Texas can now apply to import lower-priced Canadian medications

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Texans struggling with skyrocketing medication costs could see relief under a new program that allows distributors to import cheaper drugs from Canada.

House Bill 25 creates the “Wholesale Prescription Drug Importation Program.” The state’s Health and Human Services Commission would contract with Canadian drug wholesalers and suppliers to bring safe, eligible prescription drugs to Texas consumers at prices far cheaper than U.S. wholesalers.

Although the law technically goes into effect on Sept. 1, federal drug regulators are moving at a glacial pace to set up programs with the states that want them. Texas won’t have its program fully designed until next year, much less approved by the U.S. Food and Drug Administration and implemented, state health officials say.

The Texas bill comes three years after former President Donald Trump authorized the safe importation of pharmaceuticals. Texas will join a handful of states that have applied for partnerships with Canada. So far, no state has been allowed to import a single dose from Canadian wholesalers.

Supporters of the program hope the introduction of a plan by Texas, the largest state so far to show interest in the program, will put pressure on the FDA to move on those applications.

With wholesale costs lower, prices at the register would be driven down, said Texas state Rep. James Talarico, D-Austin, the bill’s author.

The U.S. currently has a closed distribution system, in which retailers can only purchase medication from U.S. wholesalers — including those prescription drugs manufactured in another country — and does not allow any state discretion on which drugs to bring in.

The bill changes that only in the case of Canada, which has food and drug regulations and a drug track-and-trace system like those used by the U.S. to keep the supply chain secure.

The Texas measure passed with overwhelming bipartisan support in both the House and Senate.

State budget analysts say that the program will cost $20 million per year to administer, including hiring 25 people to run it. Other costs or benefits to the state cannot be determined yet, analysts say.

States are becoming increasingly impatient to get the program rolling after it was federally authorized in 2020.

When the program wasn’t implemented by 2021, President Biden directed the FDA to speed up the process. Florida, among the first states to apply for the program, has sued the FDA for its inaction.

Republican lawmakers who backed the plan said the risks to people who can’t afford the American medicines far outweigh the potential risks of importing those drugs.

“It's got to feel weird to see President Trump and President Biden on the same page … but it is so true,” said Texas House Human Services Committee Chair James Frank, R-Wichita Falls, who supported the bill. “And honestly there's probably other countries that we need to look at as well, but I think this is a great start.”

U.S. prescription drug prices are among the highest in the world and, by some calculations, around three times more expensive than in Canada, where basic health care is taxpayer-subsidized The United States is already the world’s leading importer of pharmaceuticals.

Canada does not include pharmaceutical coverage in its universal health care coverage, but it has regulated brand-name wholesale drug prices since the 1980s. The U.S. does not.

About one-fourth of U.S. adults say it’s difficult to afford their prescriptions, according to the Kaiser Family Foundation, and some estimates put that number at one-third. High drug prices disproportionately impact lower-income people and people of color — including Black and Hispanic people who are less likely to have health insurance than white Americans.

The Texas bill was roundly opposed by the pharmaceutical industry, which argues that a state-based program complicates streamlined federal processes by letting state officials or importers negotiate their own prices, pick their own drugs for the program, and take part in the security and labeling process.

Industry representatives also say it could threaten the security of the nation’s drug supply chain by sidestepping the U.S. government’s own track-and-trace distribution system, which documents a drug’s path from its earliest ingredients to the drugstore shelves.

Opponents also argued that the program would be difficult to implement because Canada is struggling with a shortage of some medicines and likely wouldn’t be able to meet the demand for them in the U.S.

The importation program has the backing of a range of Texas medical groups and health advocates — from the progressive group Every Texan, which advocates for the needs of lower-income residents, to hard-right conservative organization Texas Public Policy Foundation. The Texas Association of Health Plans, the AARP and Texans Care for Children also supports the bill.

Supporters dismissed pharma industry concerns as a fear of competition that would eat into their profits.

The argument that it sidesteps safety standards is false, Talarico said.

The only country included in the new federally authorized program is Canada, and the drugs imported from wholesalers in that country would have already been subject to their own secure tracking system before they ever hit the U.S., Talarico said. When they do, that information is available to the importer, who contracts with a lab to check it and then sends the Canadian tracking information and the results of the lab testing to the FDA — which runs it through its own standards before approving it for sale in the U.S.

Drugs from foreign countries are clearly being used safely and effectively by their own citizens, Frank said in the hearing.

“We’re not seeing, in Europe and Canada, people falling over because their drugs aren’t working,” he said.

To the contrary, it’s Americans who are dying because they can’t get their medicines at all, Talarico said.

A recent study predicted that among Medicare beneficiaries alone, some 1.1 million older Americans would die prematurely over the next decade because they couldn’t afford to take their medicines.

“As we speak, our constituents are choosing between their medication and their rent, their medication and their groceries … and going without,” Talarico said. “This is a life-threatening, dangerous status quo.”

Disclosure: AARP, Every Texan, Texans Care for Children, Texas Association of Health Plans and Texas Public Policy Foundation have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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