Getting cheap and safe Canadian drugs to Floridians is a big unknown

By: - November 8, 2019 7:00 am

Credit: John Moore/Getty Images

Florida regulators are proceeding with plans to import cheaper prescription drugs from Canada, but questions persist about when the drugs will begin flowing, whether the Canadian government will object, and whether officials can guarantee the safety of these drugs.

Canadian consular officials have expressed concern about the potential of sapping Canada’s prescription drug supply to feed Florida’s market, state officials acknowledged.

But if the plans work out, the cheap drugs initially would go to programs involving Florida’s most vulnerable – the poor, the disabled, the mentally ill and state prisoners.

The state also is designing a broader system intended to benefit private patients.

Overall, state officials estimate savings to taxpayers as high as $150 million annually if the cheap drugs programs come to fruition. But that may take time.

During recent hearings before the Florida Senate Health Policy Committee, Mary Mayhew – secretary of the state Agency for Health Care Administration, or ACHA, which would administer part of the importation program – said officials were waiting for the U.S. Department of Health and Human Services to issue regulations.

Mary Mayhew
State Medicaid director Mary Mayhew appears before Senate committee.

When that might happen is a “big unknown,” she conceded. “Truly, that couldtake up to two years. And we haven’t seen any formal proposal of rulemaking yet.”

Meanwhile, ACHA has been working with the Department of Business and Professional Regulation to design importation protocols. Mayhew said her agency – working with an outside vendor to save the state on administrative costs – has already identified potential suppliers. Officials haven’t spoken with any yet, however, she said.

The origin of Florida’s cheap drugs plan

The Legislature voted during its spring regular session to authorize the program, with considerable encouragement from Gov. Ron DeSantis.

Congress voted in 2003 to allow such imports, but no U.S. Health and Human Services secretary instigated rulemaking until President Donald Trump lit a fire under his agency chief, Alex Azar, who’d previously dismissed the idea as a “gimmick.”

DeSantis has pitched the Trump administration’s movement on the matter as evidence of the benefit to Florida of his closeness to the president.

As of Aug. 1, Florida was one of three states to try this approach – the others were Vermont and Colorado.

The Florida Legislature actually approved two import programs.

ACHA’s will benefit state and local programs that buy drugs – Florida Medicaid, county health departments, state-licensed mental health treatment and developmental-disability programs, and the Department of Corrections.

“We have identified over 150 brand and generic drugs that could potentially be imported from Canada,” Mayhew said. Excluded from that list are pharmaceuticals the state already acquires at discount under Medicaid and a federal program authorizing discounts during public health emergencies.

“One of the drug costs where we would see the largest benefit are the HIV drugs,” she said.

Meanwhile, the Department of Business and Professional Regulation is designing a broader system intended to benefit private patients. That agency is scheduled to describe its progress to the Senate committee in December. Its press office didn’t immediately reply to the Florida Phoenix’s request for comment.

How do Canadian drug prices compare to U.S. costs?

Drugs are cheaper in Canada – between 30 percent and 190 percent cheaper, depending on the pharmaceutical – because like most advanced nations it imposes price controls that the United States lacks, according to a legislative staff analysis.

The Legislature also is looking into the role played by pharmacy benefit management services, which act as middlemen between manufacturers and health plan sponsors including private, union, and government employee group plans and state health program. These organizations are sometimes blamed for inflating costs.

As for the import plan, Mayhew estimated savings to taxpayers as high as $150 million annually. She figured the cost of running the plan at around $25 million per year.

Safeguards – including supply chain tracking and testing – will ensure product safety and keep counterfeit drugs out of the pipeline, she said. The state would closely monitor the vetting.

Officials began identifying vendors in May and expect to issue invitations to negotiate a contract this fall or winter, Mayhew said, and to sign an agreement next spring. Her agency is asking the Legislature for more than $25 million to operate the program.

On the federal level, the health and human services agency has been writing rules to govern such importation arrangements, and the state submitted a “concept paper” describing its plan in August.

“Our hope is that the concept paper will serve as a model to inform HHS as they develop rules in line with President Trump’s recent directive on the importation of prescription drugs,” she said. “I am confident that HHS will see that, under Florida’s program, imported drugs will be cheaper and just as safe.”

During the hearing, State Sen. Dennis Baxley asked whether the push to bypass domestic suppliers has inspired them to negotiate lower prices “so that this massive change is not necessary.” He’s a Republican who represents Sumter and parts of Marion and Lake counties.

“What we have said all along is that this is not the silver-bullet answer. It is but one avenue to address the crisis that this state and country face in terms of skyrocketing prescription drug costs,” Mayhew replied.

The state is pursuing additional ways to save money, she said, including “value-based” purchasing arrangements, which reward service providers for good patient outcomes – paying rebates, for example, if a patient taking a drug avoids costly hospital care.

“While that is important to the Medicaid program and can certainly work to reduce those costs, it does not have the broad impact that we are continuing to seek both through the opportunity with the additional state programs,” Mayhew said.

“Ultimately, we want to see this move to an opportunity where all Floridians have access to much lower-cost prescription drugs. We see the Canadian import program as the avenue to drive that.”

Will the cheaper Canadian drugs be safe?

Baxley questioned whether the agency can promise the drugs will be safe.

A group called The Partnership for Safe Medicines has been warning of the potential for counterfeit drugs to evade the screening process. The organization’s website has been closely following developments. Some of the nonprofit groups comprising the partnership receive money from the pharmaceutical industry, according to Kaiser Health News.

“The safety and security of that process, I think, will be paramount in the minds of individuals when they’re looking at a new avenue by which they’ll receive these,” Baxley said.

“Maybe we’re looking for a little more comfort zone — that we’re covered on safety and security. Is there anything you could say to illuminate that a little bit more?”

Mayhew replied that the vendor would have to operate strictly within federal guidelines governing documentation, labeling, tracking supplies, and compliance with U.S. Food and Drug Administration regulations.

“Our ability to demonstrate all of that through the vendor will have to be explicitly required in the contract. Which is why we, obviously, want to see a greater clarity through these federal rules,” she said. She was “optimistic” the agency can write a contract that can ensure safety.

Sen. Lori Berman, a Palm Beach County Democrat, wanted to know whether officials have spoken to Canadian vendors and whether they’ll be able to supply drugs in sufficient quantities.

“We have some real serious concerns about how this program can operate, and if it’s going to be able to operate,” she said.

Mayhew replied that she has discussed the project with Canadian consular officials, who expressed concern about the potential about sapping Canada’s prescription drug supply to feed Florida’s market. Lt. Gov. Jeanette Nuñez also has talked to the Canadians.

“Our comment back is, the state of Florida is not going to do anything that undermines the ability for Canadians to have appropriate access to the need to address the demand in Canada. Because this has never been done, and because we have never had a federal framework, it is hard to predict what kind of business opportunities may present,” Mayhew said.

Representatives of the Canadian consulate in Miami had no immediate response to questions posed by the Phoenix.

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Michael Moline
Michael Moline

Michael Moline has covered politics and the legal system for more than 30 years. He is a former managing editor of the San Francisco Daily Journal and former assistant managing editor of The National Law Journal.