From the savvy pen of BioCentury’s Washington Editor, Steve Usdin.
Azar’s political play with drug importation
The drug importation policy announced by Alex Azar last week is a political stunt, aimed at generating headlines at a time when the HHS secretary seems desperate to demonstrate to Donald Trump and the media that he’s fulfilling the president’s pledges to lower drug prices. In fact, as Azar knows, importation will have a negligible effect on access to drugs.
Opening the door to importation as a price control tactic will, however, create precedents that will damage FDA, and consequently hurt biomedical innovators and patients.
The new policy would allow importation of drugs that lack patent protection or exclusivity, and that are produced by one manufacturer.
Azar indicated in a July 19 interview with Fox News that the move was his idea, and that he expects FDA to fall into line behind it. The HHS secretary said he called FDA Commissioner Scott Gottlieb to demand establishment of a working group on importation, telling him: “I insist that you find a pathway to make this happen.”
The record shows both Azar and Gottlieb know that importation won’t move the needle when it comes to drug prices.
Speaking to reporters in May, Azar dismissed drug importation as a “gimmick,” arguing that even if it could be done safely, drug companies would respond by limiting supplies to countries that were exporting to the U.S.
In March 2016, Gottlieb wrote that presidential candidate Trump’s endorsement of importation was “good politics” but that it would “offer consumers little relief.” The cost of ensuring the safety of imported drugs would eat up any savings, he wrote.
During his FDA confirmation hearing in April 2017, Gottlieb reiterated his belief that importation isn’t a feasible tool for lowering drug prices.
Azar’s politically motivated plan will undermine FDA’s well-earned reputation as a non-partisan, science-based regulator.
Azar and Gottlieb didn’t issue any caveats. They never suggested importation could be used to target price hikes taken on off-patent drugs by unscrupulous pharma companies.
The issue isn’t whether FDA can ensure the safety of imported drugs. History shows it can do so to address public health emergencies, on a limited scale and at great cost.
For example, in 2012 the agency facilitated the importation of an unapproved vaccine to combat meningitis outbreaks on college campuses. The next year, FDA found and arranged importation of foreign supplies of injectable drugs used to make total parenteral nutrition after a U.S. manufacturer voluntarily shut down to resolve quality issues. In a blog posting, the agency described the resource-intensive process it went through to ensure the safety of the imported products.
There’s a big difference, however, between taking extraordinary steps to secure drugs needed to combat a public health emergency and claiming importation should be used to puncture a pricing bubble.
Azar’s politically motivated plan will undermine FDA’s well-earned reputation as a non-partisan, science-based regulator by putting it at the center of political and economic controversies it is ill-equipped to navigate.
Across multiple presidencies, the agency has consistently said it has no authority over prices. But Azar would force FDA to develop a methodology to determine which prices are egregious - inevitably leading it to steer regulatory policy on the basis of public outrage, media attention, or political expediency.
The alternative is for HHS to tell FDA which drugs would be subject to importation. This would set a precedent at odds with FDA's mandate to operate as an independent agency.
What’s going to happen when President Trump or a future occupant of the White House sees TV programs about a lifesaving new drug with an eye-popping price in the U.S. that is available for less in Italy or Indonesia? How long will it take for the president to pick up the phone and order HHS to arrange for imports from a country with price controls? And in the heat of the moment, will either the White House or HHS stop to ensure that the supply chain is safe, to consider the disincentive to innovation caused by intemperate importation of price controls, or to consider other ways to ensure that American patients have access?
Azar and Gottlieb have described a circumscribed program in their public statements, and reiterated their opposition to large-scale importation. Nuance doesn’t get far in Washington.
No matter how targeted the program is, it will fuel the enthusiasm of activists who are demanding the broad importation practices that Gottlieb and his predecessors have condemned as infeasible and dangerous.
It already has.
Within hours of Azar’s announcement of the importation policy, Sen. Chuck Grassley (R-Iowa) praised the action as the first step toward opening the borders to prescription drugs from Canada and other countries.
While it will be politically attractive, whacking a pharma bro or two wouldn’t fundamentally change the drug pricing environment.
Given his prior opposition to importation, it seems Azar is motivated by a desire to placate Trump by generating favorable publicity. In fact, his department has been prodding and cajoling reporters for weeks as part of an organized effort to get more favorable coverage of its drug pricing blueprint.
Although he talks about market forces and promoting competition, Azar also has displayed an enthusiasm for intimidating individual companies and vilifying CEOs. He has amplified Trump’s tweeted threats to pharma companies and celebrated their demonstrations of contrition.
Tweets and headlines fade quickly. In their relentless search for publicity, Azar and the Trump administration will be reaching for more quick fixes.