Importation vs. Negotiation: How Differing Healthcare Policy Stances Affect the “Bipartisan” Issue of High Drug Prices

KATIE BLACK—Prescription drug prices in the United States are untenably high. So much so, in fact, that constituent concerns over skyrocketing drug costs have led to bipartisan support for the current solution: importing prescription drugs from Canada.

Attempted legislation regarding drug importation is not new. In 2019, Senators Grassley and Klobuchar co-sponsored a bipartisan bill called the Safe and Affordable Drugs from Canada Act of 2019. In addition to Senator Klobuchar’s support, other former Democratic front-runners in the presidential race, such as Senators Sanders and Warren, signaled support for drug importation. Ahead of the 2020 presidential election, the Trump Administration is looking to fast-track efforts to fulfill longtime promises to drive down drug prices—bringing in Health and Human Services alongside allies like Governor Ron DeSantis to lobby lawmakers and voters alike in favor of a solid importation plan. However, this bipartisanship seemingly ends here, as polarizing differences in international trade and healthcare policies perhaps serve as a more accurate gauge of each party’s overall drug policy than support for importation alone implies.

In the battle against prescription drug price hikes, some studies suggest that it is year-to-year manufacturer-driven price increases that are to blame for skyrocketing costs in everyday drugs like insulin. Other assessments, however, place the blame squarely on innovation-driven increases, in that drug manufacturers command higher prices to offset the innovation costs of new and more expensive therapies. Whatever the most prominent driver of these costs, it is clear from constituent outrage and this issue’s importance in the 2020 election that something need be done.

Despite the Trump Administration’s push for importation, and the support from Congressional leaders like Senator Chuck Grassley on legislation for this purpose, the current international trade aims of the administration may, in fact, undermine their healthcare objective. Following the late Senator John McCain’s decisive blow to conservative efforts to repeal the Affordable Care Act in July of 2017, the GOP’s stance on healthcare policy has been scattershot. Some have commented that the Trump Administration’s current policy is simply opposing the Democratic plan of Medicare for All. In the absence of clear policy directives, the Administration’s trade efforts in creating the new NAFTA, the United States-Mexico-Canada Agreement (“USMCA”), shed light on their deference to drug manufacturers.

The USMCA free trade agreement markedly allows for significantly emboldened patent protections for complex pharmaceutical biologics in an effort to incentivize drug manufacturing innovation across the Americas—one source of major concern when analyzing the reason behind skyrocketing costs. When confronted with concerns about drug pricing as a result of the USMCA, co-author of the bipartisan Canadian drug importation bill Republican Senator Grassley, in fact, declined to look into altering its terms in favor of wholesale adoption of the agreement.

Prior to the winnowing of the primary field, 2020 Democratic candidates, on the other hand, largely stood behind variations of Medicare for All or a public option alternative, and thereby presented a clearer healthcare policy from which to analyze possible effects on drug pricing. Importantly, Medicare for All would, as its name suggests, widely extend government-based healthcare to those who want it. Although there are efforts to allow the government to negotiate drug prices with manufacturers for the purposes of Medicare, these provisions have been included directly into the overarching Medicare for All plan. In fact, giving the government the ability to negotiate drug prices for Medicare is a unanimously-accepted policy for all front-runner Democratic candidates that participated in the 2020 primary race.

Further, it follows that if Medicare for All is adopted nationwide and the government is granted the ability to negotiate for lower drug pricing, then that policy may be more effective in targeting the source of drug price hikes rather than the current stopgap of drug importation from Canada. Also, if effective, it would relieve pressure on one of the United States’ closest trade allies and assuage intense concerns over the importation policy’s effect on Canada’s already-strained healthcare system.

The importance of both healthcare and international trade policy on the everyday lives of Americans who need prescription medication cannot be overstated. Though not necessarily an obvious interplay, voters should stay attuned to any longstanding party policies that potentially conflict with election-year promises. For drug pricing, in particular, stopgap importation solutions will only be temporarily effective if not supported by long-term efforts to reduce prices and maintain positive trade relations with our closest neighbors. Perhaps COVID-19’s unmasking of many healthcare supply chain deficiencies will be the push needed to adopt stronger stances on prescription medication self-sufficiency. Although such interrelated healthcare and trade policy changes may only be played out in due course, many are already looking at the COVID crisis as critical proof that the United States needs a plan like Medicare for All now more than ever before.