It was a long time coming but the Food and Drug Administration greenlit Florida’s plan to import lower cost drugs from Canada.
The agency’s historic move toward drug pricing reform last week allows the Sunshine State to become the first state to buy drugs in bulk for its Medicaid program from Canada.
It’s estimated the action may save up to $150 million just in the first year of the initiative. Since Canada, like many other countries, can negotiate directly with drugmakers to set a lower cost for medications — prescription drugs are cheaper there as a whole than they are in the U.S.
Leslie Isenegger, who leads Real Chemistry’s corporate pricing and public affairs practice, says the decision is a significant one because people have been talking about drug reimportation for more than 20 years and it finally came to pass.
In the early 2000s, Congress passed a law that allowed drug importation under strictly defined circumstances — only if the Department of Health and Human Services (HHS) Secretary deemed importation safe for the American public, and if it would result in cost savings for patients.
However, the law was never implemented, largely due to pushback from industry groups, who argued that drug importation would raise safety issues.
“The fact that the FDA has given a nod to this, just in and of itself, is unprecedented,” Isenegger says.
Unsurprisingly, the pharma industry immediately expressed opposition to the FDA’s approval last week, with lobbying group PhRMA noting in a statement that the decision was “reckless” and that “the importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health.”
Concern follows applause
While the move is a significant one, some health policy experts expressed concern that allowing Canadian drug imports wouldn’t necessarily address the root causes of high drug prices in the U.S., which are complex in nature.
Not that this has stopped several more states from applying to the FDA to be able to import Canadian medication themselves.
In response to safety concerns, FDA commissioner Dr. Robert Califf said the agency would be heavily vetting other state applications to make sure they demonstrate the programs would result in “significant cost savings” to consumers without adding risk of exposure to “unsafe or ineffective drugs.”
For Insenegger, this approval shows the difference between the political theater of policy and the practical implementation of policy, which can take a long time.
“If you look at this approval, the FDA has laid out some pretty extensive requirements that the state of Florida is going to have to meet. They can’t just start buying drugs next week,” she notes.
First, drugs imported from Canada will have to be tested for quality and efficacy, and relabelled in accordance with FDA requirements. Florida will also have to set up a system of reporting back to the FDA. All of that requires infrastructure, investment, and entities within the state to do it in bulk, Isenegger says.
Plenty of other hurdles remain, especially as drugmakers seek to prevent Canadian drugs from making it across the border and sign agreements with wholesalers to prevent exports. Canadian drugs that are in short supply may also be limited.
Importantly, Canada itself has yet to agree to cooperate. This week, Canadian Health Minister Mark Holland emphasized that the country would aim to ensure its own national drug supply would not face shortages as a result of the new Florida plan.
“There is no way we will allow any jurisdiction, be it a state or another foreign jurisdiction, to endanger the Canadian drug supply,” Holland said, according to the CBC. “That is not an appropriate solution to whatever challenges they may be facing.”
Because there are so many hoops to jump through before Florida’s drug importation system is up and running, Isenegger says, it’s hard to speculate what the direct impact on patients might be.
“In systems where governments negotiate pricing, they also tend to negotiate volumes, like guaranteed supply and demand,” she says. “We can’t go grab a piece of that and try to apply it here, and then potentially replicate that across a bunch of different states. I don’t think anyone should assume that the pricing and the structure is going to stay the same.”
Drug pricing debate arises — again
Even if implementing the program may take a while — and no direct effects may be felt until then — in the short-term, the move will fuel continued discussions about drug pricing into the upcoming elections.
In the last year, the Biden administration touted several of its efforts to put drug pricing policy in place to lower costs — including implementing the start of Medicare negotiations and introducing new guidelines for the use of “march-in rights” — all in preparation for the election year.
Isenegger expects drug pricing — and new laws like the Inflation Reduction Act’s Medicare negotiation provision, as well as this Florida import approval — to continue to be a major talking point during the elections this year. That’s where healthcare marketers come in.
“There’s a lot to unpack with these laws and potential impacts,” she says. “The challenge for marketers and brands is to be able to communicate some of those changes, what the business impact will be, and what the impact to patients might be — when the laws themselves are so dense and have so many moving parts.”
Much of that means addressing misinformation about some of the laws, identifying what patients’ biggest concerns are as well as differentiating between real concerns and perceived concerns.
“The goal is to correct any myths or disinformation,” Isenegger says. “Again, the state of Florida is not going to start importing drugs next week. If people read a couple of the headlines about this announcement, they might not know that. It’s important for marketers to understand what their audiences and stakeholders think they understand about the law and make sure that they are communicating what the process or true impact will look like, in a clear and resonant way.”