Vermont thumbs its nose at Trump with a new law blessing Canadian drug imports

Vermont's government has passed a law directing a state agency to design a drug importation program. (Wikipedia/Jonathanking)

With drug prices continuing their upward climb, states across the U.S. have explored a range of options to take the issue into their own hands. Now, lawmakers in Vermont have passed a law—the first of its kind nationwide—that would allow wholesalers to import drugs from Canada to bring costs down. The catch? It'll need approval from an administration unfriendly to the idea.

Gov. Phil Scott on Wednesday signed Senate Bill 175, approved by the state legislature last week, according to multiple reports. Specifically, the bill directs a state agency to design a wholesale importation program from Canada that complies with U.S. laws. 

But even with Gov. Scott's signature, the program won't go anywhere without a blessing from Alex Azar, secretary of the U.S. Department of Health and Human Services.

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And the state is likely to run into resistance. Recent indications are that the Trump administration strongly opposes drug importation as a lever to bring down U.S. pharmaceutical prices. On Monday, Azar called it a "gimmick" that will risk patient safety and not lower prices. He said Canada isn't a large enough market to affect U.S. prices, and that there can be no assurances drugs coming from the country are safe and effective. 

As industry watchers know, it's far from the first time importation has been pitched as a strategy to lower drug costs.

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In an earlier push, Reps. Elijah Cummings and Peter Welch met with Trump to talk up their importation plan; Cummings said afterward the president seemed enthusiastic. But in the months that followed, Cummings said he only got "radio silence" from the president. According to the National Association for State Health Policy, Vermont's law is the United States' first to allow importation from Canada.

Last week, the Trump administration rolled out its drug pricing plan, and it left out importation and another popular drug pricing proposal, Medicare price negotiations. Instead, the plan pitches more competition, more negotiation, incentives to lower list prices and lowering out-of-pocket costs.

Many industry watchers felt the administration's plan spared pharma any real pricing reform. Dave Fitzhenry, managing partner at consulting group Trinity Partners, recently told FiercePharma he feels it will be "business as usual" for industry players in the short term.