Vermont considers insulin, HIV drugs for importation
By Rachana Pradhan
Vermont is eyeing birth control, insulin and pricey medications for HIV and multiple sclerosis patients as possible candidates for the state’s landmark program to import cheaper drugs from Canada, according to documents obtained by POLITICO.
The drugs are among the 17 most expensive that two private insurers identified for state officials and are potentially eligible for importation, show the documents, which were obtained through a Vermont public records request. Vermont officials determined the importation program could save insurers up to $5 million annually, based on that list of drugs.
The medications include Gilead’s Truvada, a $20,000-a-year HIV prevention pill whose price tag drew scorn from congressional Democrats during a hearing this month; Harvoni, among the recent class of drugs effectively curing hepatitis C; Merck’s Nuvaring, a contraceptive costing up to $200 per month without health insurance; and Zytiga, a blockbuster prostate cancer drug manufactured by Johnson & Johnson.
The list, which is from last year, isn’t a final catalogue of drugs Vermont would seek to obtain from the United States’ northern neighbor, but it provides a glimpse into the state’s deliberations more than a year after state lawmakers authorized the nation's first wholesale drug importation program.
“The 17 is our first cut, or our first time analyzing what would be candidates for importation that would generate savings,” said Ena Backus, the state's director of health care reform. “I think you do it a different quarter of the year you’re going to get a different list.”
Florida and Colorado approved similar importation programs this year. The idea has support from President Donald Trump but has encountered resistance from his top health officials.
Vermont still has several hurdles to overcome before its program could get off the ground. It still must finalize a plan and submit it for the Trump administration’s approval. Vermont is also delaying a statutory deadline to send its plan to HHS by a year — giving itself until July 2020 — because it wants to huddle with other larger states trying to build importation programs.
Because the process is breaking new ground, Backus said state officials were essentially "flying blind" on how to best approach federal officials.
“That’s why we felt like it was a great opportunity to slow down on submitting our application and to understand how more people are thinking about this," she said, adding that the state has not yet discussed its plan with HHS.
Vermont and other states seeking HHS approval must prove the importation program wouldn’t pose additional risks to patient safety and that consumers will pay less for drugs under the new model.
HHS set up a working group last summer to study importation, but its work — and even who’s in the group — has been kept secret.
The pharmaceutical industry and other importation opponents, including many Republicans, have argued that it will open up a dangerous pipeline into the United States for drugs whose safety cannot be accounted for. Further, they say it won’t produce much savings because importation could drain Canadian drug supplies, creating shortages and driving up prices, resulting in minimal savings for U.S. customers.
“We simply can’t fathom a duration or a scheme or a structure in which this plan will drive significant savings,” said Tom Rutkowski with CBPartners, a consulting firm focused on pharmaceutical and device issues which has analyzed the Vermont program.
The company said Vermont was unlikely to save much because discounts Canadian provinces negotiate with drugmakers would not be passed down to U.S. customers, and some especially expensive drugs that could drive greater savings don't qualify for importation.
“It’s a dumb idea now and a dumb idea in 2020,” Peter Pitts, president of the Center for Medicine in the Public Interest and former associate FDA commissioner, said of importation. “It’s a political ploy.”
The idea of importing drugs from Canada is gaining steam in states as officials grapple with rising costs and see a steady stream of new drug approvals with eye-popping prices. Maine and Connecticut are among the other states also considering creating their own programs, although legislation is unlikely to pass this year.
Trump has recently heaped praise on the idea, and he’s frequently complained that U.S. patients often pay much higher prices for drugs. He’s asked HHS Secretary Alex Azar — who has called importation a “gimmick” — to work with Republican Florida Gov. Ron DeSantis, a close ally, on his state’s importation plan.
“We may allow states to buy drugs in other countries if we can buy them for a lesser price — substantially less price,” Trump said at a White House event on health care earlier this month.
A plan won’t come easy, though. Vermont officials are still figuring out how much operating an importation program would cost and how it would pass cost-savings on to consumers. Backus, the health reform director, said the list of import candidates is a moving target because of changing prices and drug usage.
Further, the state doesn’t have the full picture of which drugs cost health insurers the most. Blue Cross Blue Shield of Vermont and MVP Health Care provided information for the state’s analysis but Cigna declined, Backus said.
Other regulatory issues could alter Vermont’s plans. For example, the FDA next year will regulate insulin as a biologic rather than a drug, which could make it ineligible for importation.
Backus and others said should Vermont manage to get its program off the ground, the state would likely update its list of importation candidates every quarter.
“This is all new ground,” said Trish Riley, executive director of the National Academy for State Health Policy, which is working with Vermont, Florida and Colorado on their importation plans.
“They want to be consistent and they want to think it through together,” she said.
Sarah Owermohle contributed to this report.