Updated at 1:10 p.m. ET
The Trump administration is outlining two possible ways certain drugs that were intended for foreign markets could be imported to the U.S. — a move that would clear the way to import some prescription drugs from Canada.
"Today's announcement outlines the pathways the Administration intends to explore to allow safe importation of certain prescription drugs to lower prices and reduce out of pocket costs for American patients," Health and Human Services Secretary Alex Azar said in a statement about the plan. "This is the next important step in the Administration's work to end foreign freeloading and put American patients first."
The Department of Health and Human Services outlined two "pathways" for importing the drugs to the U.S.
In one initiative, the Food and Drug Administration and HHS will rely on their rulemaking authority to use existing federal law to set up pilot projects from states or wholesalers "outlining how they would import certain drugs from Canada that are versions of FDA-approved drugs that are manufactured consistent with the FDA approval."
Separately, the FDA will work on safety guidelines for drug manufacturers who want to import any drugs they sell in foreign countries to the U.S. market. The HHS statement says manufacturers would use a new National Drug Code that could allow them to price drugs lower than what is required by their current distribution contracts.
"This pathway could be particularly helpful to patients with significantly high cost prescription drugs," HHS says. "This would potentially include medications like insulin used to treat diabetes, as well as those used to treat rheumatoid arthritis, cardiovascular disorders, and cancer."
Wednesday's announcement marks the first step in the process. It could take years to implement the plans — which could also be challenged in court.
A growing number of U.S. states have been considering their own plans to import prescription drugs from Canada, hoping to bargain for better deals than the current system allows.
Strapped with high costs from paying for prescription drugs through Medicaid and state employee plans, Florida, Vermont, Maine and Colorado have approved their own drug import laws. More than half of all U.S. states have proposed such measures this year, as Trish Riley, executive director of the National Academy for State Health Policy, told NPR's Selena Simmons-Duffin last month.
But before those states can actually start cutting their own deals to import drugs, they need approval from the HHS. With today's announcement, the federal government is making a move in that direction.
As for why Canada enjoys lower drug prices, Rachel Sachs, a law professor at Washington University in St. Louis, told Simmons-Duffin that it's a matter of negotiation.
"In the U.S., we've constructed a system where pharmaceutical companies are able to charge far higher prices because there's no mechanism to push back," Sachs said. "There's no way to say, 'We're not going to pay for that drug unless we get it at a better price.' "
Less than a year ago, President Trump spoke out against the idea of bringing prescription drugs in from Canada.
"We want our drugs to be made here," Trump said last October. "When you talk prescription drugs, we don't like getting them from foreign countries. We don't know what's happening with those drugs, how they're being made. Too important."
Trump's remarks came after signing the NAFTA-replacing U.S.-Mexico-Canada Agreement — a deal that was criticized for introducing protections for pharmaceutical companies.
By setting in motion a plan to import medications from Canada, Azar is embracing an idea he had previously dismissed as a gimmick. In May 2018, Azar said:
"Many people may be familiar with proposals to give our seniors access to cheaper drugs by importing drugs from other countries, such as Canada. This, too, is a gimmick. It has been assessed multiple times by the Congressional Budget Office, and CBO has said it would have no meaningful effect."
The secretary was apparently referring to a 2004 analysis in which the CBO reported that any "reduction in drug spending from importation would be small," given the size of Canada's drug market compared with that of the U.S.
In that analysis, the CBO also said that "proposals to permit parallel trade with a large group of countries would offer greater potential savings."
And there are regulatory hurdles to consider. Criticizing the deal as a "fantasy solution," pharmaceutical industry analyst Dr. Adam Fein said Wednesday that the proposal would complicate U.S. efforts to secure its drug supply chain and keep counterfeit and impure drugs off the market.
"There is no legal or operational way of transforming a drug packaged for a foreign market into a drug that meets the U.S. requirements of our in-progress track-and-trace system," Fein said in an email to NPR. "What's more, there is no way to alter the law to enable importation without undermining the law's purpose and value."
There are already signs that some in Canada's medical industry might balk at the idea of sharing its supply of pharmaceutical drugs with the U.S.
"The Canadian medicine supply is not sufficient to support both Canadian and U.S. consumers," a coalition of health, hospital and pharmacy groups said in a letter to Canadian Minister of Health Ginette Petitpas-Taylor.
The letter noted that Canada is allocated certain quantities of drugs based on national estimates, and warned that the county's prescription drug shortages could grow even worse if the U.S. begins to tap into its neighbor's supply.
But some in the U.S. and Canada have said those concerns are overblown.
"Most of the shortages Canadians are currently having are generics — and those are not the drugs we would look to import," says Trish Riley of the NASHP. "The focus is on high-cost drugs," she adds.
In response to Wednesday's announcement by the U.S., Petitpas-Taylor issued a statement saying the health ministry constantly monitors the supply of drugs in Canada.
Promising that her agency will work to ensure the new U.S. proposal won't harm Canadians, she added, "We're in touch with U.S. officials and look forward to discussing today's announcement with them."