The difference in drug costs between Canada and the U.S. can be staggering, which is why some states see importing cheaper Canadian drugs as a way to pressure pharmaceutical companies in the U.S. to lower prices.Elise Amendola/The Associated Press
Weeks after U.S. regulators allowed Florida to import drugs from Canada, other states are rushing to secure similar permission and expand the number of people who can purchase cheaper prescription medicine.
In February, Colorado intends to resubmit its application to grant pharmacists and wholesalers the ability to buy from Canada, incorporating what it has learned from Florida, which in early January was granted a two-year authorization by the U.S. Food and Drug Administration.
Colorado has sought a similar approval since 2019.
“The FDA saying they’re going to give approval to Florida tells me the gate has opened,” said Senator Sonya Jaquez Lewis, a Colorado pharmacist who has been among her state’s most outspoken advocates for bringing in medicines from abroad.
Colorado is one of a half-dozen states that see securing imports from Canada as a key step toward lowering the price of drugs in the U.S. Florida wants to bring in Canadian pharmaceuticals for government-backed programs, and estimates savings of US$180-million a year. Colorado, which has sought to expand imports to non-government users as well, has estimated annual savings of US$53-million to US$88-million.
“If this works in several individual states, I would say this could be the momentum for Congress to put more pressure on pharmaceutical manufacturers to make their drugs more affordable,” Ms. Jaquez Lewis told The Globe and Mail in an interview.
The difference in drug costs between Canada and the U.S. can be staggering, owing in part to the considerable dissimilarities in health care systems between the countries. In Canada, the federal government regulates pharmaceutical prices while the provinces negotiate together for discounts. In the U.S., major government programs like Medicare – the federal health insurance program for people who are elderly or disabled – are legislatively barred from negotiating the price of drugs.
For states, importing drugs from Canada offers the possibility of circumventing those restrictions – although that prospect has raised concern that it could create shortages for Canadians.
But the new U.S. urgency to sidestep high local prices has long been anticipated by drugmakers, some of which have already created measures to ensure the products they ship to Canada do not find their way into the U.S. Two major pharmaceutical companies confirmed to The Globe and Mail that they have legal measures in place to prevent re-export of drugs.
“Contractually, resale of Novartis products outside of Canada [is] prohibited,” Claudja Joseph, a spokesperson for Novartis Pharmaceuticals Canada Inc., said in a statement. Rita Moutinho, a Canadian spokesperson for GSK plc and Viiv Healthcare, also said “our general terms and conditions of supply include anti-export clauses.”
Ottawa, meanwhile, said it sees no need to legislate in response to the U.S. attempts to import drugs. “Canada has the tools we need to make sure that Canadians continue to have access to the medications they need when they need them,” said Christopher Aoun, a spokesman for Health Minister Mark Holland.
Those who advocate importing pharmaceuticals into the U.S. argue that their efforts amount to more than posturing. “It’s not symbolic,” said Ms. Jaquez Lewis. Colorado has assembled a list of 112 expensive, high-volume drugs for conditions like cancer, HIV, multiple sclerosis and others. Bringing those drugs from Canada “could be a quick, part-time solution,” she said.
Colorado’s own documentation suggests there is unlikely to be anything speedy about the process. The U.S. first legalized the possibility of drug imports from Canada more than 20 years ago. Individuals from the state have been allowed to bring in medications from Canada since 2005, although the paperwork requirements are onerous.
Securing the regulatory authority to actually bring in large volumes of pharmaceuticals has been far more difficult. Colorado’s department of health care policy and financing has worked to build a broader import program since 2019.
Not only has the FDA been slow to grant approval for the plan, but the Canadian export restrictions mandated by pharmaceutical companies mean “Colorado is unable to secure drug supply absent direct negotiation, and ultimately a contractual agreement, with manufacturers,” state officials observed in a report to the Colorado legislature late last year.
The state has shown no success in achieving such an agreement. State officials reached out to 23 drugmakers for discussions. Four said they had no interest in negotiating. Nine declined to meet. Ten didn’t even respond to the state’s requests.
“Without regulatory changes, success is dependent on the willingness of brand drug manufacturers to be open to partnership with Colorado,” the report concluded.
Drug manufacturers say they are working to ensure products aren’t sold in places they aren’t intended. Innovative Medicines Canada, in a statement from interim president David Renwick, said any anti-export contract stipulations would “decrease the risk of product diversion” and ensure “compliance with all applicable legal and regulatory obligations. Health Canada regulations prohibit the export of drugs that are intended for the Canadian market if the export would cause or exacerbate a drug shortage.”
Former Liberal Health Minister Ujjal Dosanjh is among those who don’t find that reassuring. “We can’t be the drug store for the United States of America,” he said, warning that action is needed before Canada is thrust into a crisis. Bulk exports of pharmaceuticals “should be illegal,” he said, cautioning against trust in politicians in the U.S. Rather than regulate their own drug prices, “they are trying to pass off that responsibility to Canada – and then wreck the Canadian system,” he said.
Ms. Jaquez Lewis, the Colorado senator, acknowledged that Canada cannot provide the pharmaceutical solution for a country with a far larger population. But, she said, legislators want to address an issue that is among the most important for local voters.
Across the U.S., at least eight states have passed legislation to create prescription drug affordability boards, many of which have the power to set upper price limits for certain drugs. Medicaid, the public health program for low income people, has for decades been granted the best price obtained by any drug purchaser.
The sprawling Inflation Reduction Act passed in 2022 gave new powers to the Secretary of the Department of Health and Human Services to negotiate the price of some drugs used by Medicare. Drugmakers have challenged that provision in court, but the U.S. government has already begun price negotiations on 10 initial drugs.
The efforts to import drugs from Canada are set against that backdrop. For Colorado, it’s a question of adding legislative pressure.
“These efforts have shone a light on what the pharmaceutical manufacturers are doing with their contracting,” Ms. Jaquez Lewis said.