Experts Examine Sustainable Solutions to Drug Pricing Problem as Trump Promotes Importation

By Venus Upadhayaya, Epoch Times
November 23, 2019 Updated: November 28, 2019

President Donald Trump said on Nov. 22 that he and Secretary of the Department of Health & Human Services Alex Azar, will soon release a plan that will enable Florida and other states to import affordable drugs.

“SecAzar and I will soon release a plan to let Florida and other States import prescription drugs that are MUCH CHEAPER than what we have now! Hard-working Americans don’t deserve to pay such high prices for the drugs they need. We are fighting DAILY to make sure this HAPPENS…,” Trump said in a Tweet, adding that his administration will soon put more options on the table.

While Trump blamed the Democrats for “FEWER cures! FEWER treatments!” experts and activists who have welcomed the importation measures told The Epoch Times that importation is a symptom of the problem and not a sustainable solution.

“Vermont, Florida, Colorado, and Maine have passed legislation to allow importation, but they must get approval from the Trump administration before they move forward,” David Mitchell, Founder of Patients for Affordable Drugs told The Epoch Times.

Colorado is set to submit a plan for federal approval by Sept. 1, 2020 (pdf) to import cheaper prescription drugs from Canada.

The bill, Import Prescription Drugs from Canada, created the Canadian Prescription Drug Importation Program in the Colorado Department of Health Care Policy and Financing (DHCPF) and “will increase state expenditures in FY 2019-20 and FY 2020-21 to design the program and submit a federal waiver request.”

On June 12, Florida Gov. Ron DeSantis, a Republican, signed CS/HB 19: Prescription Drug Importation Programs, making Florida the second state to do so.

“Floridians have been paying inexcusably high prices for prescription drugs for far too long and today, we are taking action,” said Governor DeSantis in an official release.

Last year, Vermont became the first state in the country to approve the importation of affordable drugs from Canada after Vermont Gov. Philip Scott, a Republican, signed the enactment of S.175. on May 16, 2018.

“It is outrageous that a commonly used medicine like Lipitor costs 46-times more per pill in the United States than in Canada. In fact, legislative staff determined that importing just two diabetes drugs from Canada would save the state’s teacher health insurance plan more than $500,000 each year,” said Vermont Senate President Pro Tem Tim Ashe after the bill was passed by Vermont House, according to National Academy for State Health Policy.

Mitchell said that importing prescription drugs is a “symptom” of the problem and that President Donald Trump has been making other efforts toward sustainable solutions.

Trump remarked last year on Oct. 25 that he has made reducing drug prices a priority. Trump’s major efforts include two laws—Know the Lowest Price Act and the Patient Right to Know Act.

Mitchell said he strongly supports Trump’s efforts to reduce the price of prescription drugs, however, he also mentions that “any changes to accomplish this will take some time to implement if they are passed into law.”

President Trump Discusses Drug Pricing At Health And Human Resources Department
U.S. President Donald Trump and Health and Human Services Secretary Alex Azar at HHS headquarters in Washington on Oct. 25, 2018. (Chip Somodevilla/Getty Images)

Why Importation?

Alan Sager, a Boston expert on Health Law, Policy, and Management, told The Epoch Times that Americans have long since been buying prescription drugs from both Canada and Mexico.

“From Canada, we have done so by driving across the border and also by mail order. The numbers appear to have declined somewhat after the implementation of Medicare Part D Rx insurance in 2003,” said Sager who’s also a Co-Director of the Health Reform Program at Boston University School of Public Health.

“But they seem to have picked up again, in part because many people have faced high and rising prescription drug out-of-pocket payments and in part because of high U.S. prices for many meds,” he said adding that the prescription drug prices in the country are the “highest in the world.”

According to the Commonwealth Fund, prescription drug spending in the United States is far higher than in any other nine high-income countries it considered for computation in 2015. The study says that this is despite the Americans consuming “similar amounts of drugs as people do in other countries.”

Mitchell explained how the high prices of prescription drugs in the United States are sustained by drug corporations who have for decades built systems that benefit them over their patients’ interests.

“The reason we pay so much more for drugs in the U.S. is because drug corporations have spent 40 years and billions of dollars building a system that benefits them—not the patients and consumers it should serve,” said Mitchell.

“They have monopoly pricing power and they use it to extract outrageous prices that force people to ration drugs. People are even dying because of high drug prices. At least four people have died in the past 12 months because they tried to ration their insulin,” he added.

Sager explained how importation or re-importation from Canada doesn’t lower prices “through free trade or competition.”

“Rather, low prices result from washing U.S.-made drugs in Canadian laundromats to cleanse them of high prices. Canadians are doing the job of regulating drug prices for Americans who buy-in or from Canada,” he said.

A shelf of drugs at a pharmacy in Quebec City in a file photos. (THE CANADIAN PRESS/Jacques Boissinot)
A shelf of drugs at a pharmacy in Quebec City in a file photo. (The Canadian Press/Jacques Boissinot)

Opponents of Importation

Sager explained how the drug makers in the United States are aware that they can’t “politically, financially, or medically” sustain the high drug prices in the “long haul.”

“That is why they fight desperately to preserve them (high prices) as long as possible. This is what people do when they lack a real business plan to sustain profits,” he said adding that the United States is the only rich democracy in the world where prescription drug prices are unregulated, making drug corporations opponents of importation laws.

“This makes the world’s drugmakers financially dependent on the U.S. market.  They earn about 40 percent of their worldwide revenues from the U.S., which holds only about 4.5 percent of the world’s people,” he explained. “This is why drug makers fight to hold down Americans’ purchases of meds in or from Canada.”

