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Biden’s executive order targets drug pricing, healthcare costs and health insurance practices
Drug importation is back, following a hiatus as the Biden administration took over from the previous one, which had advanced a number of drug-pricing policy actions. It’s part of the president’s sweeping executive order, signed on July 9, offering a grab-bag of 72 initiatives across more than a dozen federal agencies and targeting dozens of different industries. For sure, it will create many long hours among K Street lobbyists in Washington.
Drug importation has been proposed for decades, but prior administrations have shelved their initiatives until now. Last September, HHS and FDA ramrodded a 179-page Final Rule on importation into force (some 1,200 comments on the proposed regulation were mostly ignored), expecting it to be adopted in 60 days. A lawsuit by PhRMA, the Partnership for Safe Medicines and the Council for Affordable Health Coverage was filed in November, but is yet to be resolved. The same three groups filed a citizen petition to FDA (a mechanism for reconsideration of FDA policy) and, just a few days before the White House announcement, the agency responded that “FDA has been unable to reach a decision on your petition because it raises complex issues requiring extensive review and analysis by agency officials. … We will respond to your petition as soon as we have reached a decision on your request.”
Now, following the Final Rule structure, individual states can set up an importation program, to be reviewed and monitored by FDA. Vermont, Colorado, Maine, New Hampshire and New Mexico have intended to file plans with FDA, and the leading state in this effort is Florida.
“With the issuance of this new executive order directing the FDA to work with states, I expect no further delay in the approval of Florida’s plan to import safe and effective prescription drugs,” said Gov. Ron DeSantis. “While big pharma and federal bureaucracy have continued to stand in the way, it’s past time Florida taxpayers realized savings on these drugs.”
The Florida program, at least initially, is intended for prescription drugs purchased under state programs—Medicaid and the state’s corrections department; DeSantis says it is expected to save $150 million per year. While an in-state vendor has been set up, it’s not clear that a Canadian source has been lined up yet (among other problems for the program, which has some discrepancies with the federal Final Rule).
That in-state vendor is Life Science Logistics (LSL), a growing third-party logistics provider for US pharma companies. LSL is now marketing a “build your own Canadian Prescription Drug Import Program” to states.
“The Biden Administration's executive order directing FDA to help states develop plans to import prescription drugs from Canada is dangerous,” said Shabbir Safdar, executive director of the Partnership for Safe Medicines, in a statement on Tuesday. “At a time when we’re seeing increasing counterfeit and adulterated medical devices, products, and treatments around the world, the administration wants to move forward with a flawed policy exacerbating the problem and put the lives of Americans at greater risk.”
In addition to the drug import program, the White House executive order also calls for enhancing the commercialization of generic drugs and biosimilars (here, it’s worth noting that no biologic drugs are to be included in the drug importation program as it currently stands), and for better transparency in hospital costs and health insurance programs.