A new report concludes that if Vermont undertakes wholesale importation of prescription drugs from Canada, such a program could achieve cost savings for the state’s commercial payers. But achieving benefits requires an emphasis on program mechanics, and Vermont’s own effort is far from a done deal — with the state’s largest health insurer pointing out that administrative costs and hurdles, which may be significant, are not quantified in this feasibility study, AIS Health reported.
The state’s 14-page report on the preliminary design of the “Canadian Rx Drug Import Supply Program,” written with the National Academy for State Health Policy’s (NASHP) technical assistance, estimates savings of $1 million to $5 million annually, based on just 17 high-spend drugs identified for two of the state’s three major carriers.
Blue Cross and Blue Shield of Vermont was among the three major carriers in the state asked to voluntarily identify top-spend prescription drugs for the second quarter of 2018, excluding drugs such as narcotics, biologics, and IV and infused drugs that are not eligible for importation under federal law. MVP Health Care also provided data, but Cigna Corp. opted not to do so.
While NASHP Executive Director Trish Riley declined to identify by name the 17 high-spend drugs contained in the report, she says they are used for contraception, chronic obstructive pulmonary disease, diabetes, hepatitis C, HIV/AIDS, multiple sclerosis, arthritis and venous thromboembolism prevention, along with one cancer drug.
Payers also were asked to calculate net savings from importation, with NASHP adding a “conservatively-high estimated mark-up” for program administration of 45% on top of the Canadian price. To determine savings, plans were asked to determine their net spend (net of rebates) on the 17 drugs, comparing it to the would-be net spend for the same drugs if they were imported from Canada with a 45% mark-up.
Even with the 45% mark-up, plans reported savings ranging from $2.61 to $2.82 per member per month, or $1 million to $5 million annually, the report says. But it notes these savings for commercial payers, post mark-up, don’t take into consideration the state’s costs in operating the importation program.
Broadly speaking, the Vermont Blues plan supports efforts to reduce prescription drug costs for its members, says its spokesperson Sara Teachout. Yet she notes the complexity of the issue, pointing out that “some of the administrative hurdles [for Canadian drug importation in Vermont] are significant.”