How Would Importing Prescription Drugs From Other Countries Help People in Part D Plans?
Q: In the debate over lowering prescription drug prices, I see frequent mention of allowing importation of drugs from other countries. How would that work for people enrolled in Medicare Part D?
A: Drug prices in the U.S. are much higher than in other developed countries, because there are no federal laws regulating prices. In fact, the law specifically forbids Medicare from negotiating prices on behalf of its beneficiaries. Allowing the importation of prescription drugs from countries such as Canada, where drugs are less expensive, has the potential to lower drug costs for both U.S. consumers and the federal government.
The proposal would potentially help those enrolled in Medicare Part D and Medicare Advantage plans, particularly in cases where a drug is not covered by the individual’s plan or, as a less-expensive alternative, when the cost of importing a drug is lower than the co-pay for purchasing the medication with Part D plan coverage. Proponents of importation point out that, over the long-term, increased competition from imported drugs could pressure drug companies to reduce their prices in the U.S. and thus help reduce costs for other drugs you may take.
Some states have passed laws that would allow their state to import drugs from Canada. National Public Radio (NPR) recently reported that the state of Florida wants to establish a pilot program to buy medications from Canada in bulk. The state would contract with a wholesaler in Canada, who would provide certain high cost drugs that the state identifies. Patients in Florida who have a prescription for one of those drugs would just go to their pharmacy to pick up their medication.
But no matter how legislation would be structured, Canadian health experts are warning that the plan could accelerate drug shortages in Canada. Attempting to fill the U.S. consumers’ needs with pharmaceuticals from our smaller northern neighbor could not only drain supplies in Canada, but also drive up prices in that government-run health system, opponents say.
Although importing prescription drugs from Canada is illegal, a substantial portion of consumers in the U.S. already purchase lower-cost prescription drugs from Canada and other countries. A random sample survey of American adults in 2016 found that 8% of respondents said they or someone in their household had imported a drug at some point, which translates to about 19 million individuals.
Several bills to address this issue have gained traction in Congress and bill sponsors are trying to prevent problems by inserting language into the legislation that would bar drug companies from retaliating against Canadian pharmacies that sell medication to U.S. consumers at the lower Canadian prices. The Senior Citizens League supports the Affordable and Safe Prescription Drug Importation Act (H.R. 447, S.97). In 2017 the Congressional Budget Office estimated that a previous version of the bill would reduce the federal deficit by about $6.8 billion over the next ten years.
Sources: “Importation of Drugs into the United States From Canada,” Nigel S. B. Rawson, PhD, Louise Bender LLD, CMAJ, June 19, 2017 posted on the National Institute of Health website. “Florida Wants to Import Medicine From Canada. But How Would That Work?” Selena Simmons Duffin, NPR, June 18, 2019.