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This from The Washington Post, wherever you listen. I

1:00

support a limited number of

1:02

prescription drugs from Canada. Daniel

1:06

Gilbert covers the business of medicine for The

1:08

Post. He says this decision

1:10

from the Food and Drug Administration is

1:12

part of a bigger push to bring

1:14

down drug prices for everything

1:17

from cancer to mental health conditions.

1:20

The idea of importing drugs much

1:23

less expensively from Canada

1:25

has animated politicians

1:28

and regular

1:30

American consumers for a couple of

1:32

decades now. This decision

1:34

by FDA for

1:36

the first time creates a pathway

1:39

for states to actually buy

1:41

prescription drugs in bulk from Canada that could

1:43

be a potentially very significant cost savings for

1:46

them. But

1:48

if other states get a green light to

1:50

buy medicine from Canada, that country

1:52

could risk running out of its own

1:54

supplies. So it's really not

1:56

clear what will happen if those two things

1:58

collide. From

2:04

the newsroom of the Washington Post, this

2:06

is Post Reports. I'm

2:08

Elahe Izadi. It's Monday,

2:10

January 8th. Today, Daniel

2:12

explains why, for the first time,

2:15

a U.S. state can

2:17

import cheaper medicine from Canada, and

2:19

whether this could change the cost of

2:21

medicine throughout the U.S. Just

2:36

really briefly, one of the

2:38

reasons I think this is catching a lot

2:40

of people's attention is because how much drugs

2:42

cost in the United States, right? Is

2:44

that true? Do they cost a lot in the United States? They

2:47

do, yeah. I mean, it may

2:50

not be a surprise to a lot of

2:52

people that prescription drugs are expensive here, but

2:54

it's actually pretty well documented that drug

2:57

prices in the U.S. are significantly

2:59

higher than in most developed countries

3:02

around the world. There's

3:04

a widely cited study by Rand Corporation from

3:06

2021 that found that Canada's drugs on the

3:10

whole cost about half of what prescription

3:12

drugs in the U.S. cost. And

3:15

what we're really talking about here

3:17

are brand name drugs. The

3:20

brand name drugs are really expensive relative to

3:22

other countries. Daniel, I want

3:24

to understand how we got to this decision

3:26

from the Food and Drug Administration. So

3:29

first, where does this story begin? So

3:33

it goes back to, I would

3:35

say, like the year 2000 as

3:38

a good place to begin. There was a

3:40

law that was enacted that would have allowed

3:42

states to import prescription drugs from other countries,

3:45

but it never really got off

3:47

the ground because of a requirement

3:49

that the Secretary of

3:51

Health and Human Services would

3:53

have to certify that adequate

3:56

safety could be maintained and that... The

4:00

costs of prescription drugs

4:02

could significantly be reduced. And

4:05

there were several secretaries that declined to

4:08

make that determination. And

4:10

so it wasn't until the Trump administration. Thank

4:12

you very much. This is

4:14

a very big announcement.

4:17

Here's been President Trump in 2020. The

4:20

unprecedented reforms we're completing

4:22

today are the direct

4:24

result of the historic drug pricing

4:26

executive orders I signed in July.

4:29

President Trump signed an executive

4:31

order basically saying, ordering

4:35

the completion of a rulemaking process that would

4:37

allow a process for the states to import

4:39

certain prescription drugs from Canada.

4:43

Statutorily, we had to go through a

4:45

very long process. And we got

4:47

it done. I was very proud to have gotten this done.

4:49

We were pushing it very hard. So

4:56

is that where Florida comes into the

4:58

picture? That is where Florida

5:00

comes into picture. That was when Florida

5:02

formally applied to be able to import

5:04

drugs from Canada. After the federal government

5:07

finalized their rule, we submitted

5:09

our Section 804 proposal. This is DeSantis

5:11

in 2021. And when I

5:13

signed the bill, I told people, this is the

5:15

first step. There's a lot of hurdles that you

5:17

have to overcome. But we've been doing

5:20

it every step of the way. And

5:22

after that, there's a 2021

5:25

executive order by President Biden that's

5:27

directing FDA to work with states

5:29

like Florida that wanted to import prescription

5:32

drugs. And at least

5:34

from Florida's perspective, the process did

5:36

not move very quickly. FDA

5:39

had additional questions about Florida's plan.

