The Colorado Department of Health Care Policy and Financing (HCPF) is in the process of finalizing a proposal to import prescription drugs from Canada, which it will submit to the FDA this fall.
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Section 804 of the Federal Food Drug and Cosmetic Act (FDCA) requires the FDA to establish rules and regulations for states to establish prescription drug importation programs, outlining guidance concerning the safety and procurement of medications from international sources.
HCPF is currently in negotiations with Canadian drugmakers over the pricing and procurement of certain target medications. Once finalized, the lineup of cost-saving drugs and logistical details will be part of the department’s Section 804 importation plan, or SIP, that will be submitted to the FDA for approval.
Last week, after announcing their solicitation of Canadian importation partners in January of 2021, HCPF announced partnerships with 3 companies that will manage the pipeline of drugs from Canada.
AdiraMedica, a Canadian wholesaler, will secure drugs directly from manufacturers and prepare them for export to the US. Premier Pharmaceuticals, a wholesaler based in Idaho, will serve as importer to receive and distribute the drugs throughout the state.
Rocky Mountain Poison and Drug Safety will provide oversight on drug safety, including managing product recalls and outreach and reporting adverse effects.
HCPF Executive Director Kim Bimestefer said the disruptive program faces numerous challenges ahead but that her department has been working and will continue to work closely with both the FDA and Canadian authorities to ensure the plan complies with all federal and international rules and regulations.
“The vision [for drug importation] is to have another tool in our tool belt to save people money on health care, and prescription drugs are the biggest driver of rising health care costs,” Bimestefer said. “It’s important to employers, to consumers, to public programs, and in other countries, they are paying far less than we are. In Canada, it’s more than 60% [less than what we are paying]. The vision is to bring in drugs through this available program now approved at the federal level and to bring savings to Coloradans, to employers, and public programs where we can.”
A study by the Kaiser Family Foundation (KFF) highlighted the high costs of cancer treatments that burden patients with high out-of-pocket expenses for years on end to access these life-saving medications. The median annual out-of-pocket cost for the 15 specialty-tier cancer drugs in the study exceeded $8,000 across all health plans.
In 2019, Coloradans spent $6.7 billion on prescriptions filled at retail pharmacies and, according to the Colorado Health Institute, 1 in 10 Coloradans did not fill a prescription due to costs.
A recent national poll conducted by West Health and Gallup showed that 26% of respondents avoided medical care and paying for prescription drugs altogether due to high costs.
Colorado’s 2020 draft application for the program studied the cost savings of more than 160 medications that span cancer, diabetes, HIV, multiple sclerosis, heart disease, respiratory illness, and women’s health, among other categories. There is a list of drugs that cannot be imported due existing federal regulations, including insulin and controlled substances.
Once submitted, the FDA will set a review period in which it will evaluate the selection of drugs and the cost-saving infrastructure outlined. The savings generated through the importation program would be passed along to consumers in the form of lower premiums, as well as reductions to enrollee cost sharing and spending during the deductible period.
The lower costs could save Coloradans who purchase the imported medications through their private health insurance plans on average 60%, according to HCPF.
The drugs being imported would be the exact equivalents to those being sold in the US, with the only differences being price and country of origin.
“We have conducted many analyses of drug pricing in Colorado specifically using our all payer claims database, taking into account specific populations, chronic conditions, maintenance drugs, some emergency drugs like Ventolin or albuterol, inhalers, HIV drugs,” said Lauren Reveley, Importation Manager who leads the work at HCPF. “We’re targeting drugs that will help everyday people live healthy and successful lives so that they can access the drugs that they need at a more affordable price.”
Health plans in Colorado will determine their own coverage and pricing for imported drugs but will not be obligated to cover them. The department said it has been working with insurance and pharmacy stakeholders to ensure transparency on price and best affordability options for consumers.
Along with FDA approval, the program’s testing, re-labeling, and distribution networks will need additional time to set up. Reveley says if everything goes according to plan, the first tranche of imported drugs could be on shelves in local pharmacies by late 2023.