The Border Tax on Being American

This past Monday, the FDA announced that after years of lobbying and regulatory review, Colorado now has official approval to begin importing prescription drugs from Canada in an effort to lower costs for residents.

Most headlines treated this as a victory.

I read it as a confession.

A confession that everyone involved already knows American drug prices are detached from reality.

Let's pause for a second and think about what the federal government is actually saying with this decision.

First, they are acknowledging something that hardly needs saying: prescription drug prices in America are out of control.

Fair enough.

But the next part is where things get weird.

Rather than fix the pricing problem directly, the FDA has decided it’s easier to allow Colorado to purchase the exact same medications by price shopping across the border.

Think about that for a moment.

The FDA's solution to high drug prices is not to actually fix them.

It is permission to bypass the US supply chain and buy the same product elsewhere.

This is American innovation at its finest.

Needless to say, that struck me as completely absurd, so I started reading through Colorado's application.

The numbers are even crazier than I expected.

To be clear, Colorado isn't proposing to import generic knockoffs, compounded alternatives, or mystery medications manufactured in someone's basement.

The state's approved importation list includes many of the same brand-name drugs dispensed every day in pharmacies across America.

Drugs like:

According to Colorado's own application, here are some of the projected savings:

Based on past drug utilization, Colorado estimates the program could save the state approximately $46 million over the next three years.

Forty-six million dollars!!!

By buying the same drugs from Canada and importing them here.

Let me repeat that:

Colorado believes it can save $46 million simply by purchasing the same drugs from a different country.

Not better drugs.

Not newer drugs.

Not generic drugs.

The same drugs.

The same manufacturer.

The same active ingredient.

The same factory.

The same box.

The same drug.

The only thing changing is geography.

Imagine Ford sold an F-150 in Detroit for $90,000 and sold the exact same truck in Ontario for $45,000.

Same truck.

Same factory.

Same engine.

Same everything.

Now imagine the federal government spent twenty years creating a loophole program to import it across the border instead of asking Ford why Americans were paying double.

Nobody would celebrate that as a policy achievement.

They'd call it a workaround.

The first question everyone would ask is:

"Why is Ford charging Americans twice as much?"

Yet when it comes to prescription drugs, we've become so accustomed to the dysfunction that we barely notice how bizarre it is. We’re numb.

So instead of asking why the same medication costs dramatically less somewhere else, we congratulate ourselves for finding a way around the problem.

The FDA isn't approving Colorado because Canadian drugs are special.

They're approving Colorado because American prices are.

That's the entire story.

Nobody is celebrating that Colorado discovered a new medicine.

They're celebrating that Colorado found a cheaper invoice.

And somehow we've convinced ourselves that it's a healthcare breakthrough.

You already know where I stand on PBMs and their role in the American drug pricing circus.

But this particular story exists even beyond PBMs.

The uncomfortable reality is that America largely subsidizes pharmaceutical innovation for the rest of the world.

Other countries negotiate aggressively.

Governments set price ceilings.

Manufacturers accept lower profits because they want access to those markets.

Meanwhile, the United States generally allows much higher pricing.

The result is a strange global arrangement where the exact same drug can have dramatically different prices depending on which government negotiated the deal.

Whether you think that's fair or not is a separate discussion.

What matters here is that everyone involved understands the reality.

The manufacturers know it.

The governments know it.

The FDA knows it.

Colorado knows it.

Which is why this importation program is being pitched in the first place.

As a pharmacist, I genuinely hope Colorado succeeds.

If patients save money, that's a good thing.

If someone can finally afford medication because of this program, I support that outcome.

But I can't shake the feeling that this approval represents something much larger.

Because what is being celebrated as a breakthrough is, in reality, a workaround.

We didn't invent a new medicine.

We didn't discover a cure.

We didn't build a better healthcare system.

We simply received permission to buy the same drugs somewhere else.

And while we celebrate that permission, we continue to entrench ourselves in the very system that made it necessary.

Colorado's approval is being celebrated as progress.

Maybe it is.

But it is also an admission.

An admission that everyone involved understands American drug prices are disconnected from reality.

An admission that the exact same medications can be sold profitably for dramatically less money.

And an admission that, rather than solve the problem directly, we can just create a loophole.

What more can I say?

That’s American healthcare in a nutshell.

Giddy up.

Alec Wade Ginsberg, PharmD, RPh
4th-Gen Pharmacist | Owner & COO, C.O. Bigelow
Founder, Drugstore Cowboy