The leading Republican on the state Senate’s Health and Human Services Committee plans to introduce legislation to allow some form of importation of prescription drugs from outside the U.S. into Minnesota.
Sen. Michelle Benson of Ham Lake has been holding town halls around the state to hear from residents struggling to afford the high cost of drug prices — and to discuss two new options recently made available by the federal government for states to address the issue. Under a proposal by the U.S. Health and Human Services Department, states could craft demonstration projects to import some drugs from Canada to control costs.
That proposal represents a reversal by the federal agency. “For the first time in HHS’s history, we are open to importation,” Secretary Alex Azar told reporters in July. “What we’re saying is we’re open. There is a pathway. We can be convinced.” It also represents a turnaround for Azar, a former drug company executive who once said importation was “just a gimmick.”
Unlike the U.S., which doesn’t regulate the price of drugs, Canada sets a price cap for brand-name drugs based on prices in other industrialized countries. Under the proposal, HHS could allow importation if doing so wouldn’t jeopardize public health and would provide significant cost reductions for patients. Though the agency has such authority for more than a decade, it has never used it.
President Trump and Republicans around the country are looking for a way to show they are responding to complaints about high drug prices. The affordability of medications — illustrated most vividly by the high price of insulin — has shown up prominently in polling about 2020 election issues.
How it would work
The federal rule hasn’t been formally proposed, and it could take several years for it to be approved. Yet Benson said she wants to have legislation ready for introduction when the Legislature convenes on Feb. 11, 2020.
She said she currently favors what the federal agency calls “Pathway 2,” which wouldn’t import drugs directly from Canada. Instead, it would involve the state working with willing American drug makers to import their own products from Canada or other countries — or to offer their drugs domestically at the same prices they charge in foreign markets.
Benson said she has asked for a meeting with Gov. Tim Walz and has spoken briefly with House Health Care committee chair Rep. Tina Liebling about introducing a bill during the 2020 session.
“I’m gonna keep working to get language drafted,” Benson said after a town hall in Plymouth with fellow Republican Sen. Paul Anderson. “I have a growing interest in pathway 2, where we would partner directly with manufacturers.”
She said the state might need to do a pilot project with some critical drugs that have become unaffordable for some patients.
Florida is considered a leader on the issue, having passed legislation earlier this year, though its plan calls for a pilot project that involves buying medications in bulk from Canadian wholesalers, which the feds refer to as Pathway 1. Generally, drug supplies in the U.S. are strictly tracked and monitored to assure quality and combat counterfeiting, and Florida’s plan needs to be approved by Azar before it can be implemented.
“If we can be part of a federal waiver based on the Florida law, I would take that as a victory,” Benson said. “I would take Pathway 1 — but I also want to work on Pathway 2 in case waivers get stalled.”
Walz wants to do more
So why would drug makers want to help states buy medications at lower prices?
Benson said drug makers have grown frustrated with the current system in which drug buyers — either pharmacy benefit managers working with insurance companies or government health providers — seek heavy rebates for their purchases.
As a result, drug makers increase prices and then effectively reduce them by paying the rebates — a system that means patients not on government health programs, or without insurance, often end up paying the highest prices, since they aren’t privy to the rebates, Benson said.
Patients then direct their anger about those prices at the drug makers. “They keep getting beat up,” she said. “So let’s try a different path to getting necessary drugs to Minnesotans. We’re trying to put downward pressure on this system.” She said her goal is to have bill language ready for review by groups interested in the issue shortly after the first of the year.
Walz, through a spokesperson, said he was open to the idea but said he also thinks more needs to be done. He has been critical of drug makers, not only because of rapid increases in insulin prices but also for the cost of brand name and generic drugs. “Too many Minnesotans struggle to afford the skyrocketing costs of prescription drugs,” Walz said in a statement. “We should consider all options to provide Minnesotans relief, but our main focus must be to create more affordable options here in Minnesota.”
During a June round table with diabetics and their family members, Walz had even harsher words for drug companies. “I’m not going to step in and watch people make obscene profits, shift the cost back to the taxpayers of Minnesota and then walk away with that money too,” he said.
Cody Wiberg, the executive director of the state board of pharmacy, said he has not been involved in crafting the importation legislation, and that the board hasn’t taken a position on the issue. “I would not ask the Board to take any position until legislation is publicly available,” he said.
The Pharmaceutical Research and Manufacturers of America (PhRMA), the trade organization that represents the makers of brand-name drugs, opposes the federal rule, mostly on safety concerns, and the group asked Florida Gov. Ron DeSantis to veto the bill that put that state first in line to import drugs from Canada. DeSantis ended up signing the bill.
Nick McGee, director of public affairs for PhRMA, said the group’s opposition hasn’t changed since that letter was sent. “It’s not just our position. It’s the position of former FDA commissioners and law enforcement, that this type of proposal is too dangerous for patients,” McGee said. “The United States has the gold standard of drug supply chains and these proposals open up that supply chain and there’s no way to guarantee the safety of drugs that come from outside the United States.”
Even supplies that are imported from Canada aren’t guaranteed to be made there and could have passed through Canada from other countries, he said.
Canadian health officials have also criticized the plan, fearing it could cause shortages of drug supplies in that country if it becomes overwhelmed with demand from the much-larger population of the U.S.