In Florida, drug re-importation from Canada finds new champions, old snags

Reviewed by Kate Anderton, B.Sc. (Editor)Feb 25 2019

Florida Gov. Ron DeSantis said Wednesday he intends to bring down skyrocketing drug prices by leaning on an existing federal law that could enable the state to import prescription meds wholesale from Canada, where they're much cheaper. He's citing direct support from President Donald Trump, whose administration would have to approve the endeavor.

“He not only supports this, he is enthusiastic,” DeSantis said at a news conference northwest of Orlando.

But it's not clear Florida's idea has actually gotten that level of commitment.

The White House would not directly answer whether it supports letting states import prescription drugs from Canada and would not say whether it has blessed this proposal.

Instead, said spokesman Judd Deere, the president has asked his administration to "learn more details" about Florida's drug-importation plan and "looks forward to educating Governor DeSantis on the many policy options the Trump administration has proposed to reduce costly drug prices for American families." (Those policy options, according to a White House blueprint released last year, don't include importation.)

"President Trump is always eager to discuss ways to lower drug prices for the American people," Deere said.

Still, Florida is joining the growing ranks of states that, squeezed by climbing drug prices, are eyeing the Canadian fix. This idea isn't new: Bernie Sanders, Vermont's left-leaning independent senator, is among a number of longtime champions in Congress.

Legislation has been advanced this year in about a dozen states that would advance wholesale drug importation programs and a bill was introduced in Florida on the same day DeSantis outlined his support.

Vermont, Sanders' home state, where a measure became law last year, leads the pack. But the state has not yet sought necessary federal approval.

And how much would these programs help anyway? While statehouses may be abuzz, in Washington, national politics impedes feasibility. And skeptics question how much relief these initiatives could actually provide.

"I don't think large-scale importation — given both the size of the United States and the potential for retaliation [by the industry] — is likely to save as much as might be projected," said Rachel Sachs, an associate law professor at Washington University in St. Louis, who tracks drug-pricing laws.

Said Ameet Sarpatwari, a lawyer and epidemiologist at Harvard Medical School, "Something like importation could help on the margins in the short term, but it needs to be coupled with some sort of strategy to be sure there is efficient supply in the market."

In order to pursue this approach, states are leaning on a provision in a 2003 law that empowers the Department of Health and Human Services to approve state programs to import medications from Canada, as long as the state can show the practice is safe and saves money.

Once they gain this go-ahead, states would develop wholesale importation programs and then sell the drugs they get from up north to local pharmacies and hospitals, theoretically netting savings.

But HHS has never approved such a move. Last year, HHS Secretary Alex Azar told reporters that importation proposals constituted a "gimmick" rather than any meaningful drug-pricing reform. Vermont plans to formally submit its importation proposal this summer. So far, HHS has been silent on that project.

Last June, though, Azar directed the Food and Drug Administration to establish a working group to study how drug re-importation could help address price hikes and supply disruptions.

DeSantis on Friday acknowledged that he doesn't yet have the backing of federal agencies needed to make his plan go forward.

The guarantee of drug safety is also a challenge. HHS secretaries from both Republican and Democratic administrations have argued over the years that they could not find a process that meets this standard — though many pharmaceutical policy experts dispute this argument. Sarpatwari called it "a red herring."

Policy researchers question whether these proposals would net substantial savings — or even survive the backlash from the powerful pharmaceutical industry.

"If you think about the practicalities of trying to feed a large section of the U.S. market from Canada, it doesn't make much sense," argued Michael Law, a pharmaceutical policy expert and associate professor at the University of British Columbia's Centre for Health Services and Policy Research. "There are too many steps along the way where people will shut it down."

Pharmaceutical companies supplying Canadian wholesalers will quickly notice, he said, if those entities are buying lots more drugs and then selling them back to Americans. And they would cut off supplies pretty quickly.

That's especially true, Law added, for a state as big as Florida, whose population of 20 million people is not that far from rivaling Canada's 37 million.

Importation would also face a formidable opponent from the Canadian government, both he and Sachs said. If Canadian prices are used to bring down American prices, drugmakers have a reason to just charge more up north.

Vermont estimated potential savings of between $1 million and $5 million. Those figures don't account for the costs of setting up the program.

Even with those issues, though, there's active interest in the idea — just ask DeSantis' own constituents. A number of employers and local governments in Florida have been buying drugs from Canada for years. Among them: the Pasco County school district near Tampa.

"The program is working well, and we've had no issues or complaints," said Patricia Howard, an employee benefits official with the school system.

In Florida, as around the country, some businesses also already help consumers purchase drugs from overseas, and they say they see sizable savings.

Tim Booth, owner of Canadian Meds in Lady Lake, Fla., said his customers get prescriptions filled from pharmacies in Canada, Australia, Britain and India. "We get many doctor referrals who fax us prescriptions for their patients," he said.

Canadian Meds, which is located about eight miles from where DeSantis made his prescription drug announcement, is one of about 20 such storefront businesses across Florida that claim thousands of customers each year. These businesses, which technically operate outside the law, started in 2003 and continue with little pushback from regulators.

"Everybody knows drug prices are too high, so anything they can do is good for the American public," Booth said.

But the benefits Booth's customers see may not translate to a statewide program, considering the differences between thousands of customers versus a statewide program. Plus, the federal law that DeSantis' plan would use authorizes importation only from Canada — not Australia, Britain or India.

That said, proposals like these have political implications, both in states, whose budgets are directly squeezed by climbing drug prices, and in Washington, where drug pricing is one area where congressional activity seems more likely.

"This goes along with a broader thinking that's going on about how to lower drug prices in the United States," Law said. "Despite the fact that this might not work — it's not too long before someone figures out something that would."