Florida’s new drug importation program among state, federal initiatives aiming to lower costs for residents

By

Shane Ersland

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Many Floridians struggle to pay for expensive prescription drugs, but efforts at both the state and federal levels aim to lower costs. Industry leaders discussed those initiatives at the 2024 Florida State of Reform Health Policy Conference last month.

Dr. Kevin Duane—owner of Panama Pharmacy and a member of the Florida Pharmacy Association—said the patient population at his Jacksonville pharmacy are predominantly minorities or have a lower socioeconomic status.

“So I saw firsthand the struggles that people have,” Duane said. “You read news articles about how people have to pick whether they buy their heart medicine or buy groceries. I saw that firsthand, and it was very shocking. Being an advocate for those that can’t advocate for themselves is very important. So in order to be part of a true solution, I decided I had to become more involved in prescription drug affordability in this state, and be the voice for my patient base.”

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Dr. Constance Payne, associate principal at Health Management Associates (HMA), noted that the Food and Drug Administration (FDA) recently authorized Florida to import certain prescription drugs from Canada, aiming to give residents access to lower drug prices paid by people in that country. It was the first time the FDA has granted authority for a state to safely import prescription drugs from another country.

“Florida lawmakers have implemented measures to improve drug affordability over the last few years, including legislation to authorize drug importation from Canada,” Payne said. “What obstacles remain, and as a pharmacist who always has drug safety in mind, are there potential risks to drug importation that might outweigh the benefits?”

The vast majority of active pharmaceutical ingredients come from countries like India and China, Duane said. And most Canadian drugs come from the same countries as those the U.S. imports from.

“I think the safety question is somewhat overblown. The FDA’s approval for Florida’s importation program was predicated on robust safety program monitoring. So I think it’s more [about] obstacles. And I think payors will be obstacles. The payors will still want a piece of that rebate pie. And importing drugs directly from Canada bypasses a lot of that. In Medicaid, it’s OK because Medicaid is the ultimate payor. 

(And) pharmacies aren’t set up for this yet. It will be a different model. I think it’s going to be a win-win, but there are obstacles about having it logistically set up for pharmacies to receive products and dispense them.”

— Duane

Dr. Daniel E. Buffington—president and CEO of Clinical Pharmacology Services, Inc., and associate professor at the University of South Florida’s Taneja College of Pharmacy—said the importation program gives the state an opportunity to identify quality manufacturers in other countries. 

“This would be the equivalent of product wholesale acquisition from export companies in other countries,” Buffington said. “So (we need to ensure) this doesn’t evolve to a direct-to-consumer issue where you might lose that opportunity to have safety oversight. So (we need to) make sure the amount of effort and rigor the FDA puts into evaluating that (program) happens with importers and exporters well, so it’s not like a second tier of quality passthrough where somebody could utilize a less-quality product.”

Florida has not implemented a prescription drug affordability board (PDAB), although 10 other states have. HMA Principal Greg Gierer said there is a lot of innovation in those states in their different approaches to addressing prescription drug affordability. 

“Some states like Colorado, Washington, (and) Maryland are out in front of some of these issues with the affordability boards. Florida’s taking a different approach, which is transparency (for) PBMs (pharmacy benefit managers) and (pharmaceutical companies). At the state level, it’s not one-size-fits-all. Different states will approach this differently depending on their residents, and their affordability issues. The PDABs have been fascinating to watch. Will more states piggyback on these drug price negotiations?”  

— Gierer

Buffington noted concerns about upper payment limits some PDABs aim to consider placing on certain drugs, however. 

“The PDAB should be the driving force for studying a class (of drugs) at a time, and identifying products that are giving the best therapeutic outcome from a patient perspective in terms of risk of adverse side effects or complications,” Buffington said. “It can be something (pharmaceutical companies) can embrace as well, but I don’t think a cold-class price regulation will lead to the [ideal] outcome.”

Payne noted that the Inflation Reduction Act (IRA) allows Medicare to negotiate directly with drug companies to improve access to costly drugs.

“As part of the IRA, the federal government has begun negotiating directly with drug manufacturers to lower the costs of specific prescription drugs, especially those considered to be of high cost to the average consumer. As prices drop for Medicare, do you anticipate the changes will have any downstream impacts on other markets, like Medicaid or the marketplace? Do you anticipate manufacturers having a more difficult time justifying higher costs for other payors if Medicare’s setting caps on pay for prescription drugs?”

— Payne

Gierer noted that any negotiated prices for the first cycle of negotiations will become effective in 2026

“This process is well under way, so there’s a lot of different considerations,” Gierer said. “How is this going to benefit beneficiaries directly? We already know how this is going to result in significant savings from the federal government as they do these negotiations for these 10 drugs. Beneficiaries could benefit from lower costs through lower copays as a result of these negotiations. One thing to watch is how the implementation influences state policymaking. There’s some interesting interplay there.”

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