TAYLOR BUFFA—While prescription drugs provide vital relief to millions of Americans, the financial burden takes a heavy toll on their wallets. 66% of all U.S. adults use prescription drugs, leaving them faced with exorbitant prices for the medicine they rely on. The price of prescription drugs in the U.S. is almost four times higher compared to other countries, and over 80% of American adults believe that the cost of prescription drugs is unreasonable. Over the past several years, the topic of drug pricing has stood at the forefront of political discussions and debates. However, little progress has been made to combat this issue.
One strategy to lower prescription drug prices is allowing wholesalers to purchase drugs from foreign sellers, at a price lower than are available in the U.S., thereby passing these savings onto U.S. consumers. The U.S. Food and Drug Administration (FDA) first approved this approach on Friday, January 5, 2024, allowing Florida to directly import prescription drugs from Canada.
Typically, foreign-made drugs that have not been evaluated through the FDA process are considered unapproved drugs and are illegal in the U.S. However, section 804 of the Federal Food, Drug, and Cosmetic Act, allows the States and Indian Tribes to import certain prescription drugs from Canada if it can be done safely and significantly reduce costs to American consumers.
Florida’s importation plan allows the state to purchase medications from Canadian wholesalers for two years. According to state representatives, the program could save Florida taxpayers up to $150 million in its first year by providing prescription drugs to residents at a lower cost. Florida plans to make Canadian medications that treat HIV, prostate cancer, diabetes, hepatitis C, and mental illness, available to patients in state-run facilities and, ultimately, to Medicaid members.
Before any drugs are imported, Florida’s importation program must comply with the FDA’s safeguards designed to mitigate potential safety concerns. These safeguards include sending the FDA details on the drugs, verifying the drugs for authenticity and compliance with FDA-approved specifications and standards, and relabeling drugs in accordance with FDA requirements. Florida also must regularly submit reports to the agency, detailing cost savings and potential safety and quality issues.
Despite the potential reduction in drug prices for American consumers, the FDA’s decision has already drawn fierce opposition from the pharmaceutical industry. Pharmaceutical companies believe that the plan will not lead to lower costs for consumers and may cause vulnerabilities in the drug supply. Critics argue, that in the absence of the FDA-approval process, the importation program increases the risk of counterfeit, adulterated, and subpar products entering the U.S. In the past, pharmaceutical trade groups have sued over state importation efforts and immediately signaled their intention to fight the recent FDA decision.
Opponents have also expressed skepticism about the potential cost-saving impact of drug importation. Some expensive drugs, like biologics and specialty drugs, do not qualify under FDA’s importation policy. Further, companies that manufacture the imported drugs will not want to sacrifice their profits, and thus, will likely prevent wholesalers from exporting medications at lower costs.
In addition to opposition within the U.S., Florida’s importation program also encounters obstacles in Canada. One concern stems from the potential for drug shortages in Canada. Manufacturers allocate drug sales to a country based on the amount of people that will take that drug. Therefore, manufacturers are unlikely to increase capacity or allocate more drugs to Canada if those drugs will ultimately be redistributed to the U.S. Additionally, Canada already has restricted the exportation of drugs in low supply and voiced its strong disapproval of the FDA’s decision.
Overall, FDA approval of Florida’s importation program underscores the ongoing effort to tackle the complex issue of drug pricing in the U.S. Although Florida’s program is a major step toward resolving the issue, it remains uncertain whether importing drugs from Canada will ultimately reduce drug costs for Americans – and their wallets may still be yearning for more relief.
