Canada’s Price Controls Make Its Drugs Cheaper. The US Should Impose Them Too.
The FDA just announced that it will allow the state of Florida to import cheaper pharmaceuticals from Canada, which imposes price controls on its drugs. The FDA’s move is welcome but raises the question: Why doesn’t the US cap the price of medicines too?
Even small uses of federal regulatory authority can bring down pharmaceutical costs. (SDI Productions / Getty Images)
On Friday, January 5, the US Food and Drug Administration (FDA) announced that for the first time ever it would allow a state government to import foreign pharmaceuticals. The agency approved Florida’s proposal to buy cheaper medications directly from Canadian wholesalers for use in state-operated care systems, such as prisons, government health clinics, and certain Medicaid programs.
FDA approval comes after more than two decades of federal deliberation about the use of foreign importation to circumvent high drug prices in America. The first such attempt was a law passed during Bill Clinton’s administration, which formed a legal but untested pathway. This statute was overhauled in 2003, creating the current system, known as the Section 804 Importation Program (SIP).
Even as prescription prices skyrocketed, the law went untried for over seventeen years because any planned SIP would need approval first from the secretary of Health and Human Services, then from the FDA. It was not until late 2020 that a proposal cleared the first hurdle, when Trump appointee Alex Azar gave the state of Florida the go-ahead.
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