Insurers invited to participate in Vermont’s drug importation proposal

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Ben Comer Senior Manager, Health Research Institute, PwC US December 13, 2019

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Vermont anticipates saving between $1 million and $5 million annually through a drug importation program that would allow commercial insurers to import some pharmaceutical drugs from Canada, according to a concept paper it will submit to HHS.

Vermont’s importation plan, which would be open to consumers covered by private insurance, differs from a plan announced by Florida in August that would make imported drugs available to patients covered by Medicaid or served by county health departments and state-run facilities.

Savings from importation to Vermont consumers were estimated by identifying 17 drugs with the highest spending levels across commercial health plans; net prices paid by those plans were then compared with drug prices listed in the Quebec public drug program list, plus a 45 percent markup to cover costs associated with the distribution supply chain. After the markup, commercial plans in Vermont would save between $2.61 and $2.82 per member per month, or between $1 million and $5 million annually, according to the concept paper.

Vermont’s importation plan, like Florida’s, would not import controlled substances, biologics, or pharmaceutical products that are infused, inhaled during surgery or injected intravenously, in accordance with the Federal Food, Drug and Cosmetic Act. However, Vermont will ask for special permission from HHS to import insulin as part of the state’s final proposal, according to the paper. Vermont consulted with the National Academy for State Health Policy to conduct the drug savings analysis provided in the plan.

HRI impact analysis

Vermont’s concept paper for importation is intended, in part, to advise HHS as the agency issues guidance on importation. The federal HHS/FDA Safe Importation Action Plan, which is under review by the Office of Management and Budget, describes two pathways for Canadian importation, one for states importing drugs and another for manufacturers importing their own products and selling them in the US under a separate product National Drug Code (NDC).

To date, HHS has not approved a state-run drug importation program, although several states have requested approval or have experimented with importation programs. The Trump administration’s focus on drug importation has worried some Canadians, who fear US importation would jeopardize the drug supply in Canada.

Because existing law prohibits importation of complex products such as biologics and infused therapies, which are often more expensive than traditional, chemically derived therapies, it is unclear how much of an impact importation would have on patient affordability.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Ben Comer

Senior Manager, Health Research Institute, PwC US

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

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