Aug 1, 2019

Importation isn't a silver bullet to lower drug prices

Illustration: Sarah Grillo/Axios

The Trump administration is moving forward on the traditionally Democratic policy of importing prescription drugs from abroad, but the impact — if the proposals are actually finalized — could be pretty muted.

The big picture: While importation could help some patients afford their drugs, the policy overall is an attempt to take advantage of other countries' lower drug prices while avoiding taking direct action to limit prices in the U.S.

Details: HHS announced 2 pathways for drug importation yesterday. The first — which is a more traditional form of importation — would allow patients to import certain drugs to from Canada.

  • Notable exceptions are biologics — including insulin — controlled substances and intravenously injected drugs.
  • States, wholesalers and pharmacies would submit demonstration proposals to HHS, which would be time-limited and subject to safety and cost conditions.

Between the lines: This will likely take years to implement, although several states have already expressed interest in taking advantage of it.

Yes, but: There's a lot of reasons to be skeptical about its impact — especially because Canada doesn't have large quantities of drugs compared to the U.S. supply and it's not thrilled about the idea of sending them to us.

  • But still, "this rule could have a lot of impact in specific cases, such as with single-source drugs in rare diseases where there is a massive disparity between Canadian and U.S. prices," conservative health wonk Avik Roy tweeted.

The second pathway would allow drugmakers to import versions of FDA-approved drugs that they're selling in other countries, or to sell the same drug at a different price in the U.S. by working around their contracts with supply chain middlemen.

  • It appears to address complaints by drug companies:, according to HHS' outline of its plan. But "it’s not clear to me why manufacturers would want to do that," said Vanderbilt's Stacie Dusetzina.

The other side: "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 Steve Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, in a statement.

The bottom line: "By definition, importing is not going to be a large-scale solution," Dusetzina said.

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