The main thing to keep in mind about the state’s plan to import cheap pharmaceuticals from Canada — which, Gov. Ron DeSantis’ promises notwithstanding, is not a dead certainty — is that not every Floridian would benefit immediately.
Unless you’re a patient at a public health clinic, a Medicaid recipient, a prison inmate, a kid in the juvenile justice system, or a client of some other agency that provides health care, don’t expect to benefit directly.
“Those aren’t savings that are ever realized by consumers,” Scott Darius, executive director of Florida Voices for Health, a statewide health advocacy organization said in a phone interview this week.
“A lot of the drugs would be administered through the Medicaid program, some of the public coverages. Some of those cost savings never get through to the consumers themselves,” Darius said.
Again, that’s presuming the program gets off the ground.
DeSantis has been talking as if the drug importation plan — which would represent a signature achievement for his administration — is imminently close to approval by the Biden administration. He traveled in late May to a massive warehouse in Lakeland, filled with towering metal shelves that he promised soon could be laden with prescription drugs from Canada.
“We’re ready to go. I mean, we’ve taken this very seriously,” DeSantis said during his May 28 news conference.
And, although the program was helped along by former President Donald Trump, the Biden administration also appears friendly toward the effort, in the governor’s view.
“We were told if it wasn’t denied last week, that we should assume it’s going to be approved,” DeSantis said during his news conference.
As of now, a spokesperson at the U.S. Food and Drug Administration said the agency “generally does not comment on the status of a pending proposal.” It will notify an entity in writing when there’s a decision.
Once the OK comes, the governor said: “In about 90 days, you guys come back here and you’ll see the shelves stocked with the prescription medications.”
What could get in the way
There remain two other possible impediments.
One is the Canadian government, which has announced opposition to allowing drugs approved in its market to be exported to the United States. In December, Health Minister Patty Hajdu barred export of any pharmaceutical if doing so would “cause or exacerbate” a shortage in Canada, according to a policy background paper.
That was still the Canadian position this week, according to a written statement provided to the Florida Phoenix from the Health Ministry:
“The Government of Canada has examined the U.S. rule on the importation of prescription drugs and determined that it will not provide an effective solution to the problem of high drug prices in the U.S. Canada’s drug market is too small to meet American consumer demand for prescription drugs or have an impact on high drug prices. Implementation of programs of this nature could exacerbate drug shortages in Canada, putting the health of Canadians at risk.”
Another potential problem is a lawsuit filed by in November by the Pharmaceutical Research and Manufacturers of America (PhRMA) and other industry groups in the U.S. District Court for the District of Columbia, challenging the program’s legality.
The manufacturers had lobbied heavily against the plan before the Legislature approved it in 2019, during DeSantis’ first year in office, warning it would allow introduction of dangerous counterfeit drugs.
All of the pieces of the machinery have been assembled, however, including that highly guarded warehouse in Lakeland. The Florida Department of Business and Professional Regulation has engaged LifeSciences Logistics LLC, based in Texas, to manage the supply chain.
“We think what the state of Florida — the governor and the secretaries — has designed is the most efficient, the most transparent, and the most secure pharmaceutical supply chain in the country,” LifeSciences CEO Richard Beeny said during the governor’s news conference.
The state has also hired a vendor north of the border, as required by HHS: Methapharm Specialty Pharmaceuticals, which maintains an office in Fort Lauderdale.
All of this is allowed under Section 804 of the Federal Food, Drug, and Cosmetic Act, approved by Congress in 2003 but never implemented until, possibly, now. The law allows states and tribal governments to apply for approval of “Section 804 implementation plans,” or SIPS — essentially, protocols for acquisition of pharmaceuticals in Canada and for testing, relabeling, and distributing them.
Former Health and Human Services Secretary Alex Azar — who once dismissed the very idea of drug imports from Canada as a “gimmick” — approved a final rule allowing them in October.
The Department of Health and Human Services has not replied to requests for comment on this story.
The 2003 law does envision imports for individual use from Canada, but the federal rule doesn’t address that angle. (In practice, some people already order drugs overseas but this is of ambiguous legality, although the FDA “does not generally enforce violations of drug importation for personal use” unless dangerous counterfeits are at issue, according to a legislative analysis.)
Rather, the plan targets patients under the care of state agencies for conditions including asthma, COPD, diabetes, HIV/AIDS, and mental illness. The state Department of Health would distribute these drugs to county health departments to supply to clients; pharmacies servicing Medicaid patients; Department of Corrections inmates; state disability center clients; and patients in state mental health treatment centers.
Officials estimate savings to these agencies of between $80 million to $150 million per year, DeSantis said. That’s a broad range, for sure, but reflects uncertainty over how well the program would contain costs, if at all. As PhRMA points out in a legal brief, Trump’s HHS declined to estimate what any savings might be. That legislative analysis did not hazard a guess.
PhRMA’s brief raises threats to manufacturers’ trade-secrets and free-speech rights, including that they may be required to turn over proprietary information to third parties to facilitate testing of imported drugs, and their Fifth Amendment right to protection against an uncompensated taking of their property.
“The final rule will also deprive PhRMA members of speech rights protected by the First Amendment, by compelling them to make certain statements about the drugs with which they may disagree and which involve disputed issues of fact and opinion, and by preventing them from adding statements to their labels explaining the differences between FDA-approved drugs and drugs imported under Section 804, and disassociating themselves from the latter,” the brief says.
In certifying the rule, Azar wrote that it “poses no additional risk to the public’s health and safety and will result in a significant reduction in the cost of covered products to the American consumer.” But he included no evidence of either contention, the PhRMA brief argues. Azar’s certification letter concedes that figure is impossible to calculate.
In short, the agency has acted in a manner “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” because it left so many questions unanswered about the program’s purported benefits, PhRMA argued.
A brief filed by Biden’s HHS on May 28 asks the judge to dismiss the PhRMA lawsuit based on its merits and procedural ground.
“Specifically, plaintiffs cannot establish any actual injury suffered by their members that is fairly traceable to the bare issuance of the certification or the rule,” it says.
And — perhaps undermining the governor’s confidence in imminent federal approval — the HHS brief notes that all of this is highly contingent:
“Plaintiffs filed suit before any SIP had even been proposed. To date, no SIPs have been authorized. Although two proposals have been submitted to FDA, no timeline exists for the agency to make a decision. Thus, the possible future injuries to plaintiffs’ members are overly speculative and not imminent, involving an attenuated chain of possibilities with independent third-parties and discretionary decisions of various government actors.”
Florida’s Agency for Health Care Administration offered a similar analysis noted in a brief filed on June 1.
Regarding the plan itself, Barbara Devane, a veteran Tallahassee lobbyist representing the Florida Alliance for Retired Americans, was dismissive during a telephone interview.
“I’m not all that interested in another Band-Aid approach to solving the problem of high prices of prescription drugs in this country, because we’ve heard it all before,” she said.
Devane sees more value in pressing Congress to adopt H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, which would require HHS to negotiate prices for high-cost drugs including insulin. The money saved could pay to expand Medicare coverage to include dental, vision, and hearing health, she said.
Biden endorsed H.R. 3 during his April 28 address to a joint session of Congress.
“Let’s do what we’ve always talked about for all the years I was down here in this — in this body — in Congress. Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower drug prescription prices,” the president said at the time.
“And, by the way, that won’t just — that won’t just help people on Medicare; it will lower prescription drug costs for everyone,” he said.