FDA allows Florida to import drugs from Canada, but Ottawa says it’ll safeguard domestic supply

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The U.S. Food and Drug Administration is clearing the way for Florida to import pharmaceuticals from Canada, but the Canadian government is warning it would not support bulk export of drugs if doing so would cause a domestic shortage.

Florida has sought since 2019 to import prescription drugs from Canada as a way to access lower prices for state-run drug plans, such as one for Medicaid recipients. Governor Ron DeSantis said he expects imports from Canada to save the state up to US$180-million in the first year.

Although Canada has the third-highest average pharmaceutical prices in the world, the United States is No. 1, with an average price that is 3½ times higher than Canada’s, according to Canadian federal data.

On Friday, the FDA issued an authorization for Florida’s drug-import plans for up to two years, which is the first time the regulator has granted such an approval. Florida will still have to submit drug-specific approvals to the FDA, ensure the medicines are not counterfeits and file a quarterly report about cost savings and any quality issues.

The Canadian government said it disapproved of exporting large amounts of pharmaceuticals to the U.S. because it could affect domestic supplies.

Health Canada issued an industry bulletin on Friday saying it is reviewing the FDA decision and warned drug sellers that distributing medicine outside Canada is prohibited if “doing so could cause or worsen a drug shortage.”

Department spokesperson André Gagnon said Health Canada would take action against anyone caught exporting against that prohibition, with penalties that could include taking away licenses from drug sellers. “Health Canada stands ready to take immediate additional action, if needed, to help safeguard the Canadian drug supply,” he said in a statement.

Canada’s pharmaceutical industry also expressed concern with the FDA approval on Friday. Innovative Medicines Canada, the industry’s national lobby group, said it will work with Health Canada to “safeguard” the country’s drug supplies.

“Canada simply can’t supply drugs to Florida, or any other U.S. states, without significantly increasing the risk and severity of drug shortages nationwide,” David Renwick, the group’s interim president, said in a statement.

The main U.S. association – the Pharmaceutical Research and Manufacturers of America (PhRMA) – said the matter is a safety concern and said it is considering “all options” to block the imports, which could include legal action.

“Ensuring patients have access to needed medicines is critical, but the importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health,” PhRMA president Stephen Ubl said in a statement.

Michael Law, a Canada Research Chair in access to medicines at the University of British Columbia, said it is unlikely that manufacturers and wholesalers in Canada would be able to ramp up supply to meet U.S. demand, given how much larger the southern market is. For example, Florida’s population of 22.6 million people is more than half of Canada’s total population of 40.5 million.

He also said pharmaceutical companies would not want to do anything to undermine their positions in the lucrative U.S. market.

“The drug companies care more about the American market than they care about ours, both because prices are higher and the volumes are just so much larger,” Prof. Law said.

A handful of other states have also sought authorization to import Canadian drugs, including New Hampshire, whose plan was rejected in 2022, and Colorado, whose application is still pending.

Escalating drug prices have become a major health-policy issue on both sides of the border.

In the U.S., one of the most significant recent moves was a measure in the 2022 Inflation Reduction Act that allows Medicare to negotiate with drug makers for lower prices on some medicines for seniors.

In Canada, public-health plans spent $17.2-billion on drugs in 2022, an increase of 6.4 per cent over the year before, according to the Canadian Institute for Health Information. Much of the large increases in recent years can be attributed to particular high-profile drugs, the CIHI data show, with new cystic-fibrosis drug Trikafta and popular diabetes drug Ozempic responsible for half the total growth in new drug spending between them.

Canada does regulate drug pricing through a body called the Patented Medicine Price Review Board. The federal government tried to reform the drug-pricing regime starting in 2019 to try to further push down prices, but most of the reform package was abandoned because of intense industry pressure and adverse court rulings.

The only reform to survive was a change to which countries Canada can compare its drug prices against, and as a result of that change, Canadian regulators no longer compare domestic prices with U.S. ones.