FDA to allow Florida to import prescription drugs from Canada

“The FDA is committed to working with states and Indian tribes that seek to develop successful section 804 importation proposals,” Robert M. Califf, FDA’s commissioner, said in a statement. “These proposals must demonstrate the programs would result in significant cost savings to consumers without adding risk of exposure to unsafe or ineffective drugs.”

Florida said it initially would import prescription drugs that treat HIV, mental illness and prostate cancer, adding they would be available to patients at state-run facilities and ultimately Medicaid members. Before Florida can import the drugs, it must secure FDA approval regarding the specific drugs it seeks. Florida will be responsible for ensuring the integrity of the supply chain, reporting when patients have bad reactions to drugs and complying with recalls.

The pharmaceutical industry in the United States, which has pushed back on drug imports from Canada, is already signaling it intends to fight the FDA’s decision.

“We are deeply concerned with the FDA’s reckless decision to approve Florida’s state importation plan,” Stephen J. Ubl, chief executive of the Pharmaceutical Research and Manufacturers of America, said in a statement. “Ensuring patients have access to needed medicines is critical, but the importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health,” he said, adding that the industry’s powerful lobbying group is “considering all options for preventing this policy.”

But whether Florida manages to actually import prescription drugs at a significant volume remains uncertain. Canada, fearing drug shortages if the United States began importing, has placed restrictions on exporting drugs.

Scott Gottlieb, a former FDA commissioner, said he would be “surprised if any drugs can actually be brought into the U.S. under this scheme.” Canada has restricted drug wholesalers from shipping to the United States, he said, while the FDA won’t allow drugs to be imported that come “from outside the legitimate drug supply chain.”

“It will probably be impossible to reconcile those two conditions,” Gottlieb said.

The FDA said it is required to protect public health, including “ensuring a secure supply chain and preventing the introduction of potentially counterfeit, stolen, or unsafe products.”

“After years of federal bureaucrats dragging their feet, Florida will now be able to import low-cost, life-saving prescription drugs,” Gov. Ron DeSantis (R) said in a statement.

The New York Times first reported the FDA’s decision.

The FDA’s move comes at a time of intense focus by the Biden administration to tackle the high price of prescription drugs, and as major players in the pharmaceutical industry are also shifting their strategies in an effort to make drugs more affordable and accessible.

Eli Lilly said Thursday it would provide its popular weight-loss and diabetes drugs directly to patients through a telehealth service, an uncommon move for a drugmaker, in a bid to make it easier for patients to access its medicines. CVS said last month it plans to revamp drug pricing at its vast network of pharmacies starting in 2025, a shift that industry analysts said could have far-reaching effects on what consumers pay for prescriptions at the counter. Price cuts by Novo Nordisk and Sanofi for their insulin took effect this month, joining Lilly, which slashed its insulin prices last year.

The Biden administration, too, has launched various efforts to tame the high cost of prescription drugs, from studying new models to lower costs for Medicare and Medicaid beneficiaries, to the Federal Trade Commission adopting a more aggressive posture on pharmaceutical mergers. The administration’s biggest such push is the Inflation Reduction Act (IRA), which will set a maximum price for how much drugmakers are reimbursed for certain drugs through Medicare.

Many purchasers of prescription drugs, like hospitals and pharmacy-benefit managers, expect the cost of brand-name drugs to rise over the next three years, analysts at TD Cowen said in a research note Friday, citing the results of a survey that the investment bank has conducted for 29 years. The survey found that the IRA is expected to have only a modest effect on pricing in the near-term.

Canada has long been considered a source of discount pharmaceuticals. A 2021 report by the Rand Corporation found that Canadian prices were just 46 percent of those in the United States.

Andrew Mulcahy, a senior economist at Rand, said it is because the Canadian government regulates prices to be lower. The United States is effectively outsourcing this process, he said, adding, “Couldn’t we think of a way to do that domestically, rather than rely on the hard work of researchers and regulators in other countries?”

It is illegal in most cases for individual Americans to buy drugs from abroad, according to the FDA, which says that drugs from other countries haven’t been approved for use and sale in the United States. There are exceptions for over-the-counter drugs purchased abroad with no known serious health risks, or if a foreign drug treats a serious condition for which there is no effective therapy available domestically.

Proposals in the United States to import prescription drugs from its northern neighbor have long drawn resistance in Canada, where industry groups, pharmacists, doctors and lawmakers have warned they could strain the drug supply for the country’s 40 million residents and lead to drug shortages.

In 2019, the Canadian Medical Association and several other groups representing patients and health-care professionals expressed concern to the country’s health minister about a Trump administration plan to allow state governments, pharmacies and drug manufacturers to submit proposals for importing prescription drugs from Canada for federal approval.

“The Canadian medicine supply is not sufficient to support both Canadian and U.S. consumers,” the groups wrote in the letter. “The supply simply does not and will not exist within Canada to meet such demands.”

Canada’s health minister issued an order in 2020 barring companies from exporting prescription drugs if they have “reasonable grounds to believe the distribution would cause or exacerbate a drug shortage” in Canada. Health Canada, the agency overseeing health policy in that country, said the Canadian government is taking “all necessary action to safeguard the drug supply,” and that “bulk importation will not provide an effective solution to the problem of high drug prices in the U.S.”

Florida formally applied with the FDA to import drugs from Canada in November 2020, according to a lawsuit it later filed against the agency seeking a court order requiring the FDA to rule on its proposal. If the initial import program is successful, Florida said in its suit, the state’s legislature “could expand it to allow for private importation and sale of prescription drugs from Canada.”

The importation program could save Florida taxpayers up to $150 million, the state said in its lawsuit, which accuses the FDA of delaying action on its proposal. In a legal filing, the agency acknowledged that it had sought additional information but denied it had “unreasonably delayed action.”

Eight states — Colorado, Florida, Maine, New Hampshire, New Mexico, North Dakota, Vermont and Wisconsin — have laws allowing them to import drugs, according to the National Conference of State Legislatures.