It has been reported that the Department of Health and Human Services (HHS) has submitted to the Office of Management and Budget (OMB) the final rule that would allow states to import drugs from Canada.  Currently, six states have passed laws that would allow them to get federal approval to buy these drugs.

In December 2019, the Food and Drug Administration (FDA) announced a proposed rule that it would be amending the Food, Drug, and Cosmetic Act regulations to allow importation of drugs from Canada.  If the proposed rule is finalized as is, it would allow states or other non-federal governmental entities, a pharmacist, or a wholesaler to import certain drugs from Canada.

FDA stated in the proposed rule that if it was finalized, the requirements would be that a state or non-federal governmental entity would have to show that their importation program would “pose no additional risk to the public's health and safety” and “explain why their program would be expected to result in a significant reduction in the cost of covered products to the American consumer.”

Citizens Against Government Waste (CAGW) submitted comments on the proposed rule on March 5, 2020, expressing strong opposition to the importation plan, noting that it would neither be safe or save much money.

For many years, FDA commissioners and HHS secretaries have stated that allowing importation would compromise the secure and safe closed drug distribution system in the United States and make it easier for unapproved drugs, which may include counterfeit or other substandard drugs, to reach American patients and would put their treatment at risk, outweighing any potential cost savings.  Even current HHS Secretary Alex Azar said in May 2018 that, “the last four FDA commissioners have said there is no effective way to ensure drugs coming from Canada really are coming from Canada, rather than being routed from, say, a counterfeit factory in China.  The United States has the safest regulatory system in the world.  The last thing we need is open borders for unsafe drugs in search of savings that cannot be safely achieved.”

There were 1,210 comments submitted to the FDA concerning this regulation.  Both FDA and HHS reviewed and took into consideration the comments and may, or may not have, incorporated them into the final regulation.  OMB’s job is to be the final arbitrator because  it oversees the implementation of the current president’s policies, including the budget, agency management, legislative clearance and coordination, presidential EOs and memoranda, and agency regulatory objectives.

It is likely the final regulation will not change too much from the proposed regulation and it will be up to the states to prove to the FDA they can import Canadian drugs safely and produce a significant savings, whatever that is.  FDA admits in its proposed rule that it is unable to estimate the cost savings from the proposed rule because it lacks information about what drugs may be eligible, the size of the individual programs in the states, and to what degree imported drugs would be less expensive than non-imported drugs available in the United States.

Aside from those obstacles, the most important impediment to importation is that officials in Canada have repeatedly said they cannot and will not ship cheaper drugs to the United States.  The country already faces drug shortages and they are not about to send their supply to the United States.

Canada has cheaper drugs is because the country uses price controls to keep costs down under a single-payer, or government-run healthcare program that is paid for with high taxes and rationing.  Canadians have long wait times for services and less access to innovative medical technologies than Americans.  Due to price controls and their socialistic healthcare system, they produce little in the way of pharmaceutical research and like most of the world, free-ride on U.S. biopharmaceutical investments.

CAGW warned in its comment to the FDA concerning drug importation that it is unlikely Canadians would cooperate in exporting large amounts of drugs to the United States.  Attempting to implement such a policy would be complicated and expensive, produce little to no savings, and unscrupulous actors would take advantage of an importation program, developing fake Canadian drug websites to entice unsuspecting citizens to purchase their “state approved” counterfeit drugs.

Unfortunately, the result of all these bureaucratic gymnastics will likely be a waste of time and money by states and local governments on dangerous and faulty importation programs.  A better use of tax dollars and time would be getting faster approvals for generic drugs to increase competition and improved trade deals that would have other countries pay their fair share of biopharmaceutical innovation that is currently shouldered by American taxpayers and consumers.