Amid ever-rising prescription drug costs, a bill working its way through the Florida state legislature is the latest effort to use Canadian prescription drugs to cap prices.
The idea, which would tie American prices to Canada's capped rates, is increasingly popular even among Republicans. However, critics have voiced concerns, worrying that what seems like an easy, safe proposal could actually open yet another floodgate of dangerous drugs into the United States.
Recent Stories in Issues
The high price of prescription drugs is a perennial challenge for policymakers and consumers alike. Although more than 80 percent of prescriptions filled in the United States are for generics, the remaining 20 percent of brand-name prescriptions contribute to America spending more on healthcare than most of the rest of the developed world. A 2016 study indicated that per capita prescription drug spending in the United States was more than twice that of 19 other industrialized nations, thanks largely to the high cost of brand-name drugs.
Among those other nations is America's northern neighbor, where government regulators set an upper bound on some pharmaceutical prices. Importation takes advantage of this disparity: By essentially creating a common market for drugs, the argument goes, U.S. prices will be driven down to Canadian levels.
This idea is commonly associated with the left—Sen. Bernie Sanders (I., Vt.), for example, has long been a supporter. As drug prices continue to rise, Republicans have grown more willing to consider government action. Sens. Josh Hawley (R., Mo.) and Rick Scott (R., Fla.) have floated a bill to cap prescription drug prices, while Sen. Chuck Grassley (R., Iowa) has his own bipartisan drug importation proposal with Sen. Amy Klobuchar (D., Minn.).
This new Republican interest in importation extends to the state level. The push for drug importation in Florida is being led by Gov. Ron DeSantis (R., Fla.) along with Republican leaders in the State House. And, DeSantis claimed in February, he has the support of President Donald Trump to do so.
The Florida bill still needs to pass the state Senate, as well as garner the approval of the Department of Health and Human Services (a requirement of the 2003 Medicare Modernization Act). But if it does, it will set up the second program for drug importation in the nation (Vermont's own bill passed last year, but is still awaiting HHS approval). Twelve other state legislatures are considering their own proposals.
What the Florida program would look like in practice, however, is a little bit unclear. The bill text charges an as-of-yet-unspecified "vendor" with identifying a list of drugs which the state would benefit from importing; identifying Canadian suppliers that meet Canadian government standards; and confirming that imported drugs meet FDA standards for safety, generate cost-savings, and are not controlled or otherwise illegal substances. The House version of the bill also includes a more general license, permitting the importation of drugs from other countries where the federal government acknowledges good manufacturing practices, although it does not appear in the Senate version.
Although the bill lays out strict requirements as to the quality of Canadian pharmacies and drugs, critics fear that the actual realities of regulatory oversight—especially in the hand of an as-yet-unnamed private vendor—will simply be too challenging to manage responsibly.
George Karavetsos, a former director of the FDA's Office of Criminal Investigations, used to be responsible for assessing the security and integrity of drug supply chains. In his view, the decision to place oversight of the new Canadian drug supply chain in the hands of an unspecified, non-governmental entity could be a disastrous mistake.
"The bill is requiring a vendor to step in the shoes of the FDA to ensure the safety of the drugs coming in," Karavetsos told the Free Beacon. "Florida has decided to delegate the awesome responsibility that the FDA has to protect the American public, and in this case Floridians, with a vendor."
Importantly, while the vendor would rely on Canadian certification to determine if a pharmacy is legitimate, the Canadian government itself would play no role in the actual importation of drugs. The burden of managing the state's drug supply—which, given porous between-state borders, could rapidly become the nation's drug supply—would be in the hands of a single vendor.
What is more, Karavetsos said, the drugs themselves would almost necessarily need to come from non-Canadian sources. That is because the Canadian market, which serves 37 million people, already suffers from shortages: about 1,000 annually between 2010 and 2017. The addition of Florida’s 21 million-person population to that market could only exacerbate the problem.
"Canada's pharmaceutical industry is already strained trying to serve the relatively small Canadian market, never mind serving more than 300 million American consumers," a former Canadian Minister of Health wrote in 2017.
Asked about this concern, the Florida bill's sponsor Rep. Tom Leek responded, "I don't think it matters. I don't think it's an excuse not to try."
However, there is a real risk that it would matter, in that Canada would likely come to serve as a transshipment point for pharmaceuticals made in China or India, which often fail FDA standards of quality. This is especially the case for online pharmacies: The FDA recently cited one, CanaRX, for selling "unapproved, misbranded and unsafe" drugs to Americans.
This concern with supply chain integrity is what has led law enforcement officers to oppose drug importation in the past. Former FBI director Louis Freeh found that there was an "overwhelming consensus" among law enforcement that drug important would lead to an "increased flow of potentially illegitimate pharmaceutical products entering the U.S. drug supply undetected due to the inability to sufficiently inspect the volume entering the United States."
Two of these law enforcement officers are Javier Peña and Steve Murphy, former DEA agents who told the Free Beacon they were opposed to drug importation.
"We see these drug distribution networks, we see these criminal organizations all over the world. We've seen them do coke, heroin, whatever they can make money in. Now we're starting to see them smuggle fake pills, fentanyl-laced pills," Peña said. "They're gonna see this as an opportunity to get involved with importation of legitimate pharmaceutical pills."
Such fake pharmaceuticals and supplements already plague the American market under the watchful eye of the DEA and FDA. It is unlikely, in Peña and Murphy's estimation, that Florida and the disinterested Canadian government would fare better.