If a top-down, command and control approach sounds like a good idea, ask yourself why we don’t convene such “arbitration” panels to set the price for cars, houses or groceries? A price set by a government-established panel is not the way our free market system normally operates, where buyers and sellers are free to participate, or not, at willingly agreed to rates.
The Senate Finance Committee recently took the first step in ensuring greater transparency and accountability in our drug supply chain by investigating the business practices of pharmacy benefit managers (PBMs).
Ranking member Sen. Ron Wyden said in his opening statement: “What PBMs do to earn all those profits is a mystery.”
Numerous actuarial studies were conducted to analyze the potential impacts. The estimates vary significantly as a result of the broad range of assumptions about the likely behavioral responses from the affected stakeholders. The following are some key findings from those studies:
This rule will result in some degree of increased premiums for everyone, but notable out-of-pocket cost savings for some;
While around only 30 percent of beneficiaries will likely see net savings, their savings are expected to be so large that the overall beneficiary impact will be a net savings; and
Cost estimates for the federal government range from savings of $99.6 billion over 10 years to costing the government $196 billion over the same period.
“We’re not talking about painkillers and things like that, we’re talking about cancer meds, HIV, respiratory disease, COPD — that kind of thing,” Murphy told The Daily Caller News Foundation in a phone interview. “In our research and working with the Partnership for Safe Medicines, we’ve learned that seven other states have tried [drug importation laws], and it hasn’t worked anywhere yet.”
The measure would allow Florida to import pharmaceuticals from Canada at a lower cost, and passed the Florida House by a vote of 93-22 in April. It later passed in the state Senate by a vote of 27-13 and is awaiting Republican Gov. Ron DeSantis’s signature.
Importation, or reimportation as it is sometimes called, is a dangerous gamble. Neither the safety nor efficacy of imported medications can be ensured, placing every patient who takes these medications at great risk. There is no way to verify these medications originated in Canada and Canadian authorities have made it clear they will not be responsible for the quality and safety of prescription drugs being shipped from or through their country.
Often, these drugs come from what appears to be a legitimate source, but testing has shown that many are counterfeit, manufactured in unsafe conditions and contain little, if any, active pharmaceutical ingredients. In fact, a 2017 report from the World Health Organization showed about 1 in 10 medications from developing countries were fake or substandard.
Read more: Don't import prescription drugs
The U.S. Department of Health and Human Services (HHS) has proposed a dangerous new policy—known as International Pricing Index (IPI) Model—that would import alarming policies from foreign governments with socialized health care systems.
The proposal could block access to life-saving drugs for America’s seniors, inhibit the research and development necessary to discover new treatments, and threaten our nation’s free-market health care system — currently one of the best in the world.
Senator Rick Scott (R-Fla) has introduced legislation that would import foreign price controls into the U.S. ATR urges Senators not to cosponsor this legislation.
The legislation, known as the Transparent Drug Pricing Act, would institute a price control on medicines so that the list price of a drug cannot exceed the lowest price of the drug in Canada, France, the United Kingdom, Japan, or Germany.
One feature of the political moment is that ideas that first appeared on the left (tariffs) are gaining support on the populist right. The latest example is a GOP plan in Florida to import prescription drugs from Canada, which is impractical, unsafe and unlikely to reduce prices at the pharmacy.
The Florida Legislature has been moving on a plan pushed by Republican Governor Ron DeSantis that directs the state health agency to set up a prescription drug importation program. Other states like Colorado are pondering similar schemes, and Vermont is well along in setting one up.
The thinking is that prescription drugs are too expensive, so the U.S. should import them from countries like Canada that impose price controls on medicine. State employees and the Department of Corrections are among the intended beneficiaries. State Medicaid programs already receive 20%-plus discounts on drugs that would be hard to top with importation.
Read more: Importing Bad Ideas on Drug Prices
Rep. Steven Scalise is working on helping seniors save on prescription drug prices:
The proposal primarily affects the 644,000 Louisiana residents -- and 45 million people across the country -- enrolled in Medicare’s Part D drug benefit. Part D plans are federally subsidized but administered by private insurers who compete to sell their plans to the public.
