On January 5th, 2024, for the first time, the Food and Drug Administration (FDA) approved a state’s mass importation of pharmaceuticals from Canada, allowing Florida to import millions of dollars worth of medications at lower prices than they are sold for in the United States. Responding to this news, Florida Governor Ron DeSantis stated, “After years of federal bureaucrats dragging their feet, Florida will now be able to import low-cost, life-saving prescription drugs.” Florida estimates that this importation program could save the state up to $150 million in its inaugural year.
Public Views on Importation
Many Americans worry about the high costs of prescription drugs, and most want action to lower drug costs. The possibility of importing drugs from Canada, where they are often sold at a significantly cheaper price, has generally received favorable views from the American public. According to a 2019 KFF poll, 78% of people surveyed favored allowing Americans to buy drugs from Canada. Despite the public appetite for this solution, implementation is complicated, and there are doubts about whether importation is a viable method for lowering drug costs.
Hesitancy from within Government Agencies
Importation of drugs from Canada has long had congressional approval, but the Bush, Obama, and Clinton administrations did not pursue this as a path to lower drug costs. In 2003, Congress enacted the Medicare Modernization Act (MMA), which allowed the importation of prescription drugs from Canada if the Health and Human Services (HHS) secretary could demonstrate the program “poses no additional risk to the public’s health and safety,”and “results in a significant reduction in the cost of covered products to the American consumer.” Despite this congressional approval, the HHS secretaries under Clinton, Bush, and Obama did not pursue an importation plan, citing safety concerns and doubts that importation would significantly reduce costs. This policy shifted under the Trump Administration in 2020 when HHS issued a final rule and final FDA guidance authorizing states to implement plans to import drugs directly from Canada. In 2021, the Biden administration reinforced this policy, issuing an executive order instructing the FDA to work with states on implementation plans.
Even with the executive branch urging cooperation, FDA review of state importation plans has been slow. In 2022, Florida sued the FDA for the delay in their approval plan. The FDA’s January 5th decision to finally approve Florida’s plan coincided with the deadline a federal judge had set for the FDA to act on the application. While the FDA has authorized the importation plan for two years, Florida will have to continue working with the FDA for the next steps in the process before distribution can take place. A drug cannot be imported by Florida until the state sends “a pre-import request to the FDA for each drug” and the FDA approves the request. Florida is also obligated to comply with FDA policies to ensure drugs are “potent and not counterfeit” and have FDA-approved labels. Once distribution starts, the FDA will monitor the program to ensure that Florida’s program complies with mandated safety rules, properly tracks adverse side effects, and brings significant cost savings to the state. Bringing Florida’s importation plan to action requires FDA cooperation, which so far has come hesitantly.
Additional Hurdles to Implementation
Resistance from the Canadian government may also make it difficult for Florida’s importation plan to come to fruition. With a population roughly one-tenth of the size of the United States, Canada has a much smaller pharmaceutical market that is not built to handle mass exports. The Canadian government has expressed opposition to American plans to import drugs from Canada and has already taken action “to block the export of prescription drugs that are in short supply.” In 2021, Canada issued a regulation that prohibits “drugs intended for Canadian consumers” from being sold abroad if “those exports could cause or worsen a drug shortage.” Health Canada has stated the Canadian government is “taking all necessary action to safeguard the drug supply” and that bulk importation from Canada is not a feasible solution to the U.S.’s high drug prices. Active opposition from the Canadian government will make large-scale importation by state governments difficult.
Pharmaceutical manufacturers are likely to be another obstacle to Florida’s importation plan. Several drug manufacturers “have agreements with Canadian wholesalers not to export their medicines,” and it is not in their financial interests to abandon these policies and allow state governments to capitalize on the prices of pharmaceuticals negotiated by the Canadian government. Pharmaceutical Research and Manufacturers of America (PhRMA), the major lobbying organization of the pharmaceutical industry, has previously sued to block importation efforts and is expected to sue to block Florida’s newly approved plan. PhRMA claims importation of drugs from Canada “poses a serious danger to public health.” Further, drug companies have indicated they won’t manufacture additional drugs for the Canadian market to balance out exports. According to former FDA Commissioner Scott Gottlieb, this paired with Canada’s regulations preventing exports that could cause shortages makes it “impossible for this policy to be implemented.” It is likely that drug companies will continue to try to block any importation efforts.
In summary, the FDA’s approval of Florida’s importation plan marks a step towards making this popular policy a reality, but many possibly insurmountable obstacles still remain.