The Trump administration plans to set up a system that would allow Americans to buy prescription drugs from Canada.
Health and Human Services Secretary Alex Azar announced in an interview on CNBC Tuesday that the department is working on a plan that would allow Americans to import prescription medications from up north.
Azar did not expand on the plan but said that HHS is open to the idea after President Trump called for allowing Americans to import drugs from abroad.
The plan would be run with “oversight from the Food and Drug Administration,” The Associated Press reported. “States, drug wholesalers and pharmacists would act as intermediaries for consumers.”
"Today's announcement outlines the pathways the Administration intends to explore to allow safe importation of certain prescription drugs to lower prices and reduce out of pocket costs for American patients," Azar said in a statement, according to NPR. "This is the next important step in the Administration's work to end foreign freeloading and put American patients first."
HHS proposes two ‘pathways’ to import drugs:
Under the plan, HHS and the Food and Drug Administration would set up a pilot program to allow states and wholesalers to detail “how they would import certain drugs from Canada that are versions of FDA-approved drugs that are manufactured consistent with the FDA approval,” NPR reported.
The FDA would also create safety guidelines for drug manufacturers who want to import drugs to the US market.
“Manufacturers would use a new National Drug Code that could allow them to price drugs lower than what is required by their current distribution contracts,” NPR reported.
"This pathway could be particularly helpful to patients with significantly high cost prescription drugs," HHS said in a statement. "This would potentially include medications like insulin used to treat diabetes, as well as those used to treat rheumatoid arthritis, cardiovascular disorders, and cancer."
Azar previously said the plan was just a “gimmick”:
Rachel Sachs, a law professor at Washington University in St. Louis, told NPR that drugs tend to be cheaper in Canada because their system allows meaningful negotiation over drug prices.
"In the U.S., we've constructed a system where pharmaceutical companies are able to charge far higher prices because there's no mechanism to push back," Sachs said. "There's no way to say, 'We're not going to pay for that drug unless we get it at a better price.' "
But Azar previously said last year that importing drugs from Canada would not be helpful.
"Many people may be familiar with proposals to give our seniors access to cheaper drugs by importing drugs from other countries, such as Canada,” he said in May 2018. “This, too, is a gimmick. It has been assessed multiple times by the Congressional Budget Office, and CBO has said it would have no meaningful effect."
In 2004, the CBO reported that "reduction in drug spending from importation would be small," considering the size of Canada’s much smaller drug market, but added that "proposals to permit parallel trade with a large group of countries would offer greater potential savings."
It’s also unclear if Canada is on board with the plan.
"The Canadian medicine supply is not sufficient to support both Canadian and U.S. consumers," a coalition of health, hospital, and pharmaceutical groups wrote in a letter to the Canadian health minister, according to NPR.
And while drugs are cheaper in Canada, the country has the third-highest drug prices in the world, according to the CBC.