Late last month, the Trump administration released a plan that would green-light the importation of certain drugs from Canada and potentially other foreign countries.
The administration’s proposal comes on the heels of legislative pushes by Republican Governor Ron DeSantis of Florida and Democratic Governor Jared Polis of Colorado to import drugs from Canada. Other states are considering similar measures.
Drugs tend to be less expensive abroad because foreign governments aggressively control their prices. Importing cheap drugs from Canada would seem to be a straightforward way to bring those lower prices to America.
But the strategy won’t work. Drug importation will deliver minimal, if any, savings to patients. And it could jeopardize public health by increasing the risk of dangerous foreign counterfeits entering the U.S. market.
The administration’s proposal has two parts. First, it would allow states, wholesalers, and pharmacies to seek federal authorization to import certain prescription drugs from Canada. Explicitly excluded from that list are insulin and other complex biologics whose high prices have attracted the ire of patients and their families.
Further, about nine in ten prescriptions filled in the United States are for generics, which tend to be cheaper here than in Canada.
In other words, the administration’s importation proposal would only touch a small slice of the U.S. prescription drug market—and would do nothing to bring down the cost of many of the most expensive drugs.
The second part of the proposal would allow drug manufacturers to import products originally manufactured and intended for foreign markets—and instead sell them in the United States at lower cost. It’s unclear why any manufacturer would jump through those hoops to sell its products for less than the prevailing U.S. price.
Health and Human Services Secretary Alex Azar defended the administration’s proposal as “historic” and representative of “the bold nature of President Trump’s agenda for lowering drug costs.”
Hardly. Azar was right last year when he dismissed drug importation as a “gimmick.”
The government’s own research backs up that conclusion. The Congressional Budget Office has found that importation could trim drug costs by about 1% over a decade. That’s minuscule.
Canada also does not have enough drugs to accommodate a surge in orders from the United States. If just one in five U.S. drug prescriptions were filled by Canada in 2018, the country’s drug supplies would be depleted in only 165 days, according to a study from the University of Texas at Austin.
And Canadian officials are not likely to stand by idly while Americans try to raid their medicine cabinet. As Kirsten Hillman, Canada’s acting ambassador to the United States, recently said of drug importation, “Not only are we too small of a market, Canada cannot increase its domestic pharmaceutical drug supply to meet U.S. demand.”
Then there are the safety concerns. Canada is not willing to be the drug regulator for the United States. “Canadian authorities do not inspect every shipment of products headed for the U.S. marketplace to ensure that packages don’t contain adulterated, counterfeit or illegal drugs,” said Leona Aglukkaq, a former Canadian health minister. “Canada does not have the resources to undertake such comprehensive searches.”
The Trump administration claims that only trustworthy U.S. entities—states, wholesalers, and pharmacies—will be allowed to import drugs from Canada. But once importation is legal, American consumers are likely to go online to try to find cheap Canadian drugs if they can’t get them through the official channels.
That’s a problem. Counterfeiters have developed effective techniques for hiding their true identity online and posing as Canadian pharmacies. A 2005 investigation from the FDA found that more than four in five drugs from online pharmacies claiming to be Canadian were actually from some other country. Dr. Andrew von Eschenbach, the FDA commissioner at the time, lamented that “there are Internet sites that claim to be ‘Canadian’ that, in fact, are peddling drugs of dubious origin, safety, and efficacy.”
Paint thinner, antifreeze, arsenic, mercury, fentanyl—these are some of the ingredients that have been found in counterfeits seized by American authorities. Other fakes have been found to contain little to no active ingredient.
Secretary Azar has openly admitted that “When one goes online and buys drugs that are supposedly from a Canadian drug store, you are taking your lives into your own hands,” Secretary Azar said on a press call last month before the release of the administration’s importation plan.
Legislation passed in 2003 empowered the HHS secretary to allow foreign drug importation if, among other things, he or she could formally certify that imports pose no risks to patients. Every single one of Secretary Azar’s predecessors has declined to do so.
There is no way to ensure that foreign drugs are safe. Even limited importation schemes pose an enormous public health risk—for next to no benefit.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her next book — False Premise, False Promise: The Disastrous Reality of Medicare for All — will be published by Encounter in January 2020.
