After more than three years, the U.S. Food and Drug Administration in January authorized Florida to import select prescription drugs from Canada.
Joe Biden made lowering the cost of prescription drugs a focal point of his 2020 presidential campaign, and promised to allow U.S. consumers to import drugs to decrease costs. The FDA finalized the first step in that process, but the state must clear several obstacles to realize its hopes of buying Canadian drugs.
Florida submitted its request to the FDA in 2020, and a year later, President Joe Biden's administration issued an executive order allowing the FDA to work with states on drug importation programs.
Florida's plan includes 14 drugs to treat HIV/AIDS, diabetes, hepatitis C, prostate cancer, mental illness and others. Only inmates, those covered under Medicaid, or patients served at facilities under the Florida Department of Health will have access.
A KFF Health Poll showed 78% of people support allowing Americans to buy prescription medication from Canada. Other states including Maine, New Hampshire, New Mexico, North Dakota, Texas and Vermont have submitted similar importation requests to the FDA, but they have not yet been approved.
Florida Gov. Ron DeSantis said the FDA-approved program will save his state up to $180 million this year. That does not necessarily mean Floridians will see a decrease in their out-of-pocket costs. KFF Senior Vice President Tricia Neuman said that even if importation proceeds, the savings would likely go to the state's Medicare budget, rather than lowering out-of-pocket costs for Floridians.
Overall, experts concurred that the Canadian import movement is unlikely to bear fruit before his term ends; and, given opposition from Canada, it's unlikely to lower prescription drug costs.
"At this pace, and given opposition from Canada, I would be surprised to see [importation] happening soon," Neuman said.
"Importation is still not underway, and I am doubtful that it will ever get off the ground," says Matthew Fiedler, a senior fellow with the Center on Health Policy at The Brookings Institution.
Why does Canada oppose importation?
The FDA has to approve Florida's imported drugs individually to ensure they are tested and relabeled to U.S. standards before the state could start importing drugs. But the biggest hurdle will be the Canadian government.
"Canada is unlikely to ever be willing to allow drugs to be exported on a significant scale," Fielder said. "If Canada allowed drugs sold in Canada to be exported to the U.S., then drug manufacturers would demand higher prices in Canada to avoid undercutting their position in the U.S. market."
Currently, many foreign manufacturers sell prescription drugs directly to the U.S., but their manufacturing facilities are approved by the FDA and the drugs are not imported through other countries.
Because Canada's drug prices are significantly lower than in the U.S., drug manufacturers would lose money if they sell goods to Canada, only to be imported to the U.S. These companies could instead just sell to the U.S. for higher prices, so there would be no incentive to sell in Canada. This could create a drug supply shortage for Canadians.
"Canada's market is about the size of California. As a country, they don't have enough drugs to share with the U.S. market," said Erin R. Fox, an adjunct professor at the University of Utah College of Pharmacy.
Health Canada issued a statement against the importation plan, prohibiting drugs from being sold outside the country if the sale could hurt Canadian drug supply.
Fielder said the solution to cheaper prescription drugs must come within the U.S. drug market. He doubts importation is a realistic goal and doesn't believe there is much more Biden can do because countries or drug manufactures will oppose it.
The Biden administration has taken action to domestically decrease costs. With the Inflation Reduction Act of 2022, the out-of-pocket cost of insulin covered under Medicare Part B and D plans is capped at $35 a month.
The Inflation Reduction Act also forces drug companies to pay Medicare when certain drug prices increase faster than the inflation rate. As part of the Medicare Drug Price Negotiation Program, the Department of Health and Human Services selected 10 drugs for Medicare to negotiate with drug companies. The round of negotiations will end Aug. 1, and if there is an agreement, the new prices will be factored into Medicare in 2026.
Neuman said that it's important to view the importation policy in context of the Biden administration's other actions, including "the popular proposals to allow the government to negotiate drug prices, the $35 insulin cap, the cap on out-of-pocket spending, and the inflation rebate."
Florida's case is the first time the FDA has approved importing prescription drugs for consumers.
However, none have been imported and experts expressed doubt that importation will occur anytime soon. With no movement expected soon on this promise, we rate it Stalled.
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