FDA Allows FL To Import Canadian Rx: Impact On Employer Plans
Recent headlines announced a new regulatory view from the federal government regarding the ability of US consumers to obtain drugs from other countries. In particular, the Federal Drug Administration (FDA) approved an application from the State of Florida to obtain some specified prescription pharmaceuticals directly from Canadian sources for some of its state-funded programs and expanding to its Medicaid population. The move was hailed by many as a necessary first step in controlling prescription drug prices. How it will be implemented and whether the option benefits employer plans are still not clear. BackgroundThe US is typically described, as it is in this Rand study, as having higher costs for brand-name prescription drugs than other countries. There are reasons for that, including price controls in other countries that artificially restrict prices for brand-name drugs in those countries. Ironically, the Rand study also notes that prices for generic drugs are typically lower in the US than in those other countries. Nevertheless, for decades, many observers have advocated the ability of US-based individuals and plans, including employer-sponsored health plans, to import brand-name drugs from those other countries with the hope of driving down the costs of prescription drugs that are used by US citizens. Employer Plan ImpactsThere has traditionally been little enforcement of the prohibition of importing prescription drugs. Note that even bringing drugs to the US for personal use is technically illegal (unless it meets a couple of narrow exceptions), but it is just not an emphasis of the FDA for enforcement. There is no specified pathway for employer plans to gain access to the prescription drugs and the savings, if any, that the states can negotiate. It is entirely possible, given the statements from the Canadian authorities, that limited volumes, if any, of the drugs will be available given the concern of the Canadian government for the health of their citizens. It is also unclear whether expanding the program to other countries will assist with the volume of drugs available for import to the US. The pharmaceutical industry (which has its own point of view, of course) has provided information for years that it is just not possible for the FDA to know that drugs imported from other countries are safe and effective. The FDA itself has noted that it cannot vouch for the safety of drugs from other countries. So, employers will need to take additional steps to ensure the safety of the drugs if they seek to use that route. ConclusionEmployers have been seeking importation as a silver bullet to lower prescription drug costs for their plans. Given the prescription drug inflation of the last few years and the unsustainable costs, employers are desperate for some relief. The final verdict on whether this approach will effectively address medical costs remains uncertain. |
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