Amid multiple efforts to rein in steep drug costs in the U.S., Colorado has received the all-clear to take matters into its own hands, albeit through a framework that may be difficult to pull off in the real world.
Early this week, the FDA approved (PDF) Colorado’s multi-year bid to import lower-cost branded drugs from Canada. The authorization will last for a span of two years and now permits the state to submit so-called pre-import requests to the FDA for specific products, according to a letter from the regulator sent to the state’s executive director of healthcare policy on June 15.
After first exploring the idea in 2019, Colorado joined a number of other states seeking federal permission to import cheaper medicines from Canada in late 2022, following in the footsteps of Florida, New Hampshire and New Mexico. A little over a year later, Florida became the first state—and until now the only other one—to receive formal sign-off on the strategy from the FDA.
Florida’s import approval drew backlash from industry groups on both sides of the northern border, with critics flagging the potential impact to Canadian drug supply and numerous implications for manufacturers. Meanwhile, the program has faced a harsh reality check since winning FDA clearance, with Florida’s public health agency having failed to get the program off the ground as of February, according to Politico and other sources.
While describing the new import approval as a “tremendous step toward making prescription drugs affordable for all Coloradans,” the state, in a press release, alluded to potential hurdles ahead, noting that it “still faces the critical issue of procuring a supply of eligible drugs from manufacturers” and further urging “our federal partners to take a productive role in facilitating manufacturer cooperation with the program.”
The program has the potential to save patients in Colorado some $46 million over three years through lower insurance premiums and out-of-pocket expenses, should a steady supply of drugs from up north be achieved, per the release.
Colorado has outlined (PDF) 20 branded meds in particular that it’s hoping to improve access to via the import program. The list covers a range of drugs, from Gilead’s HIV treatment Biktarvy and Bristol Myers Squibb’s blood thinner Eliquis to Novo’s Ozempic, AbbVie’s Rinvoq and Vertex’s triple therapy combo for cystic fibrosis, Trikafta, among others.
The state added in its announcement that it is “able to work with all willing manufacturers on more than just these drugs to bring savings to Coloradans.”
One key roadblock that potentially stands in the way of Colorado’s plan—as it has for Florida’s—is that Canada is unwilling to pass on supplies of medicines if it could put inventories for its own patients in short supply.
In February of 2024, shortly after Florida received sign-off on its Canadian import scheme from the FDA, Health Canada clarified that it has “regulatory safeguards” in place to preserve the nation’s drug supply, including by “protecting our supply from foreign bulk importation programs.”
The Canadian government added at the time that its “position is that importing large quantities of drugs intended for the Canadian market is not a solution to high drug prices in other countries.” Drugs meant for Canada cannot be sold or exported for use in other countries if it would cause or worsen a shortage back home, the government warned.
Another hitch will likely come in the form of securing pharma company buy-in, and recent trade disputes between the U.S. and Canada could further scupper any potential cooperation, Stacie Dusetzina, a professor at the Vanderbilt University School of Medicine, told Stat News regarding the Colorado program.
Meanwhile, the FDA nod "doesn’t solve the core problem for Colorado," which is namely that "state importation programs from Canada pose a serious danger to public health, and there’s no evidence these programs deliver savings for patients," Reid Porter, a spokesperson for the U.S. industry trade group PhRMA, told Fierce in an emailed statement.
Porter continued that "Florida remains the only other state with authorization, but its program has stalled in part because Canadian manufacturers declined to participate over concerns about protecting Canada’s drug supply.”
While the issue of high prescription drug costs has long been a bipartisan rallying cry for U.S. politicians, the issue has seen more substantial policy movement over the last few administrations, both in the form of the Biden-era Inflation Reduction Act—which teed up Medicare price negotiations on certain high-spend medicines—and President Donald Trump’s “most favored nation” pricing policies, which seek to align U.S. drug costs with those in certain comparator countries.
The Trump administration last week floated a proposal to make Medicare pricing negotiations established via the IRA permanent, and multiple Big Pharma companies have fallen in line with the President’s MFN push, too, inking high-profile deals with the White House that outline discounts on select meds and lower pricing pledges on future U.S. launches in exchange for tariff immunity and other potential perks.
Nevertheless, deeper affordability issues may remain unresolved, an AARP Public Policy Institute Report from late May suggests. In the report, AARP found that list prices for 25 top brand-name drugs had climbed an average of 81% since launch in the U.S., while the prices for those same drugs fell by an average of 13% in 19 other high-income countries.
The analysis also suggested that Medicare price negotiations are putting pressure on some medications’ list prices—however, those reductions to wholesale acquisition costs don’t seem to be influencing the industry’s pricing trajectory more broadly.
Editor's note: This story has been updated with a statement from PhRMA.