US plan for ‘safe importation’ of drugs is slammed by industry

The Trump administration has revealed its latest plan to curb medicine prices in the US – by importing them from lower-cost markets overseas.

The Department of Health and Human Services (HHS) have published a plan that outlines two potential pathways that would “lay the foundation for the safe importation of certain drugs originally intended for foreign markets.”

Importing medicines has been mooted as a possible solution to the US’s escalating spending on medicines for years, but has been resisted for a number of reasons, including the fear that importation could allow counterfeit or substandard medicines to be introduced into the US supply chain by the back door.

The HHS proposal would allow state governments, pharmacies, wholesalers and drug manufacturers to come up with proposals for safe importation of medicines, though these would have to be submitted for federal approval before being enacted.

Pathway 1 would focus on imports from Canada, with “conditions to ensure the importation poses no additional risk to the public’s health and safety.” It would apply to drugs authorised for sale in Canada that are versions of FDA-approved prescription medicines.

Pathway 2 would involve manufacturers importing versions of FDA-approved drug products that they sell in foreign countries that are the same as the US versions, although its not clear yet what the incentive would be for that approach.

HHS says this would “potentially include medications like insulin used to treat diabetes, as well as those used to treat rheumatoid arthritis, cardiovascular disorders, and cancer.”

HHS Secretary Alex Azar said in a statement that “this is the next important step in the Administration’s work to end foreign freeloading and put American patients first” – even though he has previously dismissed the idea of importation as a “gimmick.”

Lowering drug prices for many Americans - including our great seniors! At my direction, @HHSGov @SecAzar just released a Safe Importation Action Plan. Our Governors will be very happy too! @GovRonDeSantis @GovofCO https://t.co/VIxmZWgYM2

— Donald J. Trump (@realDonaldTrump) July 31, 2019

The plan seems a tough sell since it has perennially been resisted by Republican lawmakers, although two Florida Republicans - Governor Rick DeSantis and Representative Matt Gaetz – have tabled a Canadian import plan that also has the President’s backing.

Importation has been tackled by the Congressional Budget Office, which concluded it would have no meaningful effect on the US drugs bill, largely because Canada's drug market is too small.

The pharma industry also seems to be unimpressed. Trade organisation PhRMA said that the plan is “ far too dangerous for American patients” and could worsen the opioid crisis.

It asserts there is “no way to guarantee the safety of drugs that come into the country from outside the US’ gold-standard supply chain. Drugs coming through Canada could have originated from anywhere in the world and may not have undergone stringent review by the FDA.”

Evercore ISI analyst Umer Raffat has also poked holes in the proposal, pointing out that many of the most expensive medicines – such as biologics and intravenous and inhaled products – are excluded, and he also questioned why a brand-name manufacturer would want to import its own product from overseas for less.

Last year, Azar asked the FDA to establish a working group to examine how to safely import prescription drugs from other countries in the event of a dramatic price increase for a drug produced by one manufacturer and not protected by patents or exclusivities. There’s been little news from that effort, but this proposal goes much further.

Acting FDA Commissioner Ned Sharpless, who stepped into the role after the departure of Scott Gottlieb, said driving down drug prices “requires a comprehensive approach and we must continue to look at all innovative solutions to this challenge,” whilst acknowledging there are “operational challenges” to address.

“Today’s proposal is the result of the hard work by the dedicated staff of the FDA, in close collaboration with HHS and the White House, to identify potential pathways we can pursue to support the safe importation of certain prescription drugs.”

That’s a big shift in position for the agency, which hasn’t given much credence to importation proposals under the last few Commissioners, including Sharpless’ predecessor Scott Gottlieb.

Trump’s record to date on mechanisms to reduce drug pricing has been pretty poor, with proposals to abolish the current system of medicines rebates and mandating list prices in television ads for medicines both abandoned.