The Epic Folly Of Trump’s Drug Importation Crusade
Sally C. Pipes
Late last month, the Trump administration released a plan that would green-light the importation of certain drugs from Canada and potentially other foreign countries.
The administration’s proposal comes on the heels of legislative pushes by Republican Governor Ron DeSantis of Florida and Democratic Governor Jared Polis of Colorado to import drugs from Canada. Other states are considering similar measures.
Drugs tend to be less expensive abroad because foreign governments aggressively control their prices. Importing cheap drugs from Canada would seem to be a straightforward way to bring those lower prices to America.
But the strategy won’t work. Drug importation will deliver minimal, if any, savings to patients. And it could jeopardize public health by increasing the risk of dangerous foreign counterfeits entering the U.S. market.
The administration’s proposal has two parts. First, it would allow states, wholesalers, and pharmacies to seek federal authorization to import certain prescription drugs from Canada. Explicitly excluded from that list are insulin and other complex biologics whose high prices have attracted the ire of patients and their families.
Further, about nine in ten prescriptions filled in the United States are for generics, which tend to be cheaper here than in Canada.
In other words, the administration’s importation proposal would only touch a small slice of the U.S. prescription drug market—and would do nothing to bring down the cost of many of the most expensive drugs.
The second part of the proposal would allow drug manufacturers to import products originally manufactured and intended for foreign markets—and instead sell them in the United States at lower cost. It’s unclear why any manufacturer would jump through those hoops to sell its products for less than the prevailing U.S. price.
Health and Human Services Secretary Alex Azar defended the administration’s proposal as “historic” and representative of “the bold nature of President Trump’s agenda for lowering drug costs.”
Hardly. Azar was right last year when he dismissed drug importation as a “gimmick.”
The government’s own research backs up that conclusion. The Congressional Budget Office has found that importation could trim drug costs by about 1% over a decade. That’s minuscule.
Canada also does not have enough drugs to accommodate a surge in orders from the United States. If just one in five U.S. drug prescriptions were filled by Canada in 2018, the country’s drug supplies would be depleted in only 165 days, according to a study from the University of Texas at Austin.
And Canadian officials are not likely to stand by idly while Americans try to raid their medicine cabinet. As Kirsten Hillman, Canada’s acting ambassador to the United States, recently said of drug importation, “Not only are we too small of a market, Canada cannot increase its domestic pharmaceutical drug supply to meet U.S. demand.”
Then there are the safety concerns. Canada is not willing to be the drug regulator for the United States. “Canadian authorities do not inspect every shipment of products headed for the U.S. marketplace to ensure that packages don’t contain adulterated, counterfeit or illegal drugs,” said Leona Aglukkaq, a former Canadian health minister. “Canada does not have the resources to undertake such comprehensive searches.”
The Trump administration claims that only trustworthy U.S. entities—states, wholesalers, and pharmacies—will be allowed to import drugs from Canada. But once importation is legal, American consumers are likely to go online to try to find cheap Canadian drugs if they can’t get them through the official channels.
That’s a problem. Counterfeiters have developed effective techniques for hiding their true identity online and posing as Canadian pharmacies. A 2005 investigation from the FDA found that more than four in five drugs from online pharmacies claiming to be Canadian were actually from some other country. Dr. Andrew von Eschenbach, the FDA commissioner at the time, lamented that “there are Internet sites that claim to be ‘Canadian’ that, in fact, are peddling drugs of dubious origin, safety, and efficacy.”
Paint thinner, antifreeze, arsenic, mercury, fentanyl—these are some of the ingredients that have been found in counterfeits seized by American authorities. Other fakes have been found to contain little to no active ingredient.
Secretary Azar has openly admitted that “When one goes online and buys drugs that are supposedly from a Canadian drug store, you are taking your lives into your own hands,” Secretary Azar said on a press call last month before the release of the administration’s importation plan.
Legislation passed in 2003 empowered the HHS secretary to allow foreign drug importation if, among other things, he or she could formally certify that imports pose no risks to patients. Every single one of Secretary Azar’s predecessors has declined to do so.
There is no way to ensure that foreign drugs are safe. Even limited importation schemes pose an enormous public health risk—for next to no benefit.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her next book — False Premise, False Promise: The Disastrous Reality of Medicare for All — will be published by Encounter in January 2020.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.