- The Food and Drug Administration on Thursday finalized two Trump administration policies aimed at allowing importation of lower-priced drugs sold in other countries, part of the White House's attempt to deliver on its promises to curb healthcare costs.
- Under the one policy, states or authorized pharmaceutical suppliers could bring in drugs from Canada, and under the other, manufacturers could bring in medicines from a number of countries and sell them under a separate drug code. Medicare beneficiaries would also get $200 drug discount cards.
- The importation policy relies on the participation of Canadian suppliers and pharmaceutical companies, which is not guaranteed or even likely. Cowen analyst Rick Weissenstein said he believes the plan "will have little effect on drug prices" because Canada's government has said it won't allow pharmacies to participate and because drugmakers will control inventory to prevent importation.
Heading into the presidential election in November, President Donald Trump has many plans, but few achievements, to show for years of promising to lower drug prices.
Several initiatives, such as a plan to force pharma manufacturers to disclose their prices in advertisements and to ban rebates to pharmacy benefit managers in Medicare, were blocked or haven't come into force. Another plan to tie Medicare drug prices to what foreign countries pay likely won't be in effect before November either.
With the election just over a month away, the administration has now turned to importing lower-price drugs from overseas, and use savings from that plan to offer some $6.6 billion in discount cards to Medicare recipients. This is based an old idea, however: The U.S. Department of Health and Human Services has had the power to authorize such an action since 2000 if it cuts costs and if the drugs imported are safe and effective. HHS has never done so.
Under the final rule issued Thursday, states, tribes and authorized pharmacies and wholesalers would be able to arrange with Canada-based sellers to import drugs licensed for sale there. But the rule has an important limitation: it excludes high-cost biologic drugs, such as widely used anti-inflammatory drugs like AbbVie's Humira.
In addition, it's unclear whether the discount cards will materialize. HHS said it is unable to assess how much money the importation initiative would save until plans from importers have been submitted.
HHS also released guidance to the pharmaceutical industry on how they can sell drugs, including biologics, in the U.S. that had been manufactured and intended to be sold overseas. The process involves obtaining a separate drug code and certifying it complies with all U.S. rules.
HHS Secretary Alex Azar has stated in the past that this pathway could allow manufacturers to set a lower list price for the imported product.
Pharma manufacturers have argued that the steep rebates often demanded by pharmacy benefit manager contracts have forced them to increase their list prices to earn a profit, and HHS reasons that having a separate code might help them sell the same product without the same rebate stipulations.
But, with Trump's plans and the election's outcome in doubt, drugmakers may not choose to take the administration up on its proposal.