Gov. Phil Scott has requested a meeting with U.S. Department of Health and Human Services Secretary Alex Azar II to chart a path forward on importing lower-cost prescription drugs from Canada into Vermont.
The request comes after President Donald Trump’s administration announced last month that it intends to usher in a system to allow the importation of cheaper pharmaceuticals from Canada.
On July 31, the Trump administration unveiled a “safe importation action plan,” which would encourage states, wholesalers or pharmacists to submit proposals to import drugs from Canada to HHS.
In an effort to cut health care costs, Vermont enacted a law in 2018 instructing state officials to seek approval from the federal government for a drug importation program with Canada.
Since then, state officials have been working on a plan to submit to HHS. In a letter to Azar on Aug. 13, Scott wrote that he hopes to discuss Vermont’s “plans and how the Administration’s approach might impact them.”
The question is whether the state can implement a pilot program in Vermont before rulemaking on Canadian drug importation is completed at the federal level, according to Ena Backus, Vermont’s director of health care reform.
“That rulemaking process can and may take longer than Vermont needs to be ready for a possible program,” Backus told reporters at a briefing Thursday.
“And so we’d like to understand whether we could run a pilot program simultaneously with the rulemaking process,” she said.
Vermont’s Canadian drug importation plan was originally scheduled to be submitted to the federal government in July. But legislators and state officials decided to delay the submission another year so that they could work with other states crafting similar drug proposals — including Colorado and Florida — and approach the federal government together.
In response to questions from reporters about double-digit health insurance rate increases state regulators approved last week, Scott said that state needs to take many steps to reduce health care costs, and pointed to the drug importation plan.
The governor said he hopes to work with the federal government on the pilot program.
“We want to be part of whatever they put forward and we’d like to expedite it as fast as possible,” Scott told reporters this week.
In a news release Wednesday, former education secretary Rebecca Holcombe, a Democrat running for governor, said that Scott has not adequately addressed the rising costs of health care or moved fast enough to implement drug importation.
“Every day we delay this important work is another day of prescription drug inflation for Vermonters,” Holcombe said.
Before they submit their plan to the federal government, state officials say they need to know more about how the program would save money for consumers.
An early, limited analysis by the state Agency of Human Services published in January found importing drugs would mean possible savings of $1 million to $5 million for the companies that offer insurance through the state’s health exchange: Blue Cross Blue Shield of Vermont and MVP Health Care.
AHS has also yet to seek a source of drugs in Canada that would be willing to export them to Vermont.
“I think there are unanswered questions about finding a partner in Canada as well that would be willing to do this,” said Martha Maksym, the interim AHS secretary.
But Maksym said now that the federal government has signaled it is open to Canadian drug importation, the odds of a successful program in Vermont have increased.
“I think there’s actually a pathway that has now been articulated for states to try this,” Maksym said. “I think that without the federal partnership we really haven’t had a way to implement a program in a particular state.”
The federal government is also considering an alternate pathway to importing drugs that would allow drug manufacturers to bring pharmaceuticals they sell in foreign countries at lower prices back into the U.S.
But they haven’t decided whether they will pursue that strategy over the plan that encourages states to import drugs on their own.
