The biggest obstacle to Vermont importing drugs could be Canada itself

Published: 8/17/2019 10:11:47 PM
Modified: 8/17/2019 10:11:45 PM

Vermont still has many hurdles to overcome in its plan to import prescription drugs from Canada, and the most daunting one may be north of the border, where pharmaceutical lobbyists are leading a push to ban drug exports.

Since the Trump administration expressed interest in a national plan to cut pharmaceutical costs by importing drugs, lobbyists, policy wonks and politicians in Canada have expressed concerns about the impact it would have on drug supplies and skepticism about whether drug companies can be forced to play along.

“It’s the equivalent of Trump saying, ‘We’re going to build a wall and Mexico is going to pay for it,’ ” Andre Picard, a health columnist for Canada’s Globe and Mail newspaper, told the CBC. “It’s exactly the same thing. It’s ‘We’re going to have cheaper drugs and Canada’s going to pay for that.’ ”

But Trump’s plan to import drugs nationwide could imperil an effort already on the books in Vermont. Last year, Vermont’s Legislature passed SB 175, a bill calling for the state to develop a proposal for drug importation, making it the first state in the country to do so. Implementation has been slow, and its progress could be stymied even further by the renewed attention that Trump has drawn to the issue.

Pharmaceutical lobbyists are warning Canadian officials that the kind of bulk exportation Trump has championed could cause drug shortages in Canada, and are asking for legislation banning wholesale drug exports.

“Wholesalers should not be permitted to export drugs in bulk from Canada, and there should be strict and significant penalties for exporting drugs where their export is prohibited by law,” one pharmaceutical lobby group wrote earlier this year.

Canadian politicians are also demanding to know where Prime Minister Justin Trudeau — who has said he will ensure a steady supply of drugs to Canadian patients — stands on the issue.

“This has the potential to impact hundreds if not thousands of prescription drugs, many of which are essential for the preservation of life,” wrote Don Davies, a member of parliament for the New Democratic Party, in a letter to Health Minister Ginette Petitpas Taylor.

“I call on you, as the Minister of Health, immediately to reveal to Canadians what specific steps your government will take to ensure that all Canadians have confidence that the medication they need is not depleted as a result of this sudden decision from the White House,” he wrote.

When the Vermont bill was being drafted in the Legislature, among those who spoke in favor of the bill during its drafting were Rep. Peter Welch, D-Vt., and Sen. Bernie Sanders, I-Vt. Pharmaceutical lobbyists fought the bill, arguing that importing drugs that did not go through the U.S. regulatory system posed a public health danger.

The ensuing development of a wholesale drug import scheme in Vermont has been moving slowly. The bill required Vermont’s Agency of Human Services to come up with a proposal to submit to the federal government for approval, at which point it would be sent back to the Statehouse for a final OK.

The timeline to finalize a proposal was pushed back to 2020 in order to gather more information and coordinate with other states making a similar push. Gov. Phil Scott this week requested a meeting with U.S. Department of Health and Human Services Secretary Alex Azar II to discuss Vermont’s plans.

The general idea is to have a state wholesaler who imports a list of drugs — based on public need and price differential — and then sells them to distributors around Vermont.

Ena Backus, director of health care reform for Vermont’s Agency of Human Services, said the state is talking with other states — specifically Colorado and Florida — about Canada’s involvement, but hasn’t started talking with Canada yet.

“It’s certainly a dynamic in our conversations that we’ve been aware of,” she said Friday.

Backus said Canada’s concerns are likely coming to the fore now because the idea of drug importation has a clear path forward in the U.S., with support from the White House.

“It makes sense that they would be asking what this means,” Backus said, “because they’re now seeing a greater likelihood of a real effort to get this done.”

Dozens of lobbyists, politicians, health care advocates and policy experts testified during debate over the bill last year, but there was no one from Canada, or representing Canadian interests, on the witness lists in House or Senate committees. Chairs of the House and Senate committees who drafted the bill could not be reached Friday.

Trish Riley, executive director of the National Academy for State Health Policy, said the resistance to the plan in Canada — as with the U.S. — really comes from the drug companies, not politicians or advocates.

“Forty percent of the drugs at your local Walgreens were made someplace else, and 80% of the raw products in those drugs were made someplace else,” she said. “It’s already a global market.”

Riley stressed that entire states would not suddenly start importing all their prescription drugs from Canada — it would only be a few key products.

“It would just be for those people who can’t afford their medications — and just for a certain number of high cost drugs,” Riley said.

But Riley said despite lobbyists in Canada attempting to put up a roadblock to the plan, she’s hopeful that America will push back against drug companies — though she’s not sure exactly what that would look like.

“Every other country tells markets what they’ll pay,” Riley said. “Here, we say we’ll pay whatever you charge us. How long will Americans put up with this?”

Others are less convinced that Big Pharma can be forced to comply with a bilateral drug trade scheme, noting that they are being asked to participate in a system to undercut themselves.

“It’s not like there’s a consumer-direct factory where a reseller can simply back up a semi truck and load it full of drugs,” Paul Grootendorst, a pharmaceutical industry researcher at the University of Toronto, told Bloomberg.

“The one place to get the drugs is the manufacturers – they control the supply and they can take measures to cut it off if they believe it’s being redirected.”

Drug companies have done just that. In 2004, Pfizer was among the companies who threatened to stop dealing with pharmaceutical distributors in Canada if they exported drugs to the U.S., when momentum was building to increase cross-border sales.

However, Riley said Vermont was symbolic of a broad desire to take on the drug companies. People across the country want a higher volume of prescription drugs at a lower cost, and are willing to fight for it.

“Vermont was the first state to pass this law,” Riley said. “You’ll just have to keep pushing this envelope.”

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