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Editorial: Vermont’s Long-Shot Drug Price Plan

  • FILE - In this Friday, July 8, 2016 file photo, a prescription is filled at a pharmacy in Sacramento, Calif. On Friday, May 11 2018, Trump is scheduled to give his first speech on how his administration will seek to lower drug prices. (AP Photo/Rich Pedroncelli, File) ap — Rich Pedroncelli

Published: 5/22/2018 10:10:07 PM
Modified: 5/22/2018 10:10:14 PM

Vermont has pipe-dreamed for years about combating sky-high prescription drug prices by importing pharmaceuticals from Canada, but perhaps never has the effort seemed more quixotic than at present.

Nonetheless, the Legislature passed and Gov. Phil Scott signed into law last week a bill that would create a wholesale drug importation scheme with the state’s neighbor to the north, a first-in-the-nation program. “I’m in favor of doing whatever we can do to reduce cost for Vermonters,” Scott said.

Earlier efforts to team with other states to allow individual consumers to import prescription drugs from Canada ran into regulatory problems on both sides of the border, The Associated Press reports, and ended in 2009. This initiative differs in that the state itself would become a wholesaler importing lower-cost pharmaceuticals from Canada; the bill Scott signed would set up an extensive regulatory and safety regimen to pull this off.

All that’s needed is a waiver from the U.S. Department of Health and Human Services, which has never granted one in the 15 years it has been authorized to permit states to import drugs. Nonetheless, state Sen. Claire Ayer, a Democrat from Addison County and one of the legislation’s co-sponsors, says she’s optimistic that the program will get approval, given its backing by Vermont’s congressional delegation and President Trump’s affinity for making a deal.

We fear the senator’s optimism is entirely misplaced. There’s nothing we know of to suggest that the Trump administration gives a hoot about the policy preferences of the Vermont congressional delegation or the financial hardships of individual Vermonters. And the president’s own prescription drug plan, unveiled with great fanfare the prior week, demonstrates vividly that far from draining the swamp, Trump is quite at home wading in with the lobbyists employed by big pharma.

His laundry list of proposals to “bring soaring drug prices back down to earth” failed to include the two that might actually accomplish that goal, both of which he embraced during his “populist” presidential campaign: having the federal government directly negotiate drug prices for Medicare and allowing Americans to import lower-cost medicines from abroad. His plan instead relies on market mechanisms such as increased competition; providing incentives for drugmakers to reduce list prices; and giving private drug plans more leeway to negotiate discounts for Medicare beneficiaries.

That this plan does not threaten drug industry profits can be inferred from the fact that stocks of several major drug and biotech companies surged immediately following Trump’s speech, as did those of several pharmacy benefit managers — the middlemen whom the president singled out for criticism. In fact, one securities analyst told The New York Times that the president’s speech was “very, very positive to pharma.”

Bizarrely enough, a centerpiece of the Trump plan is to make foreign countries that sensibly use government market power to negotiate lower prices from drug companies pay more. “It’s time to end the global freeloading once and for all,” the president said.

But as Dr. Mitchell Levine, chairman of Canada’s Patented Medicine Prices Review Board, noted, drug companies are still making profits in Canada — “just lower profits than in the United States.” And not explained in the Trump plan was why drugmakers would not simply pocket the higher profits reaped in foreign countries rather than passing savings along to American consumers.

This is the backdrop against which the Vermont Agency of Human Services is charged under the new legislation with designing a wholesale drug importation program and seeking a federal waiver by July 1, 2019, to implement it.

“We’ve been clear as an administration that this is a long shot,” understated Vermont’s secretary of human services, Al Gobeille. More like “no shot,” we think, although we would be happy to be proven wrong.

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