The Trump administration on Wednesday moved forward with two regulatory actions that would allow states and drugmakers to import prescription drugs, a top healthcare priority for the president's 2020 re-election campaign.
The Food and Drug Administration issued a proposed rule that would allow states to pursue pilot programs to import drugs from Canada and a draft guidance that would allow drugmakers to import their own products and sell them under different drug codes.
Several states are already preparing importation program applications, and Florida and Vermont have already submitted concept papers to HHS. Florida's Republican Gov. Ron DeSantis has been a key figure in pushing President Donald Trump to allow drug importation, and he signed a state law creating an importation program in June.
Colorado, Maine and Vermont have also passed drug importation laws, and HHS officials said they worked with New Hampshire's governor on the regulatory action.
National Academy for State Health Policy Executive Director Trish Riley, who has worked with state officials to develop importation programs, said states will review the specifications outlined in the rules to inform their planning processes.
"We are happy that it's happening, and that it's reflective of the work we are doing," Riley said.
It could be years before patients would actually see imported drugs even if all steps of the plan proceed, but HHS Secretary Alex Azar said the administration is moving as quickly as possible to finalize the regulatory actions. The actions are not classified as "economically significant" by the White House Office of Management and Budget.
Patients for Affordable Drugs President David Mitchell supported the move, but called for the administration to push for comprehensive drug-pricing reform in Congress that would help more consumers.
"It's not a solution that will lower drug prices for the overwhelming majority of Americans," Mitchell said.
States wouldn't be allowed to import biologics, including insulin, but drugmakers could do so under the second regulatory avenue detailed in the draft guidance. Azar said the guidance could potentially move faster than the proposed rule.
The second pathway would allow drugmakers to import their own FDA-approved drugs intended for sale in any foreign country, not just Canada. The policy would allow drugmakers to import the medicines under different drug codes, which allows manufacturers to circumvent rebate agreements with pharmacy benefit managers and offer their drugs at lower list prices. Azar said drugmakers had asked for a way to offer drugs without rebates.
"We will have to see if drug companies live up to it," Azar said.
Azar, a former executive at Eli Lilly, is a well-known opponent of rebates in the prescription drug supply chain, and championed a failed policy to pass all rebates to consumers at the point of sale.
The draft guidance applies only to brand drugs, but HHS will solicit comments on providing guidance on a similar importation approach for generic drugs.
The brand-drug lobby Pharmaceutical Research and Manufacturers of America opposed the move and highlighted that Canada may not go along with the importation plan.
"At a time when there are pragmatic policy solutions being considered to lower costs for seniors at the pharmacy counter and increase competition in the market, it is disappointing the administration once again put politics over patients," PhRMA President and CEO Stephen Ubl said.
Health Canada press secretary Alexander Cohen said Canadian health officials will continue talking with the White House and HHS about the importation plan, but that Health Canada's top priority is protecting the country's drug supply.
"Our message remains firm: we share the goal of ensuring people can get and afford the medication they need — but these measures will not have any significant impact on prices or access for Americans. We remain focused on ensuring Canadians have access to the medication they need," Cohen said in a statement.
HHS is legally allowed to approve importation programs as long as the agency can certify that the program would present no additional safety risk and would save consumers money. It remains unclear from preliminary analyses whether prescription drug importation programs will save substantial amounts of money, and Azar hinted on a call with reporters Tuesday evening that HHS has several options in how it defines the cost savings requirement.
"We will seek comment on how that should be interpreted," Azar said.
Azar has done a dramatic about-face on drug imports in the past year, and called importation from Canada "just a gimmick" in 2018. Azar changed his tune after Trump made importing prescription drugs from Canada a healthcare priority.
Critics of drug importation have voiced concerns about how imported drugs will comply with track-and-trace standards Congress created to ensure the security of the prescription drug supply chain. Former FDA Commissioner Dr. Scott Gottlieb, who now serves on Pfizer's board of directors, said the issues were addressed in the regulatory actions. Gottlieb had previously voiced skepticism about drug importation.
"While it may sharply limit who can actually import Canadian drugs under this framework, it maintains critical FDA safeguards to protect consumers," Gottlieb tweeted Wednesday morning.
A trade group representing distributors, which could be key players in state importation programs, opposed the plan.
"While we acknowledge that the administration and proponents of state importation plans are mindful of the safety protections offered by traceability requirements ... significant concerns remain about the feasibility of an importation program from an operations perspective," the Healthcare Distribution Alliance said in a statement, referring to a law that governs prescription drug tracking and labeling requirements.
Amid reported tensions between Azar and CMS Administrator Seema Verma, the administration expedited its timeline for releasing the proposed rule and draft guidance, as Modern Healthcare previously reported.
FDA Commissioner Dr. Stephen Hahn was sworn in Tuesday evening, but former Acting Commissioner Dr. Brett Giroir is promoting the importation policy. Giroir is an Azar ally and served as the assistant secretary for health before he was tapped to temporarily fill in at the helm of FDA.
Senate Finance Committee Chair Chuck Grassley (R-Iowa), who has long pushed for importation legislation in Congress, commended the administration's actions.
"I applaud President Trump and Secretary Azar for not succumbing to Big Pharma scare tactics and moving forward with this bold but thoughtful plan to finally allow more competition in the marketplace," Grassley said in a statement.