These insurers work with middlemen known as pharmacy benefit managers to design plans and determine premiums, co-pays and co-insurance -- the percentage of a drug’s price that Medicare enrollees must pay out of pocket. PBMs decide which drugs to include in each Part D plan. They leverage their decision-making power to demand big discounts from pharmaceutical companies.
Sen John Kennedy of Louisiana recently discussed prescription drug prices in America:
I’m working to lower the cost of prescription drugs. It’s an embarrassment when the average American pays twice what someone in Canada or Great Britain or Switzerland pays for the same identical drug by the same identical manufacturer.
Sens. Chuck Grassley, R-Iowa, and Amy Klobuchar, D-Minn., recently introduced a bill that would permit Americans to import pharmaceuticals from Canada. The two lawmakers believe their bill will reduce drug costs. But at what cost?
The bill would instead expose patients to potentially dangerous counterfeit drugs. Lawmakers would be wise to vote against it.
Per Facebook, Rep. Clay Higgins had the following to say during a recent committee meeting on the drug crisis:
Law enforcement professionals tasked with securing our borders don't need DC bureaucrats or politicians, who've never worn a badge, to tell them what their mission is. All they need is for Congress to provide the resources that they have clearly and properly requested.
In a letter to the Department of Health and Human Services, ATR and 56 other conservative groups and activists expressed opposition to HHS’s “International Pricing Index” (IPI) payment model for drugs administered under Medicare Part B.
“As the title of this paper, "Poison Pill: Importing Foreign Drug Price Controls," suggests, both the regulatory and legislative proposals to index domestic drug prices to foreign prices run into the same serious economic issues. However one serious flaw trumps all others. The focus of the paper is on the fact that governments cannot effectively set efficient prices.“
Importing prescription drugs from Canada has long been seen as an easy solution to skyrocketing drug prices for U.S. patients.
But now that President Donald Trump and Democrats are pushing to make those cross-border sales legal, Canadian health experts are issuing a dire warning: It could destroy Canada's drug market.
On cost, the Grassley-Klobuchar would yield negligible savings at best. If the entire nation legalized drug importation, number crunchers at the Department of Health and Human Services predict that American drug spending would decrease by less than 1 percent.
On safety, the bill encourages prescription drug abuse. Legally, Canadian pharmacies can only fill scripts written by Canadian physicians. Creatively, some online pharmacies recruit local doctors to "co-sign" prescriptions for American patients. Writing a prescription for a patient one hasn't seen isn't just unethical; it invites fraud. This is especially worrisome given the rising prevalence of prescription drug misuse and abuse.
The bill also exposes Americans to dangerous counterfeits. It's estimated that 1 million people die at the hand of counterfeit drugs every year, many of which come from Canada.
As the economists note, instituting price caps skews the market and “leads to shortages, squeezes the cost bubble toward some other portion of the economy, and imposes a deadweight cost on society.”
In laymen’s terms: these price controls will restrict patient access to needed drugs and reduce drug makers’ ability to invest in the research and development of new medicines.
President Trump is right to try to lower drug prices here at home. It is a travesty that other nations get access to U.S. innovation at cut-rate prices — much lower than what Americans pay. For example, the Health and Human Services Department reports that a senior who receives an eye medicine that currently costs Medicare $1,800 a month is charged only $300 a month in many other nations. A popular chemotherapy drug costs Medicare $4,700 for each treatment here in the U.S. but only $1,100 in other nations. HHS estimates that Americans pay “180 percent of what other countries pay for physician-administered drugs.” Something is seriously wrong here.
Americans for Tax Reform: Conservatives Oppose HHS International Pricing Index for Medicare Part B Drugs
As part of the crackdown, called Operation Pangea XI, the FDA sent warnings to seven different networks operating 465 websites that were offering up misbranded or unapproved drugs. This is the 11th annual operation.
Some of the domains include seemingly innocuous names like bestgenericstore.com or top-meds-discounts.com.