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Trump administration outlines plan to allow the US to import cheaper drugs from Canada

Key Points
  • States, wholesalers and pharmacists, acting as intermediaries for consumers, would draft a proposal for safe importation of prescription drugs already available in the U.S.
  • The U.S. pharmaceutical industry and regulators have argued importing drugs could threaten consumer safety.
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HHS Secretary Alex Azar on his plan to tackle high out-of-pocket drug costs

The Trump administration outlined on Wednesday a proposal that would allow the U.S. to legally import cheaper prescription drugs from Canada, a tactic the U.S. pharmaceutical industry and regulators have warned could threaten consumer safety.

Under the plan, states, wholesalers and pharmacists, acting as intermediaries for consumers, would draft a proposal for safe importation of prescription drugs already available in the U.S. The groups would then submit the proposal to the Food and Drug Administration for approval.

"President Trump has been clear: for too long American patients have been paying exorbitantly high prices for prescription drugs that are made available to other countries at lower prices, " Health and Human Services Secretary Alex Azar said in a statement. "Today's announcement outlines the pathways the administration intends to explore to allow safe importation of certain prescription drugs to lower prices and reduce out of pocket costs for American patients."

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Azar told CNBC on Tuesday that the Trump administration was working on a proposal that would allow the United States to import drugs from Canada, where prices are lower.

In most circumstances, it is illegal to import medications from other countries for personal use, according to the Food and Drug Administration. The pharma industry argues importing drugs could threaten consumer safety. It says importing drugs increases the potential for counterfeit or adulterated products. Supporters, including Democratic presidential hopeful Sen. Bernie Sanders, say the tactic would increase competition and substantially lower prices.

The Pharmaceutical Research and Manufacturers of America, or PhRMA, the industry's main trade group, in response to a request for comment said, "the administration's importation scheme is far too dangerous for American patients."

"There is no way to guarantee the safety of drugs that come into the country from outside the United States' gold-standard supply chain," PhRMA President and CEO Stephen J. Ubl said in a statement.

The Trump administration proposal would also force states, wholesalers and pharmacists to include conditions to ensure importing drugs doesn't pose an additional risk to the public's health and safety. They would also need to show the plans would achieve significant cost savings to American consumers.

The plan would also provide guidance to manufactures who seek to import into the U.S. versions of drugs they sell in foreign countries.

The announcement comes as Trump, who is seeking reelection, attempts to bring more transparency to drug prices and, ultimately, lower costs for consumers.

The Trump administration has had a few roadblocks in its attempt to lower drug costs. Earlier this month, the White House said it had withdrawn its plan to ban rebates that drugmakers pay to pharmacy benefit managers. That news came three days after a federal judge in Washington, D.C., dealt a blow to the administration by striking down a rule that would have forced pharmaceutical companies to disclose the list price of their drugs in television ads.

Last week, the White House said it is supporting a bill from Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore., the committee's ranking member.

If passed, that bill would make changes to Medicare, the federal government's health insurance plan for the elderly, by adding an out-of-pocket maximum for beneficiaries at $3,100 starting in 2022. It would also penalize pharmaceutical companies if the price of their drugs rise faster than inflation.

VIDEO7:5607:56
HHS Secretary Alex Azar on his plan to tackle high out-of-pocket drug costs