Canada nixes Trump-DeSantis plan to import cheaper drugs from up North

By: - December 2, 2020 12:03 pm

Gov. Ron DeSantis speaks during a signing ceremony authorizing Canadian drug imports at the White House with President Trump on July 24, 2020. Credit: Screen grab from White House feed

Canada will block a plan — much vaunted by President Trump and Gov. Ron DeSantis — to import cheaper Canadian pharmaceuticals into the United States as a way of lowering domestic health care costs.

Health Minister Patty Hajdu cited the need to prevent drug shortages in the Canadian market.

“Our health care system is a symbol of our national identity and we are committed to defending it. The actions we are taking today will help protect Canadians’ access to the medication they rely on,” Hajdu said in a written statement released on Saturday.

Health Minister Patty Hajdu. Credit: Canadian government

“Canada is a small market, representing 2 percent of global drug sales, that sources 68 percent of its drugs internationally. The need for vigilance in maintaining the national drug supply continues,” the ministry said.

DeSantis communications chief Fred Piccolo has not yet responded to a request for comment.

Only five days earlier, the DeSantis administration had sent its plan to manage Canadian drug imports to the U.S. Department of Health and Human Services, although the details weren’t publicly released. DeSantis has pitched the Trump administration’s support for the program as evidence of the benefit to Florida of his closeness to the president.

On that same day, organizations including the Pharmaceutical Research and Manufacturers of America (PhRMA) filed a lawsuit in federal court in Washington, D.C., challenging the importation plan.

The complaint alleges HHS Secretary Alex Azar didn’t meet his legal obligation to ensure any imported drugs would be safe and also questioned whether it would save American consumers money.

Canadian pharmaceuticals can run between 30 percent and 190 percent cheaper, depending on the drug, the Phoenix has previously reported.

The Food and Drug Administration “has noted it is struggling to keep up with approving medicines while working around the clock to support COVID-19 therapeutics and vaccine development. Despite this, the administration is willing to divert precious FDA resources away from these efforts and to expose Americans to the risks that come with drug importation schemes,” PhRMA Executive Vice President and General Counsel James Stansel said in a written statement.

“It is particularly disturbing that the administration is punting the responsibility for demonstrating safety and cost savings to state governments despite the clear requirement under federal law that the secretary of HHS must certify that imported drugs both pose no additional risk to public safety and will lead to significant savings for the American consumer,” Stansel continued.

Another setback came in October, when the state announced that no company had bid on a proposed $30 million contract to act as middleman in procuring Canadian drugs, as Kaiser Health News reported.

Trump signed an executive order on July 24 authorizing the import plan with DeSantis at his side. The governor had pressed the Legislature to authorize the plan last year and made multiple trips to The Villages, the massive retirement community in Central Florida, to promote the idea.

Congress voted in 2003 to allow importation of pharmaceuticals but no presidential administration had tried it until now.

Of course, Trump was defeated for reelection, but President-elect Joe Biden has also voiced support for importing drugs, according to The Washington Post. Additionally, he supports negotiating with pharmaceutical manufacturers to lower prices, according to the Kaiser Family Foundation.

The Florida Agency for Health Care Administration, or ACHA, has identified 150 drugs that could be eligible for import from Canada for use by state agencies, including the Department of Corrections, which spends one quarter of its budget on pharmaceuticals.

The state would hire a wholesaler or pharmacy to manage the imports strictly within federal guidelines governing documentation, labeling, tracking supplies, and compliance with FDA regulations.

Officials pegged potential savings at $150 million per year, but it never was clear when those savings might be realized or whether the plan would work at all.

Azar opened formal rulemaking for the proposal in December and released draft guidance for pharmaceutical companies that want to import drugs that they manufactured overseas for overseas markets, often at less cost. That prong ostensibly could mean cheaper drugs for individual Floridians who don’t depend on state health programs.

Azar, who previously dismissed the whole idea as an unworkable “gimmick,” said in December that he hoped Canada would cooperate.

But the Canadian government, which pays less for drugs because it negotiates prices with the pharmaceutical industry, has long been on record against allowing its market to be siphoned into the United States.

The United States allows manufacturers and distributors to set prices, but legislation that cleared the U.S. House last year would have allowed such negotiations for the U.S. market.

Hajdu’s statement would appear to cut off access to the Canadian market as a cheap way out. She noted that Canada already is experiencing drug shortages because of COVID-19.

In an interim order, Hajdu barred export of any pharmaceutical if doing so would “cause or exacerbate” a shortage in Canada, according to a policy background paper.

“The interim order applies to all drugs subject to mandatory shortage reporting requirements in Canada, as any shortage of these drugs would harm the health and safety of Canadians. This includes all drugs that are eligible for U.S. bulk importation and additional categories, such as biologics and controlled substances,” the paper says.

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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.