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Utah lawmakers question prescription drug pricing, talk importation from Canada

FILE - This Aug. 29, 2018 photo shows an arrangement of prescription Oxycodone pills in New York.
FILE - This Aug. 29, 2018 photo shows an arrangement of prescription Oxycodone pills in New York.
Mark Lennihan, Associated Press

SALT LAKE CITY — The Utah Legislature is back to talking about importing certain prescription drugs from Canada to save Utah patients money.

"There are 30 million Canadians and 300 million citizens in the United States. There's not enough drugs sitting on shelves in Canada to supply all of the United States, but there's plenty to service 3 million Utahns," said Rep. Norm Thurston, R-Provo, who is seeing through a provision he passed earlier this year.

HB163 required the Utah Department of Health to study the idea and return to the state's Health Reform Task Force on Thursday to discuss various issues related to implementing an importation program in Utah.

"I suspect there are around 20 to 25 drugs where it makes sense to do this," Thurston said. "There are a lot of drugs where you wouldn't want to, because there is no cost advantage."

He believes there's enough of a markup on some drugs that the program costs would be covered.

Dr. Marc Babitz, deputy director at the health department, told lawmakers that Canadian importation would mean a lot of new responsibilities for Utah, including possible creation of an agency or office to oversee, administer and distribute imported drugs. He also said the state would have to prove there is a market for it, that enough people would save enough money.

"We have to show that the price the consumer gets in Utah is significantly lower than before," he said.

Utah officials, Babitz continued, would have to find a wholesaler to bring the drugs across the border but also audit the process to ensure safety. Additionally, the drugs would have to be repackaged according to FDA standards.

"All these middlemen would have to be put in place … and it is hard to know whether that will result in savings," he said.

There are licensing issues and a question of whether Medicaid patients would be able to reap the savings, as the government program already negotiates rebates and discounts for patients.

Babitz is also concerned because Utah is the first state to try and import prescription drugs from Canada, though Vermont is pursuing similar prospects.

"It's a very complex system, with all these different players. Each requires oversight and safety, tracking and a cut of the money," he said. Not to mention, pharmaceutical companies in the country are not fans of the proposal and already foughtagainst Thurston's first bill.

Thurston said that while the to-do list is long, items can be "tackled one at a time."

"And none are that hard or undoable," he said.

Utah lawmakers would need to get approval from governments in both countries to legally implement the program, and, with the current conservative leadership, "there is a higher probability," according to Jane Horvath, senior policy fellow with the National Academy for State Health Policy.

The infrastructure, she said, is already in place.

"You could likely get it done with contracting," Horvath said.

"There is no way they'll allow this to happen," said Sen. Gene Davis, D-Salt Lake City, who questioned Thurston repeatedly on the matter.

Thurston said the bar is high, but, "they get that we're paying more for drugs in the U.S. than they are in other countries." He said he'll have a bill ready in January to help further the discussion.

Drug manufacturers in the United States follow strict regulations of the Food and Drug Administration, tracking all ingredients and processes to ensure safety and quality, said Dana Malick, senior director of health policy for the Pharmaceutical Research and Manufacturers of America, a trade association representing 38 biopharmaceutical research and biotechnology companies in the country.

"We certainly understand the need for affordable pharmaceuticals, but we support making medicines more affordable and not opening up the very closed supply chain that is regulated by the FDA," Malick said, adding that equipment and ingredients to make medications comes from regularly inspected facilities and anything else would be questionable.

"It is unclear, even if you're getting drugs that are approved in Canada, that the active ingredient might not have started in our FDA's closed supply chain," she said.

Consumers, Malick said, often only see a drug's sticker price, but that isn't usually what they end up paying, depending on insurance coverage and other negotiated discounts. She agreed that the end goal should be lower cost to patients, but that operationalizing drug importation might not be the most ethical route.

Babitz said there are other things underway aiming to reduce drug costs, including recent development of a generic drug company that will be based in Salt Lake City. The announcement comes from a group of health care providers, including Intermountain Healthcare, that plan to team up and manufacture generic drugs in short supply and available only at high cost.

"Pharmacy costs have been increasing at double digits," Babitz said. "The U.S. sells to other countries at cheaper costs … making us believe we ought to pursue Canadian importation.

"We have to save money," he said.