President Donald Trump listens to a question from the news media as he sits behind the Resolute Desk in the Oval Office of the White House in Washington, July 26, 2019.
Leah Millis | Reuters
The Trump administration outlined on Wednesday a proposal that would allow the U.S. to legally import cheaper prescription drugs from Canada, a tactic the U.S. pharmaceutical industry and regulators have warned could threaten consumer safety.
Under the plan, states, wholesalers and pharmacists, acting as intermediaries for consumers, would draft a proposal for safe importation of prescription drugs already available in the U.S. The groups would then submit the proposal to the Food and Drug Administration for approval.
“President Trump has been clear: for too long American patients have been paying exorbitantly high prices for prescription drugs that are made available to other countries at lower prices, ” Health and Human Services Secretary Alex Azar said in a statement. “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 told CNBC on Tuesday that the Trump administration was working on a proposal that would allow the United States to import drugs from Canada, where prices are lower.
In most circumstances, it is illegal to import medications from other countries for personal use, according to the Food and Drug Administration. The pharma industry argues importing drugs could threaten consumer safety. They say importing drugs increases the potential for counterfeit or adulterated products. Supporters, including Democratic presidential hopeful Sen. Bernie Sanders, say the tactic would increase competition and substantially lower prices.
The Pharmaceutical Research and Manufacturers of America, or PhRMA, the industry’s main trade group, did not immediately respond to CNBC’s request for comment.
The Trump administration proposal would also force states, wholesalers and pharmacists to include conditions to ensure importing drugs doesn’t pose an additional risk to the public’s health and safety. They would also need to show the plans would achieve significant cost savings to American consumers.
The announcement comes as Trump, who is seeking re-election, attempts to bring more transparency to drug prices and, ultimately, lower costs for consumers.
The Trump administration has had a few roadblocks in its attempt to lower drug costs. Earlier this month, the White House said it had withdrawn its plan to ban rebates that drugmakers pay to pharmacy benefit managers. That news came three days after a federal judge in Washington, D.C., dealt a blow to the administration by striking down a rule that would have forced pharmaceutical companies to disclose the list price of their drugs in television ads.
Last week, the White House said it is supporting a bill from Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore., the committee’s ranking member.
If passed, that bill would make changes to Medicare, the federal government’s health insurance plan for the elderly, by adding an out-of-pocket maximum for beneficiaries at $3,100 starting in 2022. It would also penalize pharmaceutical companies if the price of their drugs rise faster than inflation.