Can Florida’s plan to import drugs from Canada lower medication costs?

Amna Nawaz:

After years of pressure from lawmakers and consumer advocates, the Food and Drug Administration today gave the go-ahead to allow a state to import drugs from Canada for the first time.

Lisa Desjardins looks at what it could mean and whether it will deliver the savings people want.

Lisa Desjardins:

Amna, Florida plans to import drugs to treat diabetes, HIV and hepatitis C, among others.

That would lower state spending for things like Medicaid and prisoner health care. Florida officials believe it can save them as much as $150 million a year. State proposals to import drugs finally gained traction in 2020, after President Trump pushed to make it easier for states to do so.

The following year, President Biden issued an executive order directing federal officials to move forward.

To help assess what this all could mean, I'm joined by Stacie Dusetzina, who studies all of this at the Vanderbilt University School of Medicine.

Stacie, this decision, as we said, has taken 20 years to get to this point. But how significant is it?

Stacie Dusetzina, Vanderbilt University:

So I think this has to be viewed in light of some substantial challenges, but it is a big step forward for people who have been interested in doing drug importation in the United States, for states who are thinking about this policy.

You could think of it as maybe a door with multiple locks, and this is unlocking one of those first big locks with the FDA suggesting that there is a path forward for importation of drugs for Florida.

Lisa Desjardins:

You mentioned all these locks. I think we're going to get to those.

One of those I wonder about is who gets — who saves money here. Florida says it will save them, but will this mean cost savings for patients in Florida?

Stacie Dusetzina:

Not directly.

So one of the things that I think is important here is the scope of the importation plan, and that really focuses squarely on people on Medicaid, in the state prison systems, for example. These are individuals who usually don't have to pay as much out of pocket when they're filling their prescriptions, so it won't exactly provide direct financial relief to people filling their drugs.

It could potentially have savings for the state and for taxpayers, but it really depends on the scope of how many drugs we're talking about and how much savings we really do see once you put in place all of the protections that are required to get this program off the ground, which could be pretty substantial.

Lisa Desjardins:

As you're saying, the details matter here, and it seems simple at first. Let's try and import drugs that are less expensive from Canada.

But how about Canada? What does Canada think of this? Will they go along?

Stacie Dusetzina:

They have historically not been in favor of this, and have actually tried to move forward legislation to prevent some sharing of drugs or allowing for importation of drugs to the United States through Canada.

So I think this always is my first question when historically we have seen this come up a couple of times over the years, even with the Trump administration, as you mentioned at the outset, is, what does Canada think of the plan to import drugs from Canada? And often that's a nonstarter.

So this would be another one of those locks on the door that I don't think has been solved and really dampens my enthusiasm for thinking that this would be a way for the U.S. to save money, for states to save money any time in the near future.

Lisa Desjardins:

Your enthusiasm may be dampened, but there are other states that are more enthusiastic. If you look at the map, right now, we know of eight states at least that are considering or have made it legal to try and engage in this sort of program, and I'm sure many others are considering it.

What you're saying here is that this doesn't seem like this will affect right now prices at the pharmacy for most people. But could a snowball effect do that if many more states are able to somehow bring in drugs from Canada?

Stacie Dusetzina:

I just think it's highly unlikely that they will be able to bring in the drugs through Canada.

And maybe one of the things that would be important here is that drug manufacturers are really opposed to this type of importation plan, because the U.S. pays more than Canada for those same products from those same companies. So manufacturers may limit the supply of drugs they sell to Canada, where Canada would then have to take from their own population's supply if they were going to allow for importing — us to import drugs from them.

So it makes me really skeptical, given the opposition from manufacturers and from Canada, that these plans would move forward. There may be many opportunities for states to look into this, and I can understand the reason that this is so popular is that the public really does view importing drugs — it seems very clear-cut that you should be able to get drugs from other countries, because those prices are lower and they're the same drugs sold by the same companies.

So, from a political standpoint, it's a very popular idea. It's just very difficult to operationalize.

Lisa Desjardins:

At the same time, something else is happening. The U.S. is about to be allowed to directly negotiate with drug manufacturers on a few drugs because of the Inflation Reduction Act.

How much bigger of an effect could that have, do you think, briefly?

Stacie Dusetzina:

I think it's going to be a much bigger effect.

And one reason is, is that, even though it's a smaller number of drugs, it's in the Medicare program. Medicare is a primary payer for prescription drugs. It covers older adults and those with permanent disabilities.

So that ends up being a group of Americans who use more prescription drugs. So I think that, in total, the negotiations from the Inflation Reduction Act will be a cost savings for the U.S. and will lower our spending on some very commonly used drugs, which are the target of that legislation.

Lisa Desjardins:

Stacie Dusetzina, thank you for helping us sort this out.

Stacie Dusetzina:

Thank you so much.