5:41

Florida would have questions about FDA's

5:44

requests. So there was

5:46

a lot of back and forth. And then it got to

5:49

the point where Florida sued FDA in

5:51

2022 to try to force it to

5:53

rule on its application. And

5:55

this is DeSantis in late 2022. After

5:58

630 days. You know,

6:01

we still sit here waiting for an answer.

6:03

And so it's our view that we've waited

6:05

long enough. And so today

6:07

we're taking action. The state

6:09

of Florida has now filed a

6:11

lawsuit against the FDA. For

6:14

Florida Governor Ron DeSantis, the

6:17

FDA was delaying in an unreasonable

6:19

and reckless way. And

6:21

looking in some of the court filings, you can

6:24

see that some of the

6:26

FDA's concerns are about drug supply

6:28

chain security, cost savings, the

6:30

way that drugs would be labeled, as

6:32

well as some other things. And

6:34

then as of Friday, it looks like Florida finally

6:37

satisfied FDA. So Daniel,

6:39

this has to do with states buying

6:41

drugs, rather than a resident

6:43

in Florida wanting to buy medicine from

6:46

Canada, right? So tell me

6:48

why states are buying drugs and why would

6:50

they want to buy them directly from Canada?

6:53

Well, really for the same reason that people

6:55

want to buy drugs from Canada, and it's

6:57

to save money. And

6:59

medical tourism has been a thing for

7:02

a while. But

7:04

a state couldn't just take

7:07

a little trip across the border and bring back

7:09

some drugs. There wasn't any mechanism

7:11

for that. And so this proposal

7:13

from Florida is about

7:15

creating that mechanism so that

7:18

they can get certain prescription drugs in bulk, that

7:20

they would then be able to use for Floridians

7:23

initially in the care of

7:25

state-run facilities, and then eventually

7:27

to expand that to state Medicaid recipients.

7:30

I see. So with state, this might seem

7:32

obvious to you, but for me, I'm like,

7:34

oh, why is a state buying drugs? And

7:36

it's because they have these drugs in state-run

7:38

facilities and eventually Medicaid patients.

7:41

That that's what these bulk drugs would

7:43

be used for, right? Sure. Daniel,

7:47

what are some drugs that

7:50

and the types of treatment that they offer that

7:52

the price could drop

7:54

for Floridians? So what the

7:56

state of Florida hasn't publicly said, specific

7:59

drugs? But what they've generally described

8:01

is seeking drugs that

8:03

would treat conditions like mental

8:05

health, HIV,

8:08

AIDS, prostate cancer,

8:11

some common conditions. So

8:13

why are drugs cheaper in Canada?

8:15

What makes Canada different? Canada

8:18

is different because Canada has done the

8:20

work to regulate prices of prescription drugs

8:22

lower. There's a board

8:24

that regulates the price of brand name

8:27

patented drugs in Canada to determine whether

8:29

the prices are excessive. And

8:32

if it does determine they're excessive, can actually order a manufacturer

8:34

to lower the price of a drug. The

8:36

U.S. doesn't have that. In

8:38

the U.S., the manufacturer, the patent holder of

8:41

the drug gets to charge

8:43

what they want to charge, what they

8:45

think the market will bear, until they

8:47

lose the exclusivity of their patents and

8:50

then generic drug makers

8:52

can offer cheaper alternatives, which brings

8:55

down the price. Why can't

8:57

the U.S. do something like Canada and

8:59

have a system that is like Canada?

9:01

What are some of the barriers to

9:03

that or the forces allied against that?

9:06

Okay, well, it's been a difficult proposition over

9:08

the years. The

9:11

pharmaceutical industry is not

9:14

thrilled about the various

9:17

proposals to lower prescription drug pricing

9:20

in the U.S. And

9:23

one of the arguments that the

9:25

pharmaceutical industry and some others like

9:27

patient advocacy groups make

9:30

is that developing new drugs

9:32

is extremely difficult. It's expensive,

9:34

it's risky, lots of drugs

9:36

fail, clinical trials

9:38

that the manufacturers pursue

9:41

to either prove or condemn

9:44

how the drugs work takes a lot of time, can

9:46

cost tens or hundreds of millions of dollars. And

9:49

so manufacturers

9:52

that are taking on this risk say they

9:54

need an incentive to get paid for their

9:56

innovation and the risk they're taking on. prescription

12:00

drugs, you can kind of see why that

12:03

would be a popular idea and

12:05

not particularly partisan one. This

12:08

has been an important issue that's come

12:10

up in campaigns over the years as a significant

12:12

part of Bernie Sanders'

12:14

presidential campaign. U.S. presidential

12:16

hopeful Bernie Sanders didn't hold

12:19

back when criticizing the pharmaceutical

12:21

industry. So you got greed,

12:23

you got corruption, and you got kids

12:26

not taking the medicine they need. On

12:29

his bus, insulin-seeking Americans had

12:31

story after story of struggling

12:33

with the cost of living

12:35

with diabetes. The

12:37

Trump administration comes in and Trump

12:40

signs an executive order. The Biden

12:42

administration comes in and Biden signs

12:45

an executive order to direct

12:47

the FDA to work with states to

12:49

make this happen. But

12:51

that struggle continues, by the way.

