Tag Archives: drug makers

Trump administration opens door to importing medicine from Canada

A pharmacist counts pills in a pharmacy in Toronto in this January 31, 2008 file photo. REUTERS/Mark Blinch/Files

By Michael Erman

(Reuters) – The Trump administration took a first step on Wednesday toward allowing the importation of medicines from Canada, an action the president has advocated as a way to bring cheaper prescription drugs to Americans.

The U.S. Department of Health and Human Services said it and the Food and Drug Administration will propose a rule that will allow it to authorize states and other groups to pursue pilot projects related to importing drugs from Canada.

The agency also said that it would allow drugmakers to bring drugs that they sell more cheaply in foreign countries into the United States for sale here, potentially enabling them to sell below their contracted prices in the U.S.

Drug industry shares were lower slightly, with the NYSE Arca Pharmaceutical Index <.DRG> off 0.25 percent versus a broader flat market. Wall Street analysts said importation was far from being put into place and was limited to certain drugs from Canada.

Health and Human Services Secretary Alex Azar said he has had prior discussion with Canada about importation and that it would be up to the states, pharmacies and distributors to address any hurdles.

“There are hurdles of course, but the hurdles now are known. They are being laid out and they are surmountable,” he said during a call with reporters.

Canadian officials were not immediately available for comment. Reuters has previously reported that Canada opposes any U.S. plans to buy Canadian prescription drugs that might threaten the country’s drug supply or raise costs for its own citizens.

Many drug purchase agreements in Canada forbid the re-export of drugs to other countries, according to a Canadian government memo obtained by Reuters.

“Given the size of the U.S. market and of large states such as Florida, which alone is two-thirds of the population of Canada, reliance on imports from Canada would have limited viability as a long term solution to the high cost of drugs in the U.S.,” Health Canada said in a statement on July 17.

Evercore ISI analysts Ross Muken and Michael Newshel said in a research note that any implementation is still far away given the technical steps of rulemaking and that the proposals will face challenges. For instance, he said, most Republicans in Congress oppose importation.

The first part of the proposal would allow states, wholesalers or pharmacists to submit plans for pilot projects for Canadian drugs if their raw materials are manufactured in the same plant as the U.S. version and are in line with the FDA’s approval. It would exclude biologics, infused drugs, injected drugs, inhaled drugs for surgery and certain parenteral drugs.

The Trump Administration has experienced several recent failures in its efforts to bring down drug prices. Its plans to make drugmakers disclose prices in TV ads had to be thrown out after it lost a legal battle with drugmakers, and it abandoned efforts to force pharmacy benefit managers to pass discounts onto Medicare recipients.

Drug pricing is an important election issue for Trump and also for Democrats, many of whom have said they would support importing medicines to lower U.S. drug prices. Pharmaceutical companies have opposed importing medicine.

(Reporting by Manas Mishra in Bengaluru; Michael Erman and Caroline Humer in New York and Allison Martell in Toronto; Editing by Steve Orlofsky)

U.S. health secretary says agency has power to eliminate drug rebates

U.S. Health and Human Services Secretary Alex Azar listens to U.S. White House Press Secretary Sarah Huckabee Sanders introduce him during the daily briefing at the White House in Washington, U.S., May 11, 2018. REUTERS/Leah Millis

By Yasmeen Abutaleb

WASHINGTON (Reuters) – U.S. Health and Human Services Secretary Alex Azar said it was within his agency’s power to eliminate rebates on prescription drug purchases, a key element of the Trump administration’s plan to lower prescription medicine costs.

Such rebates are negotiated in the United States by pharmacy benefits managers (PBMs) to lower the cost of medicines for their clients, including large employers and health plans that cover tens of millions of Americans.

Drugmakers say they are under pressure to provide rebates to the few PBMs that dominate the market and that those payers do not pass on enough of those savings to patients – a contention the PBMs dispute. The drugmakers say the rebates force them to raise the price of their therapies over time to preserve their business.

The Trump administration has been receptive to that argument. Azar, in an interview with Reuters on Friday, said rebates created a perverse incentive to continuously raise drug prices.

Azar, a former top executive at drugmaker Eli Lilly Co, is trying to deliver on President Donald Trump’s promises to lower the cost of prescription drugs for Americans, which Trump made a major priority during his 2016 presidential campaign.

The Department of Health and Human Services last month proposed regulations that would scale back protections for rebates that might otherwise be illegal under a federal anti-kickback law.

The PBM industry has challenged that move, saying HHS cannot eliminate rebates on its own and would need Congress to change the federal statute. The ultimate responsibility for high drug prices, those companies say, lies with the manufacturers who set those prices.

Azar contends that the current rebates are a product of previous HHS regulation. “What one has created by regulation, one could address by regulation,” he added.

He did not say when such new regulations, which are being reviewed by the Office of Management and Budget, might take effect. “The question of rebates may very well be fundamental to the issue of how you reverse these constant incentives to higher list prices (for medicines).”

CAMPAIGN ISSUE

The cost of healthcare, and prescription drugs specifically, is expected to be a major campaign issue ahead of November elections, in which Democrats are seeking to take control of the U.S. House of Representatives and Senate from Trump’s Republicans.

In May, Trump unveiled a “blueprint” comprising dozens of proposed policies to give the government greater leverage over drug prices but did not support changes to give the federal government’s Medicare health plan for seniors direct negotiating power with drugmakers. Critics say that has spared the pharmaceutical industry any real challenge to its pricing practices.

Azar defended the administration’s actions, noting that more than a dozen leading drugmakers, including Pfizer Inc, Merck Co and Celgene Corp, had pledged to hold off on further price increases this year.

“They are seeing where this is going, they are seeing that we are ticking off the blueprint items one by one,” Azar said. “We are not dependent on the voluntary action of pharmaceutical companies. We are not counting on their goodwill or their altruism. … They’re just changing because they see that’s the future.”

Critics say the drug price pledges by major drugmakers are largely window dressing.

Since May, HHS has given Medicare Advantage health plans, which are administered by private-sector health insurers, new tools to lower prescription drug costs.

The agency’s Food and Drug Administration has unveiled a plan to boost the use of biosimilars, which are cheaper versions of expensive biotech medicines. Azar has directed the FDA to establish a working group to study how to import drugs safely from other countries if a drugmaker dramatically raises prices.

The actions have already sparked concerns. Last week, a leading group of rheumatologists met with Azar to discuss changes to Medicare Advantage that could force some patients to try a less effective, cheaper medication for a period of time before their health plan would cover a more expensive therapy.

HHS said Azar emphasized the agency’s interest in lowering drug prices but expressed openness to alleviating burdens that could be placed on physicians as a result of the new rule.

Azar said he spoke with Trump every few days, either in person or over the phone and that in every conversation, the president wanted to hear about progress on lowering prescription medicine costs.

“I have never once had a meeting or phone call with the president where we have not talked about drug pricing,” Azar said.

(Reporting by Yasmeen Abutaleb; Editing by Michele Gershberg and Peter Cooney)