Services.

SIMMONS-DUFFIN: In the 15 years since it's been possible for the federal HHS secretary to OK a plan like this, it's never been done. The current secretary, Alex Azar, called the idea a gimmick in a speech last year, though President Trump has since urged him to work with Florida on the plan. If Florida gets that federal approval, Canada and pharmaceutical companies would need to help make the plan a reality, and that might be hard. Pharma companies stand to lose money. They've been running scary ads.

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UNIDENTIFIED ACTOR: (As character) Want a law that could flood Florida with dangerous, uninspected drugs.

SIMMONS-DUFFIN: Canada isn't enthused about this idea either, though Steve Morgan, a professor of health policy at the University of British Columbia, says at this point, they're not too concerned.

STEVE MORGAN: As a consequence of the sort of money to be made by way of being a middleman in the United States, I don't think you're going to see institutional purchasers suddenly shopping in Canada. They will be able to get better prices by negotiating continuous discounts right there in the United States.

SIMMONS-DUFFIN: To that point, here's what Governor DeSantis told the room full of seniors gathered for the signing of the drug importation bill.

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DESANTIS: It's interesting. Since we've passed this bill, some of the American companies have already come to us saying, hey, we're willing to deal and give you better prices already.

SIMMONS-DUFFIN: So maybe you don't have to actually bring drugs in from Canada to get lower prices; you can just threaten to. Selena Simmons-Duffin, NPR News. Transcript provided by NPR, Copyright NPR.