What to Know About the FDA’s Recent Decision to Allow Florida to Import Prescription Drugs from Canada
On January 5, 2024, the FDA authorized the state of Florida to import certain prescription drugs from Canada, an approach designed to give Floridians access to lower drug prices paid by people in Canada. This announcement has received a great deal of attention because it is the first time the FDA has granted authority for a state to safely import prescription drugs from another country. KFF polling has consistently shown that high prescription drug costs are a concern for the American public, with strong bipartisan support for several proposals to make medications more affordable, including allowing the importation of drugs from Canada. However, Florida must now take additional steps before the FDA will allow any drugs to be imported, and could face other obstacles to implementation, meaning Floridians may not see the benefits of these efforts for some time to come.
How did the FDA’s decision come about and what did the FDA authorize Florida to do?
Policymakers from both parties at both the federal and state levels have talked about importation of prescription drugs from other countries as a strategy to lower drug prices for many years. The door to Florida’s new state importation program was opened by a 2020 final rule creating this new pathway to import drugs from Canada and was reinforced by a 2021 executive order from the Biden Administration directing the FDA to work with states to import prescription drugs from Canada. Florida Governor and GOP presidential candidate Ron DeSantis and his administration have been seeking to gain approval to implement an importation plan for over three years.
The FDA has now authorized Florida’s drug importation program from Canada for a period of two years, stating that it met the requirements that importation would provide savings to consumers without sacrificing health and safety. According to the state’s January 5, 2024 press release, this program will save Florida up to $183 million in the first year of implementation, and based on Florida’s October 20, 2023 estimate of cost savings, these savings will accrue to the state’s Medicaid program. Whether any Floridians will pay lower out-of-pocket costs on imported drugs is unclear.
What are the obstacles to implementation?
Even with FDA approval, Florida will need to meet additional requirements before the plan can be implemented and overcome other potential roadblocks. For example, before Florida is permitted to import any drugs from Canada, it will need to submit a pre-import request to the FDA for each drug they seek to import, and can only import that drug if the FDA approves that request. The state of Florida will also be required to conduct quality testing of the drugs and ensure that drug labels meet FDA standards.
It is also possible that the Canadian government may impose barriers for importation to the U.S. Canadian law limits the sale of drugs outside of Canada that could create or worsen supply issues for Canadians. In response to the recent FDA action, Health Canada recently released a statement saying, “the Government of Canada is taking all necessary action to safeguard the drug supply and ensure Canadians have access to the prescription drugs they need” and added, “bulk importation will not provide an effective solution to the problem of high drug prices in the U.S.”
Other interested parties, including the Pharmaceutical Research and Manufacturers of America (PhRMA), may also seek to prevent the plan from being implemented, and PhRMA has previously filed a lawsuit and citizen petition challenging the importation pathway. Soon after the FDA issued its response to Florida, PhRMA issued a statement saying that importation of drugs from Canada “poses a serious danger to public health.”
Will all Floridians benefit and which drugs will qualify?
Florida’s importation program is limited both in terms of who could be helped and which drugs could potentially be imported. Imported drugs will only be available for people receiving services through certain state agencies and government programs, including people covered under Medicaid, people served through county health departments, and others residing in certain state facilities. The program does not extend to people with other types of insurance, such as employer insurance, or the uninsured.
Drugs that Florida may initially import include those that treat HIV/AIDS, mental health conditions, and prostate cancer. But certain types of drugs are excluded, such as biological products (including insulin), which are often very expensive, and infused drugs.
What is the significance of the FDA’s approval?
The FDA’s approval of Florida’s importation plan represents a political victory for the state in its long-standing efforts to implement its program, but this victory may be more symbolic than real when it comes to the impact on drug prices overall for the state’s residents. The Biden Administration can also notch another policy win in the area of drug spending, on top of its other actions to lower prescription drug costs included in the Inflation Reduction Act of 2022. Among the drug pricing provisions in this law are a cap on insulin copays under Medicare, a cap on annual out-of-pocket costs for retail prescriptions under Medicare Part D, and requiring the federal government to negotiate the price of some high-spending drugs under Medicare.
With states eager to adopt various approaches to tackle the problem of high drug prices, the FDA’s green light to Florida for its importation program is likely to encourage other states to make similar moves in this direction. But Florida’s importation program still faces obstacles before it can be implemented, and even then, its reach and impact may be somewhat limited, meaning that the issue of high drug prices is likely to remain top of mind for the public.