[J]ust about everyone agrees that Vermonters are paying too much for prescription drugs, but that unity does not extend to a plan approved by the Senate to address the issue by importing cheaper drugs from Canada.
Senators last week were unanimous in their support of the bill (S.175), which would first allocate money and resources toward determining the feasibility of an importing scheme that is also being considered in several other states.
However, even if Vermont decides that it’s a prudent path forward, the plan is a “long shot” in getting approval from federal regulators, said Human Services Secretary Al Gobeille, whose agency would be tasked with studying, and potentially implementing, the plan if the bill passes the House.
“This is one of those things where it’s not within the state’s (authority) — the law gets passed but it doesn’t mean we can do it,” he said. “Whenever we’re told to do something that you can’t actually do, I worry about that, and when there’s money attached to it, I really worry about that.”
The bill would allocate an estimated $150,000 to $250,000 in fiscal 2019 for the Agency of Human Services to design a wholesale prescription drug importation program. A formal request for approval from federal authorities would be sent by July 2019.
Gobeille said he is worried about how it would reflect on the agency in the likely event that the plan is rejected at that point.
“It’s not just the money — money’s an issue — but it’s also the credibility of, ‘did we try hard enough?’ It just puts us in a position in the future that may not leave us in the best light, knowing right now that it’s pretty much a long shot that they would ever give us permission to do it,” he said.
The main criticism of the plan — raised by both pharmaceutical representatives and federal authorities — has been that it would put residents of the state at risk by sidestepping U.S. regulators.
Gobeille said his primary concern was how the plan would impact federal Medicare drug rebates and the 340B drug discount program for hospitals.
“There’s not a person in Vermont who doesn’t want lower prescription drug prices,” he said. “So it’s a worthy idea, you know, it’s just will the practical application work.”
The Senate Health and Welfare Committee took testimony on the bill from those on both sides of the debate over its applicability.
In written testimony, the Healthcare Distribution Alliance, which represents pharmaceutical wholesale distributors, said S.175 would undermine the federal Drug Supply Chain Security Act (DSCSA).
“Allowing for the importation of drugs from Canada or other countries would render the DSCSA regulations useless, and thereby increase the risk of illegitimate or counterfeit medications entering the U.S. market and putting patient safety at risk,” wrote Bryan Lowe, the alliance’s director of state government affairs.
However, the sentiment put forward by others who testified was almost invariably positive. Mark Hage, director of benefit programs at the Vermont-NEA, pointed to the European Union, where countries have engaged in “parallel pharmaceutical trading” for decades.
“The idea of importing drugs from Canada or elsewhere has been irrationally controversial in the United States for some time,” he said. “Maximizing the purchasing power of prescription drug consumers in Vermont to achieve cost savings is enlightened, rational public policy.”
Trish Riley, executive director of the National Academy for State Health Policy, said she saw no reason why such plans should not be allowed, adding that ensuring that drugs were licensed for sale in Canada was sufficient to protect Vermonters’ safety.
“A state-administered program of importation can meet both savings and safety requirements and use the state’s existing commercial supply chain — state licensed wholesalers, distributors and pharmacies. No new complex distribution system would be required,” she said.
Gov. Phil Scott has said he would support the plan if it would reduce prescription drug costs and comply with federal law. All three members of Vermont’s congressional delegation in Washington have given their support to the proposal.
Sen. Bernie Sanders has been particularly critical of the pharmaceutical industry, arguing that five drug companies made $50 billion in profits last year. On average, Canada’s prescription drugs cost 30 percent less than in the United States.
John Tracy, Sen. Patrick Leahy’s Vermont state director, said in January that “the delegation will be very supportive in trying to assist with whatever it takes to be able to get the federal waiver,” but added: “We cannot guarantee success.”
As the notion of importing drugs from Canada has gained traction, federal authorities have made their opposition known. In March 2017, four former Food and Drug Administration commissioners issued a joint letter warning Congress against the proposals.
They said legalizing the import of drugs from other countries would “harm patients and consumers and compromise the carefully constructed system that guards the safety of our nation’s medical products.”
Sen. Claire Ayer, D-Addison and chair of the Senate Committee on Health and Welfare, said the potential payoff of the plan was worth the risk in trying to implement it.
“I’m not going to take all my money out of my children’s savings accounts and bet on this, but I think it’s a possibility,” she said of S.175 making it past federal authorities. “It’s a big lift but there’s a big possibility of a payback.”
Ayer pointed out that the state that has moved the furthest on a similar plan was Utah, where a drug import bill was passed by the House, meaning that two of the most senior U.S. senators would be pushing for it’s approval in Washington. “So you’ve got Orrin Hatch and Patrick Leahy — who has got horsepower around there, you know?” she said.
According to a report by the Vermont Legislative Joint Fiscal Office, “hiring expertise to assist in the planning and design of this program” would cost $125,000 to $250,000.
Preliminary estimates from Vermont’s Agency of Human Services put the cost of implementing the program at $1,055,000 to $1,234,000, about half of which would go toward hiring consultants to set up a wholesale business. It also said the scheme would require about six additional staffers for importing and purchasing.
A realistic timeline for the design, development, certification and implementation of the plan would be 18-24 months, the agency said, adding that even with additional staff and resources Vermont would be ready to move forward no sooner than fiscal 2020.