According to the GoodRx Research Team, 832 brand drugs have increased by an average of 4.5% since December 31, 2020. Americans pay around $1,200 for prescription drugs a year. The continuing rise of prescription drug prices has a significant impact on many Americans, especially during a global pandemic. In the latest PawnGuru poll, about 20% of respondents say they are currently paying more than $100 a month out of pocket for their prescription. As a result, the importation of drugs into the U.S from Canada has emerged as a potential policy solution for politicians seeking to lower prescription drug prices. However, advocates and policymakers are not discussing the risks of allowing prescription medications to be imported from abroad.
The risk of exposing dangerous products to the U.S. pharmaceutical system and risking consumers’ trust is too great of a threat to take for uncertain or negligible savings. In 2017, four FDA commissioners signed a joint letter arguing against the importation of prescription drugs because of concerns about the ability of HHS to assure the safety of drugs imported from other countries. Hindering consumers’ trust in the U.S pharmaceutical system will impact demand and cost lives. The Pharmaceutical Access Act of 2003 (H.R. 2427) has allowed drug importation since 2003, but only if the Secretary of the Department of Health and Human Services certified it as safe. Although the Trump Administration was the only administration to authorize the importation of prescription drugs, previous administrations have rejected such policy due to safety concerns. Moreover, the benefits of drug importation are not guaranteed.
According to former Secretary of the Department of Health and Human Services (HHS) Alex Azar, “HHS is unable to make any estimates about savings because it doesn’t know which drugs will be imported.” In addition, 90 percent of U.S. drug sales already cost about the same or even less in the United States than in other developed countries, including Canada. The solution, then, lies not in making more drugs available but in reforming the market to prevent cost inflation.
Quality matters, and the U.S. has a standard of quality that consumers trust and rely on. The U.S. Food and Drug Administration (FDA) has gained the public’s trust by protecting consumers’ prescription drug supply from counterfeits. Trust in the FDA is about 75%, and in a time of a global pandemic, public trust in such an institution is critical in getting the country back on track. Importing drugs from other countries will create a potential for manufacturers that are not FDA-approved to infiltrate the U.S. pharmaceutical system. The U.S. has a strict distribution network that regulates the flow of prescription drugs in the country. As a result, the U.S. has some of the safest prescription drugs in the world, and opening the market up would compromise this trust.
Canada would also be unable to satisfy America’s demand for prescription drugs. Canada’s supply is not enough for America’s demands. Canada represents 2 percent of the global pharmaceutical consumption, compared to the U.S.’s 44 percent. Researchers at the University of Texas, Austin estimate that if just 20 percent of American brand-name prescriptions were filled in Canada, that country would run out of drugs in 201 days. The Canadian government has also voiced its concerns, notifying HHS that “the country does not have enough drugs to spare and that importation of drugs from Canada would only worsen shortages of medicines.”
Advocates of importing drugs will argue in favor of creating a system like the FDA to monitor and control imported drugs. But creating such a system will require significant financial support. An analysis of Vermont’s importation proposal warned that the cost of implementing an importation program would outweigh the savings. The cost of sustaining such financial support will eventually fall back on the shoulders of consumers and erase any cost reduction from importation.
Every administration except the Trump Administration has chosen consumer safety over the uncertainty of prescription savings. The American people deserve a prescription drug supply free from counterfeiters and adulterated drugs that will endanger patients and hinder public trust in our system. Even if the FDA could regulate and control imported drugs from Canada, there is no guarantee that consumer savings will follow due to the cost of maintaining such a program and Canada’s ability to meet demand.
The risks associated with importing drugs into the U.S outweigh the uncertain benefits.
This piece is available in The Economic Standard.