The Department of Health and Human Services has announced an action plan to allow the importation of prescription drugs.
This plan would create two pathways for importation: 1) a forthcoming rule that would allow pilot projects to import drugs from Canada, and 2) guidance allowing manufacturers to import versions of their FDA approved drugs sold in foreign markets.
While there are significant details of this plan to be determined, this proposal is concerning and could have significant negative consequences to the U.S. healthcare system.
Importation is not free trade because there is no level playing field. Instead, it results in the importation of socialist, market distorting price controls. Importation proposals do not address the root cause of high prices, will allow unvetted, potentially dangerous medicines into the U.S. and will harm American innovation.
Importation Has Long Been Championed by the Far-Left: Importation will allow drugs from countries with socialized medicine. This policy has long been supported by U.S. Senator Bernie Sanders and opposed by proponents of free markets and limited government.
While importation may sound like a reasonable free market solution, it is actually a clever ploy to trick proponents of limited government into supporting socialist policies that would jeopardize the development of the next generation of life-saving, life-improving medicines.
Importation is Not the Solution to High Prices: It is entirely unclear whether importation will reduce healthcare spending as noted by the Congressional Budget Office.
Importation is not a free trade measure because there is not a free market. The U.S. represents one-third of the market for medicines in the developed world, but pays for as much as 70 percent of the costs, according to the President’s Council for Economic Advisors.
This disparity exists because foreign countries freeload off American innovation. They have lower prices because they impose heavy handed government price controls and other regulations. This limits access to medicines and suppresses innovation.
This is not hypothetical – of the 290 new medical substances that were launched worldwide between 2011 and 2018, the U.S. had access to 90 percent. By contrast, the United Kingdom had 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent. The reference pricing policies used in Europe delay new drugs coming to market by an average of 14 months, according to one study.
Importation Schemes Are Potentially Dangerous to Consumers: While the administration says their importation plan will be safe, the FDA has long expressed concern over allowing the importation of medicines. Agency officials have repeatedly stated there is no way to assure the safety, authenticity, or effectiveness of imported drugs, or whether the drugs are from the country the packaging claims it to be.
Attempting to construct such a system would be a bureaucratic nightmare and will be incredibly costly to taxpayers. This is not a partisan issue — every single Commissioner of the FDA and every HHS Secretary in the past 18 years has acknowledged allowing importation of price-controlled medicines is dangerous.
Importation Would Threaten the U.S. Role as a Leader of Medical Innovation: The U.S. is a leader in medical development with more than half of pharmaceutical / biotech research being conducted in this country.
This research supports numerous high paying jobs, leading to a stronger economy. Conversely, creating barriers to innovation will threaten these jobs and hurt the economy.
Currently, it costs more than $2.6 billion and takes 10 – 12 years to develop a drug, conduct clinical trials, and obtain Food and Drug Administration (FDA) approval for each drug that makes it onto the market.
This innovation directly benefits the U.S. in the form of high-paying jobs, a stronger economy, R&D, and access to more life-saving medicines.