Vermont First in the Nation to Approve Rx Drug Importation from Canada

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Vermont is the first state  in the nation to approve importation of less-costly prescription drugs from Canada.
For the first time in the United States, obtaining low-cost prescription drugs from Canada is one step closer to reality today following the Vermont state legislature’s landmark enactment of S.175. Vermont Gov. Philip Scott signed the bill into law on May 16, 2018.
Based on the National Academy for State Health Policy’s (NASHP) model importation legislation, S.175 creates a wholesale importation program to purchase high-cost drugs through authorized wholesalers, who will purchase the drugs in Canada and make them available to Vermonters through an existing supply chain that includes local pharmacies.
The bill passed the Vermont House by a 141-2 vote and the Senate unanimously approved it yesterday.
Vermont Senate President Pro Tem Tim Ashe commented, “It is outrageous that a commonly used medicine like Lipitor costs 46-times more per pill in the United States than in Canada. In fact, legislative staff determined that importing just two diabetes drugs from Canada would save the state’s teacher health insurance plan more than $500,000 each year.
State Sen. Claire Ayers and state Rep. Bill Lippert and Ashe worked to carefully shepherd the bill through both houses. The bill requires Vermont’s Agency for Human Services, in consultation with stakeholders and the federal government, to design and submit an importation proposal to the state legislature on or before Jan. 1, 2019 and further requires the agency to submit its proposal to the federal government on or before July 1, 2019, for final approval. The importation program must be operational within six months of approval of the financing strategy, certification, and federal government sign-off.
The proposal will identify the high-cost drugs to be imported from Canada and detail how the program will be implemented. The legislation directs the agency to recommend a financing mechanism, either through a per-prescription charge or another method, to ensure the program is funded in a manner that does not jeopardize the significant consumer savings that are expected. Based on that recommendation, the legislature will enact a funding mechanism during its next session.
Giving the Agency for Human Services time to develop an implementation plan guarantees the legislature will have the information needed to establish the funding mechanism and address questions that arose during legislative deliberations, including what provisions can be in adopted to make sure that Vermont’s eligibility for the federal 340B drug discount program, which requires drug manufacturers to provide outpatient drugs to eligible health care organizations at significantly reduced prices, is not jeopardized.
“In the absence of federal action to control the cost of prescription drugs, states can’t wait, they need to control drug costs now for all of their citizens,” said NASHP Executive Director Trish Riley. “Vermont’s legislature has taken an important step in lowering prescription drug prices that we hope will serve Vermonters well and inform the federal policy debate.”
Across the country, a total of nine legislatures introduced drug importation bills this year. While Utah did not enact its proposed importation law, its legislature requested the state’s executive branch to develop a proposal so the legislature could, based on the proposal, re-introduce a wholesale importation bill next session. Utah’s study and Vermont’s implementation planning process are similar in their design and approach.
NASHP is working with states to advance wholesale importation programs that can be approved by the federal government and implemented to generate savings and guarantee safety to the citizens they serve.
For more information on drug importation, read Is It Safe and Cost-Effective to Import Drugs from Canada?