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Drug Importation Bill - Drug Prices World

Yesterday, the Florida House Legislature voted 93-22 passing HB 19. The bill creates programs and processes for importing prescription drugs from Canada, as well as from other countries. HB 19 actually calls for the creation of two programs, which I have summarized below. For a deep dive, you should read the Staff Analysis from the Florida House of Representatives.

Canadian Prescription Drug Importation Program (CPDIP)

If HB 19 becomes law, the Florida Agency for Health Care Administration (AHCA) will create processes that meet the safety protocols called for in the bill, which include inspections and testing of drugs, to allow registered wholesale pharmacies to import from Florida-registered Canadian wholesalers. In this program, lower drug prices will save taxpayers money for government funded-entities, such as county health departments, free clinics, and the Department of Corrections.

International Prescription Drug Importation Program

This program creates rules of the road for eligible entities—essentially licensed pharmacies and wholesalers—to import prescription drugs not only from Canada, but also from other countries, ones that the U.S. already recognizes as adhering to current good manufacturing practices for pharmaceutical products. Such countries would most likely include the UK and other countries in the European Union, such as France and Germany.

The bill calls for the programs to be reviewed and accepted by the Secretary of Health and Human Services, as pilot programs for prescription drug importation, as permitted under Federal law (Section 804 of the Food, Drug and Cosmetic Act; 21 USC 84). If the programs are rejected, then presumably Florida will not proceed with importation.

Discussion

The Florida state drug importation bill is informed by the work of the National Academy on State Health Policy, but there are a few important differences. The NASHP model state drug importation legislation proposes one singular program for wholesale drug importation from Canada that can be available to public and private payors. HB 19’s first program, the CPDIP, would only be available to public payors. More groundbreaking is that, under the IPDIP, HB 19 opens the door to importation from countries other than Canada. Federal statute may not be able to accommodate this program since current law states that, with approval from the Secretary, importation from Canada is legal – but not other countries. I’m not sure how Florida intends to get around this.

I have seen some analysis of the costs to implement the program but not the savings. Florida can look to Vermont’s research on this front. Vermont has already passed a prescription drug wholesale importation bill and is far along in research and preparations to submit its program to the HHS Secretary this June. In Vermont’s report from December 2018, they identified 17 potential drugs to look at and determine savings. Very simply, Vermont found that for drugs dispensed in the Medicaid program, there actually would not be savings. The reason is that Medicaid has built in policy tools to keep costs lower, closer to what you might find in Canada. In contrast, Vermont found that savings would be found for people in commercial insurance, ranging from $1-5 million. Now that’s a huge range, but even if it’s $1 million for 17 drugs, it’s substantial savings. As I understand it, that savings accounts for the development and operation of the program. Vermont will have better savings data when it finishes developing the program.

Politically, it’s interesting that the drug importation bill is being promoted by Republican Governor Ron DeSantis and Republican lawmakers. This is also the case in Utah, in which Utah House Representative Norm Thurston, also a Republican, is leading the importation charge. At the Federal level, it’s usually Democrats who support importation legislation, but with a good minority of Republicans showing support as well.

Governor DeSantis said that President Trump told him to go for it and he’s supportive. If this bill becomes law, pending a vote in the Florida Senate, Secretary of Health and Human Services Alex Azar will not be able to easily dismiss Florida’s request to begin the importation program.

Finally, Vermont’s pioneering state importation bill was a great step forward, but it’s a small state. In contrast, Florida is the third most populous state in the country. A pilot program in such a large state helps prove that regulated imports of lower-cost medicines is doable at the federal level.

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