Lawmakers move forward on plan to import drugs from Canada

By Colin Meyn, VTDigger.org

Aplan to set up a state drug wholesaler that will import drugs from Canada in a bid to reduce prescription drug prices in Vermont was sent to the House on Wednesday after being approved by the Senate Health and Welfare Committee.

The lawmakers who drafted the bill, S.175, are touting bipartisan support in Vermont, however a bigger hurdle to the scheme — which would be without precedent in the United States — will be getting approval from the U.S. Department of Health and Human Services.

Total prescription drug spending in Vermont, which has among the oldest populations in the country, is in the hundreds of millions of dollars. Medicaid spends $208 million annually on prescription drugs in the state, while Blue Cross Blue Shield, the biggest health insurer in the state, spent $158 million in 2016.

Sen. Claire Ayer, D-Addison, who heads the Senate health committee, told reporters at the Statehouse that the bill received unanimous support from her committee.

She said she hoped the scheme would be up and running by January 2020, but did not expect a smooth road ahead. “We know it’s not going to be easy,” Ayer said. “It’s not going to be a straight line. But we wanted to be emphatic that we really have to give this stuff our best shot.”

Ayers said that, under the proposal, Vermont’s Agency of Human Services would identify 15 to 20 specialty brand-name drugs that are costing the state the most money, and import those drugs wholesale from Canada, at which point they would be distributed through existing pharmacy and hospital networks.

Senate leader Tim Ashe, D/P-Chittenden, said the bill was the most promising proposal to slash drug prices that would come out of this legislative session.

“One reason why the [Scott] administration finds themselves cutting programs that serve quadriplegics and other things is because of rising drug prices,” Ashe said. “So this is an area where there is bipartisan agreement that we want to do something to lower those prices.”

Ashe said national headwinds seem to be moving in the right direction, with President Donald Trump saying prescription drug costs are a priority, although he conceded that winning over federal agencies would be challenging.

Members of Vermont’s delegation to Washington have all come out in support of the proposal. Rep. Peter Welch said in January that he had personally met with Trump and received his verbal support for the initiative.

Utah has drafted similar legislation, but has not received federal approval. It is about six months ahead of the timetable laid out by Vermont’s lawmakers. Four other states — Colorado, Missouri, Oklahoma and West Virginia — have recently proposed similar laws.

Ashe said industry lobbyists have argued that the plan would actually add to the costs of prescription drugs, and pose a safety risk to consumers by relying on Canadian inspectors and regulators. He dismissed both concerns.

“That’s always the thing the drug companies will say, that it’s going to end up costing you more. The simple answer that we would give is, if it’s going to cost more we won’t do it,” he said. “And second is, it’s unsafe. Ask any legislature whose up along the northern border if any of their constituents have got sick going across the border and bringing drugs back, and the answer is no.”

During committee testimony on the bill, the Scott administration made it known that, although it supported the intent of the bill, it was not yet convinced that a wholesale importing scheme was the best way forward.

Mary Kate Mohlman, director of health care reform, said in an interview on Wednesday that the administration’s main concern was how the proposed scheme would impact significant savings that the state currently achieves through Medicaid rebates and the federal 340B Drug Discount Program. She also said the cost of running a state wholesaler might negate the savings on the actual drugs.

“We want to make sure this is a proposal that does not have unintended consequences,” Mohlman said. “This is a really big issue for Vermonters and we are really looking forward to working with the House to work through some of these questions.”