On Thursday, Colorado joined a growing number of states that want to cut certain prescription drug prices by importing licensed drugs from Canada.
The idea is central to Democratic Gov. Jared Polis’ campaign to rein in health care costs for Coloradans, many of whom, especially in sparsely populated rural and mountain regions, pay some of the nation’s highest insurance premiums.
The Senate Health & Human Services Committee advanced a bill that would direct the Department of Health Care Policy and Financing to design a program to import prescription drugs from licensed Canadian suppliers and distribute them to Colorado pharmacies and hospitals.
Advocates say U.S. consumers pay twice what Canadian consumers pay for patented prescription drugs.
The bill would determine which high-cost prescription drugs to include; how to test for quality and safety; and ensure providers and insurers charge consumers accordingly. If approved, imports could start in 2021.
The bill’s Democratic sponsors, Sens. Joann Ginal and Robert Rodriguez and Rep. Sonya Jaquez Lewis, suggest the program could be paid for with state fees on imports.
“This is not a personal, unregulated import program where individuals use mail-order websites,” Ginal said. “This is a program where the state takes on the responsibility to act as a wholesale importer.”
Republican Sens. Jim Smallwood and Larry Crowder urged caution in proceeding with the $1.3 million design study. Smallwood cast the lone “no” vote on the bill, which was sent to the Appropriations Committee.
Among other concerns, Smallwood asked whether Colorado could deliver substantial cost savings for Medicaid enrollees and the privately insured. He also sought to ensure lawmakers had a greater voice once the program analysis is completed. Majority Democrats rejected that motion.
Crowder was wary of government intervention in the market.
“The whole purpose of this is to look for competition,” replied Paul Ritzma, legal director at the health care department.
Lawmakers outside Colorado are pursuing similar strategies. But U.S. law requires federal approval of any state import plan, including one adopted by Vermont in 2018. No approvals have been issued.
Lawmakers in Connecticut, Indiana, Missouri, Oklahoma, Oregon, West Virginia and Wisconsin currently are considering Canadian import programs, according to the National Academy for State Health Policy, a nonpartisan forum for state governments.
In Washington, D.C., U.S. Rep. Elijah Cummings of Maryland, chair of the House Oversight and Reform Committee, led hearings this week on U.S. drug industry pricing practices. Cummings supports legislation to allow consumers to import lower-cost medications from Canada.
Cummings and other industry critics say pharmaceutical firms’ objections to imports are motivated by profit, not safety.
In July, U.S. Health and Human Services Secretary Alex Azar asked the Food and Drug Administration to examine how to safely import prescription drugs in the event of a dramatic price hike for a drug produced by one manufacturer that is not protected by patents or other rights.
But Azar insists that the import question is subject to the FDA’s “gold standard” for safety and effectiveness.
The Pharmaceutical Research and Manufacturers of America, an industry association, says state import schemes would inherently be unsafe for lack of FDA scrutiny. The group argues counterfeit and adulterated drugs could be introduced under any import scheme.
“This proposal jeopardizes the integrity of the closed U.S. prescription drug supply chain and the safety of American patients,” Priscilla VanderVeer, an association spokeswoman, said Thursday.
Bill opponents included the Colorado Competitive Council and the Colorado Chamber of Commerce, whose members include the industry association and U.S. pharmaceutical firms. The nonprofit Colorado Consumer Health Initiative, which has defended the federal Affordable Care Act and Medicaid expansion, supported it.