Diverting Canada's drugs south... at what cost?
Speakers at a recent National Pharmaceutical Congress Webinar respond to a plan for Florida to import its formulary drugs from Canada (1,035 words, 5 minutes)
By Cristela Tello Ruiz and Diane Bracuk
Upon learning of the U.S. FDA’s potential approval of Florida’s plan to import cheaper drugs from Canada, numerous healthcare leaders voiced their concerns about possible risks for Canadian patients. At the National Pharmaceutical Congress 2024 Winter Webinar on FFeb. 282024, panellists deliberated on the viability of the importation proposal and strategies for safeguarding the affordability and availability of medications in Canada.
The opening speaker, Dr. David Kreling, Professor of Pharmacy at the University of Wisconsin, Madison, questioned whether Florida’s plan would advance. “This is just kind of a reiteration of a plan that hasn’t been successful in the past,” he said. “So, I’m not sure if this will have legs.”
One reason, he said, is the majority of Americans are covered by health insurance. “As a result, drug supply, pricing and payment goes through coverage plans,” he said. “Manufacturers in the U.S. set factory pricing for their products, which subsequently affects what consumers must pay and influences the compensation pharmacists receive for dispensing these medications. Moreover, post-market rebate adjustments, governed by contractual agreements between manufacturers and pharmacy benefit managers and plants, further complicate the issue.”
Dr. Kreling also said introducing a different cost structure through drug importation could drastically affect pharmacies. “It would be difficult for pharmacists to know how to make necessary adjustments. How will they know when and where to make those adjustments? The same goes for consumers,” he said. “Figuring out how this is potentially going to work involves so many details, and it’s likely to generate all kinds of craziness, given the manipulations and machinations that occur outside the standard chain of custody and pricing phenomena in the U.S.”
Dr. Ted Witek, Professor and Senior Fellow of the Institute of Health Policy, Management and Evaluation at the University of Toronto, echoed Dr. Kreling’s sentiment about the potential lack of immediate impact on drug prices for U.S. patients. “The original intention of the importation plan was to supply lower-cost drugs in scenarios where people lack access to private insurance such as prison populations or Medicaid,” he said. “So are Americans getting a reduction on drug prices? Or is the government saving money in those patient populations that don’t have access to private insurance?”
For David Renwick, Interim President of Innovative Medicines Canada, the substantial population gap between Canada and the U.S. is a major issue. “Florida alone has 23 million people. The prospect of 17 other states enacting laws that would facilitate bulk importation raises serious concerns for all of us. Given this scale of difference, Canada would struggle to offer a substantial supply to meet U.S. demand, potentially leading to drug shortages for Canadians.”
Jacelyn Katelnikoff, a pharmacist and founder of JKAT Health Solutions in Saskatoon, noted that these drug shortages could particularly affect small, independent Canadian pharmacies.
“We try to maintain the lowest inventory possible for many reasons,” she explained. “And in Saskatchewan, we generally only hold enough supply for one month. That affects how wholesalers and manufacturers forecast as well as how they forecast down the line. So even a small increase in demand can result in a shortage situation, which can get stressful when we talk about the U.S. asking for bulk exports.”
Panelists also discussed the need to educate American patients about the distinction between legitimate and unauthorized drug purchases. “Many Americans don’t realize that ordering drugs online from Canada is not approved by the FDA,” said Dani Peters, President of Magnet Strategy Group. “Furthermore, there’s a lack of enforcement on both sides of the border, which means that what’s being imported or exported isn’t closely monitored. So, if Florida does end up importing drugs from Canada, people may think they can order online, potentially falling victim to an illegitimate online operation that isn’t under provincial oversight. Addressing these oversight gaps is one of our challenges in Canada.”
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