Vermont is the first state in the country to approve a program commissioning the importation of prescription drugs from Canada with the passage of a bill approved by the House and Senate and signed into law May 16 by Republican Governor Phil Scott.

As several other US states have been working on similar bills, Vermont was the first state to sign such legislation into law. The bill was reportedly based upon legislation previously drafted by National Academy for State Health Policy; the organization estimated that the cost of prescription drugs in Canada are about 30 percent lower.

The bipartisan bill, which had unanimous support in the Senate and a 141-2 vote in the House, calls for the development of a “wholesale prescription drug importation program” that meets the following conditions:

(1) designate a State agency that shall either become a licensed drug wholesaler or contract with a licensed drug wholesaler in order to seek federal certification and approval to import safe prescription drugs and provide significant prescription drug cost savings to Vermont consumers;

(2) use Canadian prescription drug suppliers regulated under the laws of Canada or of one or more Canadian provinces, or both;

(3) ensure that only prescription drugs meeting the U.S. Food and Drug Administration’s safety, effectiveness, and other standards shall be imported by or on behalf of the State;

(4) import only those prescription drugs expected to generate substantial savings for Vermont consumers;

(5) ensure that the program complies with the tracking and tracing requirements of 21 U.S.C. §§ 360eee and 360eee-1 to the extent feasible and practical prior to imported drugs coming into the possession of the State
wholesaler and that it complies fully after imported drugs are in the possession of the State wholesaler;

(6) prohibit the distribution, dispensing, or sale of imported products outside Vermont’s borders;

(7) recommend a charge per prescription or another method of support to ensure that the program is funded adequately in a manner that does not jeopardize significant consumer savings; and

(8) include a robust audit function.

During his campaign, President Donald Trump advocated for the ability for Americans to purchase prescription drugs from other countries including Canada; he has appeared to abandon this idea, illustrated by a recent address given by Trump on May 11 discussing his “American Patients First” plan to seek lower drug prices. The speech did not make any mention of allowing the purchase of imported drugs and focused instead on giving “private entities more tools to negotiate better deals on behalf of consumers, insurers and employers,” according to a report from the New York Times.

While the Trump administration has not publicly commented specifically on the bill’s enactment, Health and Human Services Secretary Alex Azar described importing drugs from other countries as a “gimmick” on Monday.

“The United States has the safest regulatory system in the world. The last thing we need is open borders for unsafe drugs in search of savings that cannot be safely achieved,” Azar said according to Politico. “You can’t improve competition and choice in our drug markets with gimmicks like these — you have to boost competition and price transparency.”

Azar also argued that “Canada simply doesn’t have enough drugs to sell them to us for less money, and drug companies won’t sell Canada or Europe more just to have them imported here.” He claimed that the FDA also has concerns that there is no “effective way to ensure drugs coming from Canada really are coming from Canada, rather than being routed from a counterfeit factory in China.”

Azar was the president of the U.S. division of global pharmaceutical company Eli Lilly & Co. from 2012 to 2017.

The law was met with opposition from the Pharmaceutical Research and Manufacturers of America, (PhRMA) as spokeswoman Caitlin Carroll called promotion of the Vermont legislation “highly irresponsible” and warned of an increase in counterfeit drugs.

An amendment put forth by Sens. Bernie Sanders (I-VT) and Amy Klobuchar (D-MN) last January sought to allow for the purchase of drugs from Canada, but failed in a 46-52 vote. In February 2017, Sanders and Sens. Cory Booker (D-NJ) and Bob Casey (D-PA) introduced the Affordable and Safe Prescription Drug Importation Act “to help lower the rising cost of prescription drugs by allowing Americans to import safe, low-cost medicine from Canada and other advanced countries.”

Vermont’s new law is subject to federal approval, as it specifies that Vermont’s importation program must be developed by the Secretary of Human Services, and submitted to the House Committees on Health Care and on Ways and Means and the Senate Committees on Health and Welfare and on Finance, by January 1, 2019. A subsequent formal request would need to be submitted to the Department of Health and Human Services by July 1, 2019 for certification.