Reciprocity of regulatory approvals: A smarter way to curb prescription drug costs

The Trump administration last week announced steps that could lead to the importation of prescription drugs from Canada, where prices are lower. It is a goal supported by President Donald Trump, but long opposed by many Republicans.

This latest initiative would allow states, pharmacies and drugmakers to seek federal approval for demonstration projects to import drugs that are similar or identical to drugs already approved by the U.S. Food and Drug Administration. But the prospects for this plan are uncertain, given the failure of the administration's last two proposals to lower drug prices, which involved linking the prices of certain drugs to an international pricing index and requiring transparency by revealing the price on a drug's advertising.

Earlier proposals to import lower-priced drugs from Canada haven't been successful. In 2003, Congress authorized the Health and Human Services secretary to issue regulations to permit the importation of prescription drugs from Canada — but only after the secretary certified to Congress that such imports would "pose no additional risk to the public's health and safety" and "result in a significant reduction in the cost of covered products to the American consumer." No secretary has made this certification.

Since 2003, federal legislators and several states have made various other proposals for drug importation from Canada, but Canadian officials have long warned against drug importation, citing concerns about shortages. "Canada cannot be a drugstore for the United States of America; 280 million people cannot expect us to supply drugs to them on a continuous, uncontrolled basis," then-Health Minister Ujjal Dosanjh said in 2005.

Instead of pushing for piecemeal steps that will continually run into political opposition and legal challenges, the administration should take a broader approach — by establishing reciprocity of drug approvals by foreign regulatory agencies whose regulatory evaluations are comparable to the FDA's.

That would lower regulatory costs and increase competition and access to a greater number of drugs on the market in the U.S. It would also benefit patients directly, because the harm caused by FDA delays in approving certain new drugs already available in other industrialized countries are well documented.

Proposals for reciprocity are not new. The House of Representatives in 2003 passed the Pharmaceutical Market Access Act, which would have required the Health and Human Services secretary to issue regulations permitting pharmacists, wholesalers and individuals (for personal use) to import prescription drugs into the United States from 25 countries, including Australia, Canada, the European Economic Area, Israel, Japan, New Zealand and South Africa.

Sen. Ted Cruz, R-Texas, and then-Rep. Ron DeSantis, R-Fla., in 2015 and 2016 introduced a bill to establish a reciprocal marketing approval process that would have allowed the sale in the U.S. of a medical product not approved by the FDA if it had been approved in select other countries with drug approval requirements comparable to those in the U.S. Twenty senators introduced a similar bill in 2017.

The National Academy of Sciences, Engineering and Medicine in its 2018 report "Making Medicines Affordable: A National Priority" included a recommendation that Congress give the FDA the authority to seek reciprocal drug approval arrangements for generic drugs and biosimilar drugs among the regulatory agencies of the U.S., the European Union and countries including Australia, Canada, Japan and New Zealand.

Reciprocity with nations that have comparable drug approval regimes would cause approval in those countries to trigger approval in the U.S. upon application by the drug manufacturer or licensee (subject to approved labeling). This would make more drugs available sooner in the U.S., increase competition and put downward pressure on prices. It could also help alleviate shortages in the U.S. of certain critical drugs, like generic injectable medications commonly used in hospitals, cancer drugs, anesthetics and antipsychotics for psychiatric emergencies. Hospitals are scrambling to find substitutes, and the FDA is severely limited in what it can do to address this problem.

Most previous attempts by the Trump administration and legislators have involved some form of price controls, which inhibit innovation and spur workarounds by industry. If Trump is committed to reducing drug prices and increasing availability, establishing reciprocity in regulatory decisions would be a good way to get there.