A few months before DeSantis signed CS/HB 19, the Partnership for Safe Medicines (PSM), which calls itself a public health group comprised of 45 non-profit organizations, released a few ads in several media markets around Florida promoting the “dangerous idea” of importation of prescription drugs.

The non-profit describes itself as a “group committed to the safety of prescription drugs and protecting consumers against counterfeit, substandard or otherwise unsafe medicines,” but Mitchell says it is a “pharma front group, not a public health organization.”

The Executive Director of PSM, Shabbir Imber Safdar, called Florida’s submission of a drug importation plan  to the U.S. Department of Health and Human Services “sloppy, irresponsible, and politically-motivated” in a statement released on Aug. 26. 

“For example, one of the drugs identified to be imported from Canada (diclegis for pregnancy nausea) is often replaced by two generic medicines that are widely and cheaply available today in the U.S. It would be cheaper and safer to continue with this standard practice than attempting to import the branded medicine from Canada,” said Safdar.

A Bloomberg report that dug deeper into PSM’s Florida ads and described the non-profit as “been funded and operated by the pharmaceutical industry’s trade association.” It investigated how “big pharma helped pay the tab.”

Sager said PSM’s “opposition to importing drugs probably aims and does more to boost profits on drugs sold in the U.S. than to promote patient safety or good health.”

Medicines that drug companies peddle as safe aren’t always safe. (nevodka/iStock)
(nevodka/iStock)

Drug Shortages in Canada

The Canadian Pharmacists Association said in a release announcing its 2019 election platform on Sept. 17, that the U.S. drug importation plan has caused a strain on Canada’s drug supply.

“With a growing number of drug shortages over the past year and potential additional strain on Canada’s drug supply due to U.S. drug importation plans, Canadian pharmacists have been increasingly calling on government to develop a comprehensive action plan on drug shortages,” said the Association.

However, Steve Morgan, a professor in the School of Population and Public Health at the University of British Columbia, Vancouver, told The Epoch Times that Americans purchasing prescription drugs from Canada is not a major problem and is not the primary cause of drug shortages in Canada.

He said drug shortages are a global phenomenon and Canada is not unique in experiencing them.

“Shortages of most drugs are due to active ingredient supply interruptions. Often these interruptions are unexpected, such as when there is a fire in a key manufacturing facility or a regulatory shutdown in such a facility,” he said.

“Take shortages of heparin and similar drugs, for example. There have been recent shortages of those medications because of swine flu in China. The affected drugs are derived from by-products of pork production and therefore the global supply chain can be thrown off by things like swine flu. Thus, this has nothing to do with drug prices or cross-border drug shopping,” explained Morgan.

He said that recent shortages have also happened because the Chinese regime has shut down some production facilities that produce the active ingredients of certain medicines, as part of its new environmental policies.

“China relies on a lot of coal-fueled electricity generation and has had to have periodic blackouts to address air quality concerns as a result.

“The WHO is aware of this and is considering ways that the global community can better balance the supply of affected active ingredients and/or better prepare for when the Chinese government is planning a temporary shutdown of key factories. Again, nothing to do with drug prices or cross-border drug shopping,” said Morgan.

Morgan said Canadians are keeping a close watch on the issue of prescription drug exports to the United States and are “not ready to sound the alarm bells.”

“There is good reason to believe that major institutional purchasers in the USA—i.e., the big private and public insurers there—will continue to buy their medicines in the USA because they likely negotiate better prices with manufacturers (via confidential rebates) than Canadian list prices would represent to them. As such, the actual demand from the USA is likely to be modest,” he explained.

President Trump and Alex Azar
President Donald Trump, joined by Vice President Mike Pence (L) and Secretary of Health and Human Services Alex Azar (R), speaks during a signing ceremony in the Oval Office of the White House in Washington on July 1, 2019. (Carolyn Kaster/AP Photo)

An Issue for Debate in 2020 Elections

A new study by Gallup and West Health said that at least 58 million adults in the United States have been unable to afford prescription drugs at least once in the past 12 months.

The study called it an “erosion of trust” and said, “close to nine in 10 U.S. adults report that the costs of prescription drugs are ‘usually much higher’ (69 percent) or ‘tend to be somewhat higher’ (20 percent) than what consumers should be paying for them.”

It said drug prices impact a large portion of the population in the country and with 2020 elections coming next year, the presidential candidates will be increasingly asked about high prices of prescription drugs.

An editorial from The Globe and Mail called Senator Bernie Sanders’ bus trip to Windsor, Ontario, to buy Insulin at one-tenth of the U.S. price a “so-called caravan, most of which was made up of reporters.”

“The ‘caravans’ are carefully staged media events meant to draw attention to the high price of medicines in the USA, but are not indicative of routine purchasing practices of the average American,” said Morgan.

Mitchell said: “HR3 (The Lower Drug Costs Now Act) and PDPRA (Prescription Drug Pricing Reduction Act of 2019, S. 2543) are the two most important long-term solutions.”

According to him, H.R. 3 would lower drug prices for millions and will save taxpayers $345 billion in Medicare Spending from 2023-2029. It is awaiting a vote by the full House of Representatives.

The PDPRA would restructure Medicare Part D to “cap seniors’ out of pocket costs in Part D at $3,100 annually. Like H.R. 3, the PDPRA would also penalize drug companies for increasing prices in Part D faster than the rate of inflation.”

Correction: This article has been updated to correctly attribute a Canadian Pharmacists Association news release and a study by Gallup and West Health. The Epoch Times regrets the errors.

Follow Venus on Twitter: @venusupadhayaya
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