The Department of Health and Human Services on Friday announced that the Trump Administration will move forward with drug importations from other countries, promising to pass discounts onto consumers in an effort to follow through on the president's executive order on drug pricing.
HHS Chief of Staff Brian Harrison said this marks the first time in history that the federal agency has entered into the drug importation business.
WHAT'S THE IMPACT
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A final rule issued by the Food and Drug Administration allows for proposals for the importation of certain drugs from Canada and other countries on a state-by-state basis, and also allows for drug importation by pharmacists and wholesalers.
The FDA will oversee the importation of prescription medications from Canada that are labeled for use in the U.S. The drugs will undergo testing for authenticity and signs of potential degradation, and to ensure they meet specifications and standards before receiving official FDA-approved labeling.
Harrison said this has the potential to result in significant savings for consumers with no additional risks. By way of example, he said Florida could see savings of 60% or more on costly HIV drugs.
Procedures will be created for drug manufacturers to establish drug codes for products originally intended for sale in a foreign country, which Harrison said allows companies to compete through lower costs in ways that were not previously possible.
"This was done with American consumer safety at the forefront of our efforts," said Harrison. "Even as drug prices over the years have skyrocketed, no president was bold enough to take executive action."
HHS also took action on two other aspects of Trump's proposed executive orders from July. One was a proposal for programs that would allow Americans to obtain insulin at lower costs through re-importation. The insulin would have to be FDA-approved or licensed and manufactured in the U.S., at which point patients could obtain it through licensed distributors. Harrison again touted the possibility of significant consumer savings.
On top of these actions, the agency is also soliciting requests for proposals to import lower-cost drugs on an individual basis, meaning an individual could obtain an FDA-approved imported drug through newly created individual waiver importations plans, or IWIPs. Drugs would be imported through an accessible foreign source -- Canada, Sweden, European Union countries and others -- and patients would apply for a $200 waiver card, get a prescription, and then pick it up in person from a pharmacy operating under an approved plan.
This concept applies to certain FDA-approved prescription drugs, but not other medicines such as biologics and controlled substances, though Harrison said there are some exceptions.
Finally, the agency issued a proposed rule for insulin and ingestible epinefrin. Providers willl be required to provide both in 340B at 350% of the federal poverty level, for those with a higher cost sharing requirement.
"Prescription drugs can represent a significant share of Americans' out-of-pocket costs, and have a real impact on their ability to obtain better health," said Harrison. "We created smart, safe opportunities for Americans to obtain drugs. This is the kind of bold action we need."
THE LARGER TREND
The Administration has tried a number of different tactics to lower drug prices. By the end of July, Trump had signed four executive orders with that goal, including one that reinstates a previously withdrawn rebate rule – which received pushback from some stakeholders.
The order mandated that pharmacy benefit managers no longer give health plans a portion of the drug savings but give the rebates as discounts to consumers. The administration said the rule would save seniors an estimated $30 billion per year, but insurers and others said it would only increase prices for consumers. Insurers have said they use rebates to decrease premiums for all consumers.
Pursuing a "most favored nation" approach, Trump signed an executive order earlier this month aimed at lowering drug prices, which calls for Medicare to pay the same price for certain prescription drugs that other countries pay.
It effectively repeals a previous executive order that was nearly identical in concept, but that Trump held back to see if he could negotiate a better deal with drug companies. The new executive order expands the list of drugs covered to include both Medicare Parts B and D, the idea being that Medicare would not pay more for drugs than the lower prices paid by other countries.
The order called on Health and Human Services Secretary Alex Azar to "immediately take appropriate steps to implement his rulemaking plan to test a payment model pursuant to which Medicare would pay, for certain high-cost prescription drugs and biological products covered by Medicare Part B, no more than the most-favored-nation price."
According to the order, the model would test whether the most-favored-nation price policy would mitigate the poor clinical outcomes and increased expenditures associated with high drug costs. Citing the scarce financial resources of vulnerable Americans, and price-related medication avoidance, the administration said it hopes to avoid acute conditions and poor outcomes "that require drastic and expensive medical interventions."
The move resulted in pushback from the pharmaceutical industry. PhRMA president and CEO Stephen J. Ubl said that the proposed action is not a market-based solution.
"The focus of any reforms must be on lowering costs for patients, ensuring patients' access to medicines, addressing the misaligned incentives in the pharmaceutical supply chain and protecting the critical work being done to end COVID-19," said Ubl. "Unfortunately, instead of pursuing these reforms the White House has doubled down on a reckless attack on the very companies working around the clock to beat COVID-19.
"The Administration has chosen to pursue the most favored nation policy – an irresponsible and unworkable policy that will give foreign governments a say in how America provides access to treatments and cures for seniors and people struggling with devastating diseases," he said. "What's worse is that they are now expanding the policy to include medicines in both Medicare Part B and Part D, an overreach that further threatens America's innovation leadership and puts access to medicines for tens of millions of seniors at risk."