Vermont Legalizes Importing Canadian Drugs, But HHS Must Approve Plan

May 18, 2018

Vermont has become the first state to establish a program to allow the wholesale importation of prescription drugs from Canada.

The new law is based on model legislation from the National Academy for State Health Policy, which has been introduced in eight states this year.

Must be approved by HHS:  Vermont must obtain the appropriate federal approval, waiver, or exemption under the federal 340B Medicaid drug pricing program, demonstrating that it meets certain safety and cost savings, before the measure can be implemented.

It will be open to employersbut only in Vermont.  The Vermont Agency of Human Services is required to “engage” with employers and develop a registration process for health insurance plans that are willing to participate in the program.  However, the law prohibits the distribution of imported drugs outside of Vermont.

The law is a test for the Trump administration, which did not include the concept in its new drug pricing plan despite previous backing by President Trump.  HHS Secretary Alex Azar recently said, “you can’t improve competition and choice in our drug markets with gimmicks like these—you have to boost competition and price transparency.”