Some states, including Texas, are seeking relief from rapidly rising prescription drug costs by pursuing new strategies to ease the burden on state budgets, including prescription drug importation. On January 5, 2024, Florida was the first state to receive approval from the federal Food and Drug Administration (FDA) to import certain prescription drugs from Canada at a lower cost than the drug’s U.S. counterpart. The approval comes three years after the state submitted an initial application to and entered into negotiations with the FDA.
Federal regulations allow states to develop drug importation programs within certain guidelines. All programs must be approved by the FDA and meet specific criteria related to drug safety, effectiveness, and labeling. Only Canadian drugs that have an FDA approved United States counterpart may be imported, allowing the FDA to directly compare drugs based on safety and effectiveness. As part of this process, states must establish a means to test imported drugs using the specified criteria, and then provide the test results to the FDA to confirm that each drug purchased from Canada meets the same safety and effectiveness standards as the approved U.S. counterpart.
In Texas, the 88th Legislature authorized a drug importation program through HB 25 by Talarico. Under HB 25, the Health and Human Services Commission (HHSC) must develop the program and submit the required application to the FDA. The bill specifies that HHSC must contract with one or more prescription drug wholesalers and Canadian suppliers to import prescription drugs and provide cost savings to consumers in Texas.
The bill allows prescription drugs to be imported to Texas only if they meet the FDA’s standards for drug safety, effectiveness, misbranding, and adulteration. The importation also may not violate any federal patent laws. Certain drugs may not be imported, including controlled substances, biological products, infused drugs, intravenously injected drugs, drugs that are inhaled during surgery, or parenteral drugs.
Supporters of HB 25 said that the bill would improve health outcomes by increasing the affordability of prescription drugs and that patient safety would not decrease because drugs imported from Canada would have to meet FDA safety and effectiveness standards. Given that many prescription drugs and their ingredients are already manufactured outside of the United States, they argued that importing drugs from Canada also would not create a significant safety risk.
Critics of HB 25 said that imported drugs are less safe than drugs manufactured in the United States due to differing regulations and that importing drugs would undermine confidence in the United States’ closed prescription drug system and high safety standards. Additionally, critics pointed to evidence that the Canadian government is opposed to exporting prescription drugs due to concerns that meeting increased demand in the United States could create limited supply in its own nation, and Canada has created restrictions that could make HB 25 ineffective. There were also concerns that importing drugs to Texas may not result in savings due to the cost of administering the program.
In December 2023, HHSC released a report with recommendations for next steps in implementing Texas’ prescription drug importation program, including working with experts to develop the application and reviewing additional resource needs.
As the first state to receive federal approval for a drug importation plan, Florida has implemented a program that targets 14 drugs considered to be the most costly for state health programs and treats chronic illnesses such as HIV/AIDS, mental illness, and prostate cancer. The state estimates that the plan will save the state $183 million in the first year of implementation and $196 million in the second year for drug costs attributed to the Medicaid program, state hospitals and clinics, and prisons.
Colorado, Maine, New Hampshire, New Mexico, North Dakota, Vermont, and Wisconsin have passed similar legislation authorizing drug importation programs.
By Chelsea Rose and Donna Steward
Interim News Briefs 