Ned Pagliarulo Published Dec. 18, 2019
Dive Brief:
·
The Trump administration on Wednesday took a first step toward
allowing the importation of drugs from foreign countries like Canada, unveiling
two proposals that it hopes will help achieve its goal of lowering
pharmaceutical prices in the U.S.
·
One part of the administration's plan, issued by the Food and
Drug Administration as a proposed rule, would
create a pathway for states to import drugs from Canada through programs
authorized by the agency. The second part, contained in a draft guidance, is
designed to help drugmakers reroute medicines intended for foreign markets to
the U.S., potentially at a lower price.
·
Drug importation as policy has a long history, but was rejected
in the past over concerns of supply chain security and regulatory resources.
That it's been revived and put into motion by a Republication administration is
notable, although the cost-saving impact of either plan announced Wednesday
isn't clear.
Dive Insight:
The
administration's proposals were expected, having been largely laid out in an "action
plan" released in July. Still, the release of the draft rule
and guidance start a regulatory process for the creation of two drug
importation pathways.
"There has
been a long-standing debate about the role importation can play in a safe drug
supply chain, and there have always been questions about how effective
importation can be at lower costs," said Health and Human Services
Secretary Alex Azar on a call with reporters. "Supply chains and
markets have changed over time."
While the
administration painted its plan as a historic step toward lower drug costs,
both plans come with notable limitations and uncertain effects. The Department
of Health and Human Services declined to estimate potential savings or costs,
noting that until it sees importation proposals from states it won't have a
clear sense of those programs' scope.
States do
appear interested, with the governors of Florida, Vermont, Maine and New
Hampshire all expressing some support for the administration's efforts.
Under the draft
rule, states and other non-federal government entities could submit importation
programs to the Food and Drug Administration for review. Eligible drugs must
already be FDA-approved, authorized for sale in Canada and carry similar
labeling. But biologics, such as AbbVie's Humira, and other high-cost
injectable drugs would be excluded due to limitations in the law upon which HHS
is relying. So too would be medicines approved under Risk Evaluation and
Mitigation Strategies programs, which contain limits on how such drugs are
distributed.
Scott Gottlieb,
a former Trump administration FDA commissioner, described on Twitter the
restrictions as "stringent," noting that "while it may sharply
limit who can actually import Canadian drugs under this framework, it maintains
critical FDA safeguards to protect consumers."
Speaking on a
conference call, HHS' Azar described the program as a "proof of
concept" that Congress may want to expand to include more complex drugs
that involve cold chain storage or complicated distribution.
States must
also identify the foreign seller in Canada that will purchase products directly
from manufacturers, suggesting drugmakers would have some say in whether their
drugs could be subject to importation into the U.S.
The second
pathway would also rely on drugmakers, establishing a process by which
companies could obtain a new National Drug Code for product that had been
manufactured for and intended for sale in foreign countries. HHS' logic is that
contracts between drugmakers and pharmacy benefit managers in the U.S. can
artificially limit a company's ability to lower prices on its drugs because of
high negotiated rebates.
A new NDC code
could allow those companies to import the same product at a lower price, HHS
said, although it didn't clarify why a drugmaker may want to do that.
The Trump
administration has made drug prices a policy priority, but its efforts to date
have mostly come undone. A proposal to require drugmakers list prices in
television ads was challenged in court, while a rule centered on
drugmaker rebates was later withdrawn.
A third
proposal to link reimbursement in federal healthcare programs to prices paid
abroad remains in development.
In Congress,
meanwhile, the House of Representatives recently passed sweeping drug pricing
legislation that would go much further than many of the administration's
proposals, although the Senate is unlikely to take up the bill. President
Donald Trump has backed a competing plan negotiated by Senate Finance Committee
leaders.
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