Americans for Tax Reform President Grover Norquist has released a letter to FDA Commissioner Stephen Hahn urging him to withdraw a proposal that would allow the U.S. to import prescription drugs from Canada.
[Read the full letter here]
Importation proposals do not address the root cause of high prices, and it is unclear whether this proposal will result in any meaningful savings to consumers or increase access to medicines.
Canada does not have the scale to successfully import drugs to the U.S. As the letter notes:
Canada is roughly one-tenth the size of the U.S. with a population of 37.5 million and an economy of $1.7 trillion. By comparison, the U.S. has a population of 327 million and an economy of $20.5 trillion.
Given the disparity in size between the two countries, Canada does not have the scale to effectively import drugs to the U.S. In fact, this proposal may destabilize the Canadian supply chain, a concern raised publicly by Canadian officials.
Even if Canada had the scale to import prescription drugs to the U.S., many innovative medicines that are available to U.S. consumers could not be imported because they are not available in the Canadian market. As the letter notes:
Of the 290 new medical substances were launched across the world between 2011 and 2018, the U.S. had access to 90 percent of these cures, far exceeding other markets. Canada has access to just 44 percent of cures, but it is far from an outlier. The United Kingdom had 60 percent of medicines, Japan had 50 percent, and Ireland had just 40 percent.
It is unclear whether or not there will be savings from importation. The non-partisan Congressional Budget Office (CBO) has previously estimated that importing drugs from Canada would have a “negligible reduction in drug spending.”
There are also long-standing concerns that importation will flood the U.S. market with unsafe, unvetted drugs. Every single FDA Commissioner and HHS Secretary over the past two decades have raise concerns about importation and declined to vouch for its safety.
Current HHS Secretary Alex Azar is no exception –– in 2018, he called the proposal a “gimmick” and labeled importation as “open borders for unsafe drugs in search of savings that can’t be safely achieved.”
Finally, importing Canadian drugs is not a free trade measure –– it will import price controls. As the letter notes:
Free trade means a level playing field where prices are set by the market with no tariffs, barriers, or price controls. Drug importation is the opposite of free trade because foreign countries frequently utilize a range of arbitrary and market-distorting policies to determine the cost of medicines – by definition such approaches are price controls.
Proposals to import Canadian medicines into the U.S. should be opposed. Canada does not have the scale to import drugs to the U.S., the Canadian drug market has far less access to medicine than the American market, the proposal would likely not generate consumer savings, and it would import foreign price controls into the U.S.
Read the full letter here.