Importing cheaper drugs
Four states – Colorado, Florida, Maine, and Vermont – this year have enacted measures to establish programs to import cheaper prescription drugs from Canada and, in Florida’s case, potentially other countries. Six other states are considering such legislation.
Medicines in Canada and other countries are less expensive because those nations negotiate directly with drugmakers to set prices.
“This is an area where states once feared to tread,” said Jane Horvath, a consultant who has advised Maryland and Oregon, among other states, on prescription drug policy. “Now both Republicans and Democrats view it as a way to infuse more price competition into the marketplace.”Hurdles remain, however. A 2003 law allows states to import cheaper drugs from Canada but only if the federal Health & Human Services Department approves a state’s plan and certifies its safety. Between 2004 and 2009, the federal government halted nascent drug import efforts in five states.
Even so, momentum for importation has built in recent years in states and Congress as drug prices have continued to rise. And the Trump administration this summer threw its support behind the idea.
Florida Gov. Ron DeSantis, a Republican and close ally of President Trump, signed his state’s measure into law on June 11, claiming he did so after Trump personally promised him the White House would back the initiative.
On July 31, HHS announced an “action plan” to “lay the foundation for safe importation of certain prescription drugs.” The plan includes a process to authorize state initiatives. It also requires formal regulatory review, including establishing Food and Drug Administration safety criteria. That process could take up to 2 years.
Two big problems remain: In the weeks since the announcement, the Canadian government has opposed any plan that would rely solely on Canada as a source of imported drugs. The pharmaceutical industry also opposes the plan.
Creating drug affordability boards
Maine and Maryland enacted laws this year that establish state agencies to review the costs of drugs and take action against those whose price increases exceed a certain threshold.
Maryland’s law establishes a five-member board to review the list prices and costs of drugs purchased by the state and Maryland’s county and local governments. The board will probe drugs that increase in price by $3,000 or more per year and new medicines that enter the market costing $30,000 or more per year or over the course of treatment.
If approved by future legislation, upper payment limits on drugs with excessive price increases or annual costs would take effect in January 2022.
“My constituents have signaled loud and clear that bringing drug prices down is one of their top priorities,” said state Sen. Katherine Klausmeier, a Democrat representing Baltimore, who sponsored the legislation.
Maine’s law also establishes a five-member board. Beginning in 2021, the board will set annual spending targets for drugs purchased by the state and local governments.
