In recent years, states have been exploring innovative avenues to address rising healthcare costs and ensure access to affordable medication for their residents. One idea gaining traction involves pursuing authorization from the US Food and Drug Administration (FDA) for importation programs under Section 804 of the Federal Food, Drug, and Cosmetic Act (FDCA) to import prescription drugs from Canada. These “Section 804 Importation Programs” (SIPs), if approved, would enable states to import prescription drugs from Canada, often at significantly lower prices than those available in the United States.
After years of legal and other challenges to the rule, on January 5, 2024, the FDA authorized Florida’s SIP proposal. While eight other states have laws that permit drug importation, and six of them are seeking FDA approval, this is the first time that the FDA has approved a state entity to import drugs from another country. Following Florida’s example, Colorado and other states are moving forward with their own SIP plans.
The price of prescription drugs has brought scrutiny to the entire drug supply chain. Congress and other policymakers continue to seek opportunities to lower costs for patients and the federal government. Pharmacy benefit managers (PBMs) are a key stakeholder in the drug supply chain, functioning as intermediaries between insurance providers and pharmaceutical manufacturers.
Congress and other stakeholders are raising questions about PBMs’ operations and their impact on drug prices and out-of-pocket costs for patients. In the 118th Congress, six key committees have advanced legislation that would increase PBM transparency and reporting obligations and modify other business practices. In the House, three committees combined to introduce H.R. 5378, the Lower Costs, More Transparency Act, which passed the House December 11, 2023. Read on as we review and compare policies in the Lower Costs, More Transparency Act and the PBM bills considered individually by the relevant House and Senate committees.
The price of prescription drugs has brought scrutiny to the entire drug supply chain. Congress and other policymakers continue to seek opportunities to lower costs for patients and the federal government.
Pharmacy benefit managers (PBMs) are a key stakeholder in the drug supply chain, functioning as intermediaries between insurance providers and pharmaceutical manufacturers. PBMs administer prescription drug benefits and seek discounts for insurers as standalone plans, such as Medicare Part D plans, or as entities embedded in commercial insurance products, including Medicare Advantage, Medicaid Managed Care Organizations and employer-sponsored coverage.
PBMs are under increased scrutiny from policymakers due to the perceived opaqueness of their operations and their perceived role in increasing drug costs. As part of this scrutiny, Congress and other stakeholders are raising questions about PBMs’ impact on drug prices and out-of-pocket costs for patients. In the 118th Congress, several key committees have advanced legislation that would increase PBM transparency and reporting obligations and modify other business practices.
President Biden’s July 9, 2021, Executive Order—which seeks to increase competition throughout the American economy—takes aim at prescription drug prices. In this article, published in Law360, McDermott partner Emily Jane Cook says Biden’s focus on drug prices is unsurprising given the “significant public interest and frustration” with drug costs.
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