This month Vermont became the first state to allow the importation of less expensive drugs from Canada, but local critics say the move has no chance of federal approval, and could lead to a dangerous flood of counterfeit medicines.
On May 16, Gov. Phil Scott signed a bill permitting importation of prescription drugs into the U.S. at a lower cost than domestic counterparts. State lawmakers touted the measure as a way to counter skyrocketing drug prices.
But critics argue the new law will have unexpected negative consequences. Reimporting drugs, they say, opens a door for unsafe counterfeits, undermines domestic drug sales and will force U.S. drug makers to raise prices to cover billion-dollar research and development costs.
The idea also requires certification from the federal government, which many experts see as unlikely under the Trump administration.
“The program can’t function without federal approval, and the government is not going to now suddenly change its stance and allow Vermont to reimport prescription drugs from abroad,” said Meg Hansen, executive director of Vermonters for Health Care Freedom.
According to Hansen, the new law does not address the regulatory burdens or middlemen sales that inflate prices, and it undercuts the use of cheaper generic drugs as a means to drive down prices.
The FDA human effectiveness testing and approval process for a single drug takes up to 14 years and costs an applicant about $2.6 billion. The need to recoup that money is a main driver of sky-high drug costs. Profits made off drugs bought in the states must be funneled back into the research and development of other potential drugs.
“That’s how the cycle goes,” Hansen said. “If profits are being lost, then prices will be raised to make up for those lost funds that would then be invested into the research and development.”
Hansen said lawmakers mean well, because pharmaceutical drug prices are unaffordable and need to be addressed. But passing “backdoor” legislation is not the way to accomplish anything.
The idea of reimporting drugs into the U.S. from Canada has been pushed by Sen. Bernie Sanders, I-Vt., for decades.
In 1999, while still a U.S. congressman, Sanders traveled across the Canadian border into Quebec with a busload of Vermonters to get prescriptions from Canadian doctors and to buy the drugs at the lower Canadian cost.
“This is a gimmick that he did,” Hansen said. “He [also] tried to introduce a law into the Senate last year. They know it’s not going into effect, but it’s a talking point. It’s a narrative saying ‘hey, I care about Vermonters. I care about prescription drugs.’”
Food and Drug Administration Commissioner Scott Gottlieb and four of his most recent commissioners have warned against importation of drugs from other countries. Their main concern is the risk that patients would be exposed to phony, substandard or contaminated medicines.
Hansen says this is due to large-scale counterfeit organizations that tamper with logistics processes and inject fake drugs into the distribution system.
“It’s a recipe for disaster — we don’t know what’s coming in,” Hansen said. “The FDA has no way of ensuring safety and security of what drugs are coming in.”
Bob Orleck, a retired pharmacist and lawyer from Randolph, Vt., said when government gets involved in a program it tends to “screw it up.” The solution to high drug prices is to open up the free market.
“Businesses and the drug industry are a lot smarter than government officials, so they’ll find a way in order to capitalize on whatever they do,” he said.
Orleck, who was a pharmacist for about 45 years, said he saw drug prices skyrocket during that time. He said pharmacists used to be able to sell drugs at a reasonable cost and still be able to turn a profit off it.
“When a drug company would run into a price increase … they would actually write a letter to all the pharmacists and say they apologize because the cost of X ingredient increased, and they would be increasing their product by that amount,” Orleck said.
He said as time went on, price increases came more frequently, to the point where there was a 1 percent price raise across the board. Eventually, he said, they stopped notifying about price increases.
“There was a time when drugs were very reasonable. I think that was also a time where government was not involved, except in making decisions whether a company had proven if their drug was safe and effective,” Orleck said.
Orleck added that he’s not carrying water for the industry, but simply noted the way drug prices changed during his career.
“I’m not a fan of big pharma in any way. I believe as soon as they get the opportunity they’ll even probably try to capitalize on cannabis as best they can, just because they can,” he said. “It’s all about money.”
He added that with the technology that’s available today, the threat of counterfeit drugs being imported into the country are real and could potentially threaten public health.
“If you just keep government out of the picture — and if there are rules and regulations that are hindering the way different companies can compete in the market, and that would include even purchasing from Canada — I would think it’d be a whole lot better off,” Orleck said. “When free enterprise is allowed to work in its purest form and there’s competition, that keeps the prices low.”
Briana Bocelli is a freelance reporter for True North Reports.