12:53

And certainly, like, the Biden administration

12:55

has prioritized this, like, seen this

12:57

as a really important

13:00

issue to try to

13:02

tamp down these rising

13:05

prescription drug prices. And

13:07

the biggest thing that they have done

13:09

is the Inflation Reduction Act. Yeah,

13:12

Daniel, can you tell me more about what

13:14

the Biden administration has done so far? Well,

13:18

the Biden administration continued in a

13:20

way what the Trump administration started

13:22

with an executive order directing FDA

13:25

to work with states that

13:27

wanted to import drugs from

13:30

Canada or abroad. The

13:32

Biden administration has also taken

13:35

on this more ambitiously, really,

13:38

than administrations in

13:40

recent memory in enacting the

13:42

Inflation Reduction Act. And

13:44

this is like a frontal effort

13:47

to directly lower drug prices in the

13:49

U.S. This is like the very thing

13:51

that they're trying to cure by importing

13:53

drugs from Canada. But

13:55

this is more of a head-on way of approaching

13:57

it and something more similar to what Canada has

13:59

done. done with setting maximum

14:01

prices. And so the

14:04

Inflation Reduction Act would cap how

14:06

much Medicare pays drug makers

14:08

for certain drugs that Medicare spends a lot

14:10

of money on. In October,

14:13

the administration announced the first 10 drugs

14:16

that will be subject to these maximum

14:19

prices. And today I'm proud to

14:21

announce that Medicare has selected the first

14:23

10 additional drugs for

14:25

negotiation under the Inflation Reduction Act. Here's

14:28

President Biden in late 2023. Medicare

14:31

spends $50 billion

14:33

a year on these 10

14:35

drugs. And American seniors

14:38

are spending $3.4 billion on

14:41

out-of-pocket costs. And

14:43

the idea with the Inflation

14:45

Reduction Act and this provision is

14:47

to add more drugs

14:49

that are subject to price caps over

14:52

time. But it's going to be quite a few

14:54

years before any

14:56

cost savings are really realized

14:58

from those efforts. And there's also litigation

15:00

from drug makers and

15:05

the pharmaceutical industry to try

15:08

to neutralize that effort too. So

15:18

Daniel, how has the pharmaceutical industry

15:21

responded to not just this ruling, but

15:23

all the pressure that

15:25

it has received to reduce costs? They've

15:29

responded with a pretty ferocious

15:33

legal attack. They

15:35

see this as risk to the business

15:37

in different ways. And

15:39

so there's been a

15:41

pretty organized forceful response from

15:44

the pharmaceutical industry to try to neutralize

15:47

the Inflation Reduction Act or

15:49

to try to prevent drug

15:52

importation from getting off the ground. In fact,

15:55

the Pharmaceutical Research and Manufacturers of America,

15:57

this is a big lobby.

16:00

called Pharma. It sued

16:02

FDA over the drug importation plan

16:04

and there was a judge who

16:07

ruled in February that the association

16:09

lacked standing because

16:12

they didn't face a concrete risk of

16:14

harm at that point. But

16:16

now that the FDA has given Florida

16:18

the green light, that

16:21

conceivably has made things more concrete so it

16:23

wouldn't be surprising to see more litigation going

16:26

forward. But there are other

16:28

ways that kind of

16:31

indicate that pharmaceutical companies

16:33

are acknowledging the public

16:35

pressure to lower drug

16:37

prices. And

16:39

so last year one of the things that

16:41

we saw was initially

16:44

Eli Lilly, a pharmaceutical

16:46

company in the US, slashed the

16:49

price of its influence. 70% capped

16:51

the cost of their insulin

16:54

at like $35 a month now.

