It’s been a year and nine months since Governor Ron DeSantis asked the US Department of Health and Human Services to import cheaper pharmaceuticals from Canada. This was after his boss Donald Trump lost re-election but was still in the White House.
The answer so far: mostly crickets.
Now, with the U.S. House of Representatives poised to pass the Democrats’ Cut Inflation Act as early as Friday, the case for Canada’s plan clearly looks shaky.
Indeed, the legislation would allow Medicare to begin negotiating cheaper drug prices with pharmaceutical companies from 2026, achieving price reductions without piggybacking on similar price negotiations long practiced in Canada – or the need to persuade Canadians to follow.
“So why would they participate in this unless they have a lot of ability and can move drugs and make more money I guess. But, as far as I know from the Canadian side, they don’t have one [to spare]Louisa McQueeney of Florida Voices for Health told Phoenix, an advocacy organization, in a phone interview.
McQueeney added of the import plan: “For me, it’s more like talking points – I’m doing this to bring your drug prices down. But, in reality, it doesn’t matter because it won’t happen.
Nevertheless, the state government proceeded as if the plan would work. For example, in June 2021, the Governor held a press conference at a massive Lakeland warehouse operated by LifeSciences Logistics LLC to announce that the state had contracted the company to manage the pharmaceutical import supply chain. . The state even hired a consultant in Canada to work on the project.
It is true that a month after this event, President Joe Biden ordered the Food and Drug Administration to review the import system. But not a word has been issued by the federal government about the state’s request since then.
The import program involves Section 804 of the federal Food, Drug, and Cosmetic Act, approved by Congress in 2003 but never implemented. It allows states and tribal governments to submit protocols for the acquisition of pharmaceuticals in Canada and to test, relabel and release them for distribution here.
Normal people wouldn’t immediately benefit from it. Instead, the beneficiaries would be patients cared for by state agencies for conditions including asthma, COPD, diabetes, HIV/AIDS and mental illness. The Florida Department of Health would distribute these drugs to county health departments to provide to customers; pharmacies serving Medicaid patients; Department of Corrections inmates; state disability center clients; and patients in public mental health treatment centers.
The state estimated savings between $80 million and $150 million a year — a wide range reflecting the fact that there is no way of knowing how well the program would contain costs, if at all.
PhRMA, Pharmaceutical Research and Manufacturers of America, filed a lawsuit to block the plan and the case is pending in US District Court for the District of Columbia. Florida has filed an amicus brief opposing the industry in this case.
Tellingly, the Biden administration argued in May 2021 that the complaint was moot because the imports were “too speculative and not imminent,” Kaiser Health News reported.
(PhRMA also hinted that it would take legal action if the IRA becomes law, according to a Politico report.)
Asked for comment, the U.S. Food and Drug Administration provided much the same response it gave when asking for the Phoenix last year:
“The FDA does not generally comment on the status of a pending proposal, but will notify an entity in writing when we have decided whether or not to authorize an import program proposal under Section 804. At this time , the FDA has not authorized any Section 804 import programs. Additionally, the FDA does not comment on proposed or pending legislation.
The same goes for Canadians, who drafted an administrative rule blocking “the distribution of drugs labeled in Canada for consumption or use outside Canada if doing so could cause or worsen a shortage,” the Department of Health said. in a written statement this week.
“Drugs destined for the Canadian market may continue to be sold for consumption outside of Canada, if the sale does not cause or exacerbate a drug shortage in Canada. Drugs that are not intended for the Canadian market and are manufactured solely for export are not included in the scope of the ban,” the ministry said.
Some Americans order drugs from abroad, but this is of ambiguous legality, although the FDA “generally does not enforce violations of the importation of drugs for personal use” unless dangerous counterfeits are in cause, according to a Florida legislative analysis.
The IRA is an omnibus bill with provisions targeting climate change, taxation, etc. Significantly, the bill would allow Medicare to negotiate prices starting in 2026 for certain drugs covered by Part D.
This is the program’s drug plan. The number of drugs subject to price negotiations would increase to 20 in 2029, including those available under Medicare Part B, which are dispensed by physicians.
The bill does not identify specific drugs; Medicare would identify them based on price trends. However, drugs on this list compiled by AARP are good candidates; they represent the drugs on which Medicare spent the most in 2020 and whose prices have increased this year:
Eliquis, a blood thinner; Revlimid, an anticancer drug; Xarelto, another blood thinner; Januvia, for diabetes; Trulicity, also for diabetes; Imbruvica, for cancer; Jardiance, for diabetes; Humira, for rheumatoid arthritis and plaque psoriasis; Ibrance, for cancer; and Symbicort, for asthma.
Participants’ drug costs would be capped at $2,000 per year, starting in 2025, and the program would provide free vaccines. The bill lost language that would have required drug companies to pay rebates if their prices exceeded inflation.
The implications are significant, since 64 million people — older Americans and people with disabilities — participate in Medicare. Nearly 49 million people are on some form of drug plan.
The nonpartisan Committee for a Responsible Federal Budget estimates that the legislation would save the government $320 billion.
“While these policies reduce the cost of health insurance, they do so by reducing prescription drug costs, not by reducing benefits,” the organization wrote in a position paper.
“In fact, we believe the policies as a whole would improve benefits by reducing premiums and out-of-pocket expenses, including a $2,000 annual cap on out-of-pocket expenses. In addition to saving the government nearly $300 billion, the IRA would save American families nearly $300 billion more.
According to the Kaiser Family Foundation, 50% of the 3,343 drugs covered by Medicare Part D and 48% of the 568 drugs distributed under Part B saw their prices increase beyond inflation between July 2019 and July 2020.
“For all Part D drugs whose prices increased more than inflation, the median price increase was 5.6%; for Part B, the median price increase was 5.4%,” Kaiser reported.
The legislation would extend the Affordable Care Act insurance exchange premium tax credit for three years. The credit helps exchange members pay ACA premiums if their income is less than 400% above the federal poverty level (which is $26,500 for a family of four) or if the filer or spouse has received unemployment benefits for at least one week in a year.
“These policies will save millions of Americans thousands of dollars a year,” Michael Womack, state director of Protect Our Care Florida, said in a recent Zoom press conference. He called it “the greatest health care achievement since the Affordable Care Act.”
“This is a huge win for Florida,” Florida US Representative Darren Soto said at the same conference.
“We have the largest federal ACA exchange in the country – 2.7 million Floridians; a whopping 2.7 million Floridians – get their care from the ACA exchange, more than 10% from Florida.
This, he said, is due to the large number of small businesses and self-employed people who do not have access to employer-provided insurance.
“The ACA was designed for states like Florida,” Soto said.
“The limit on personal expenses is essential. At $2,000 per year in out-of-pocket expenses, we could see seniors saving anywhere from $1,500 to over $7,000 among your average senior in Florida,” he said.
“Unfortunately, Republicans in the Senate have blocked a $35 cap on insulin for the rest of Americans. We will continue this fight,” Soto said.