Federal and State Importation Proposals to Lower Drug Costs

Americans spend more on prescription drugs than any other country in the world. In 2017, U.S. consumers spent about $333 billion on prescription drugs, according to the Centers for Medicare & Medicaid Services, and prescription drug costs are expected to continue to trend upward over the next decade.

The idea of importing drugs from Canada to help lower prescription drug costs in the United States has steadily gained traction over the years. Approximately 80% of Americans are in favor of buying prescription drugs imported from Canada, according to a 2019 Kaiser Family Foundation survey.

However, under current law, the importation of foreign-made drugs is generally prohibited by the Food and Drug Administration (FDA). The prohibition applies to any unapproved new drugs and foreign-made versions of U.S. drugs that have been approved by the FDA.

Since 2003, there have been consistent legislative efforts to provide a legal pathway to allow the import  of drugs from Canada and other countries. In the 116th Congress, lawmakers have introduced bills in both chambers to address the issue, including the Affordable and Safe Prescription Drug Importation Act (H.R. 447, S. 97), the Short on Competition Act (S. 844), and the Safe and Affordable Drugs from Canada Act (H.R. 478, S. 61).

Lowering drug costs through importation also has been a top priority for the Trump Administration. In July 2019, the Department of Health and Human Services (HHS) released its Safe Importation Action Plan, outlining two regulatory pathways to allow for the importation of certain drugs from Canada. Under the plan, the HHS and FDA would work together to develop regulations and guidance to faciliate and manage the safe importation of drugs. The federal government is expected to rely on states to take the lead in developing pilot importation programs. The drug importation debate has pitted consumer advocacy groups against pharmaceutical companies. Consumer advocates have argued that importation would help lower out-of-pocket costs for Americans, while opponents have expressed serious concerns about the safety of imported drugs.

Advocates of importation have supporters in Congress, namely Sens. Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.). In introducing the Safe and Affordable Drugs from Canada Act (S. 61), which would permit the importation of drugs from approved pharmacies in Canada, both senators recognized the need for Congress to take action to help reduce out-of-pocket costs for Americans.

AARP has cheered on both federal and state efforts to permit drug importation. Upon the release of the administration’s action plan, Nancy LeaMond, AARP’s executive vice president and chief advocacy and engagement officer, said, “There is a crisis in drug prices, and the safe, legal importation of less expensive prescription drugs is one step that will help lower costs and add competitive pressure on drugmakers to lower the prices they set in the U.S.”

In addition to the recent congressional and administrative action, several state legislatures also have passed laws to develop their respective importation programs. These states include Colorado, Florida, Maine, and Vermont.

Despite public support for importing drugs from Canada, major pharmaceutical companies and several former FDA commissioners have opposed such plans, citing feasibility and safety concerns.

“Importing medicines from countries that do not have our same strong standards could taint our medicine supply. Without proper FDA oversight and enforcement of laws designed to protect patient safety … there is increased potential for counterfeit or adulterated products to infiltrate the U.S. pharmaceutical supply chain, with life-threatening consequences,” said Pharmaceutical Research and Manufacturers of America, an association of U.S. biopharmaceutical research companies.

In a March 2017 letter, four former FDA commissioners warned about the safety of imported drugs and questioned the FDA’s ability to manage a large-scale importation program given the agency’s limited resources. In the letter, the commissioners also advised lawmakers and policymakers to “deal directly with the issues driving the cost of medicines and not to place false hope in measures that will place patients who need treatment at risk and jeopardize public health.”

The administration’s action plan will be open for public comment once formal proposals are issued in the coming months.

For more background, see the November 2003 issue of Congressional Digest on “Importing Prescription Drugs.”