16:58

And that was after a period of years where the price

17:00

of insulin had gone up and up. That

17:02

was an acknowledgement that there was a

17:04

need to lower those prices and that

17:06

was followed by the two

17:08

other big insulin

17:11

makers, Sanofi and

17:13

Novo Nordisk following suit and

17:16

also dramatically lowering the

17:18

cost of their insulin and those prices took

17:20

effect this month. So

17:23

Daniel, in addition to what

17:25

the pharmaceutical industry is doing to

17:27

push back against these efforts

17:30

and then also at the same time

17:32

some of these companies acknowledging the high

17:34

cost, when we talk about their

17:37

argument as to why the

17:39

FDA should not be

17:41

allowing the importation of medicines, what argument are

17:44

they making? Because I think the average person

17:46

would say, well are they just making

17:49

this argument because this is a threat

17:51

to their bottom line? What

17:55

is their argument that they're making? Today,

18:01

the US actually

18:04

does import a significant

18:06

amount of drugs from

18:08

foreign manufacturers. And

18:11

the process for that is that companies,

18:14

manufacturers around the world, notably

18:17

in India and China, they

18:19

will register with the FDA, say, we

18:22

are going to manufacture these drugs and

18:24

FDA will go and inspect

18:26

those facilities and make sure that

18:29

they meet all the

18:31

stringent requirements that FDA would require of

18:33

facilities in the US. So there already

18:35

is a process in which we get

18:38

a lot of drugs from

18:40

other countries. But

18:43

what is different here is

18:46

that states are

18:48

now kind of trying to take this process

18:50

in their own hands and find a foreign

18:53

seller, like a company in

18:56

Canada that will sell drugs

18:58

to Floridians. And

19:01

they have to find a logistics company that will

19:04

handle the importation and they have to

19:06

find a way to distribute all these drugs. And

19:08

there are various requirements they have to meet from

19:10

FDA. But the central

19:12

concern is if drugs

19:15

are entering the US delivery

19:17

system from another point that

19:20

maybe hasn't gone

19:22

through the same process as

19:26

FDA registered and inspected

19:28

manufacturers, there could

19:31

be some amount of risk

19:33

for unsafe drugs or counterfeit drugs

19:35

to enter the system. And that is one point that

19:38

the pharmaceutical industry has made. But it's also a

19:40

point that the FDA itself

19:42

has raised this concern to try to make sure

19:46

that the integrity of the drug

19:48

supply chain is protected and there's

19:50

no additional risk to Americans. So

19:53

in this case, what would Florida have to do to make sure

19:55

that these imported medications

19:57

that it's safe? There is

19:59

a lot. a long list of requirements that

20:02

Florida has to do, even

20:04

now, even after getting this approval

20:07

from FDA to actually

20:10

physically import these

20:12

drugs. And they have

20:14

to tell FDA like the

20:16

specific drugs that they are

20:18

attempting to import. They

20:21

have to be able to tell FDA

20:23

who made the raw ingredients used in

20:25

the drugs. They have to provide proof

20:28

of the Canadian company that's

20:31

selling them the drugs, obtain them from

20:33

the manufacturer, the batch numbers, lot numbers,

20:35

a description of how they will be

20:37

tested, who will do the testing. So

20:40

there's a lot, still like a lot of

20:43

information that Florida has to provide to FDA.

20:47

So this decision, do you

20:50

anticipate it benefiting other

20:52

states and patients anytime soon? What will

20:54

you be looking to in the future

20:57

on this issue? I

21:01

think it'll benefit other states in the

21:04

sense that it provides an example for how

21:06

this can be done. As

21:09

far as whether it'll benefit patients soon, that

21:12

depends on a few things. Depends

21:18

on Florida satisfying additional requirements

21:20

from FDA, prerequisites

21:22

to importing the drugs physically,

21:25

but also the

21:27

uncertainties about what kind

21:29

of curbs Canada might impose

21:31

on its domestic supply of medicines.

21:33

Canada's pretty concerned that

21:36

the US importing in bulk

21:38

from Canada could cause drug

21:40

shortages. And there could

21:43

also be legal challenges that might

21:45

delay this from moving forward. Thank

21:51

you so much for joining me today. Thank

21:54

you for having me. Daniel

22:01

Gilbert writes about the business of medicine for

22:03

The Post. That's it for

22:05

Post Reports. Thanks for listening.

22:08

Today's show was produced by Bishop Zant. It

22:11

was mixed by Reni Svinofsky and edited

22:14

by Monica Campbell. Thanks

22:16

to Alana Gordon and Sandhya Somashaker.

22:21

Before you go, I wanted to tell you about

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