After seven years of planning and applying and reapplying and waiting, Colorado last week won federal approval to import lower-cost prescription drugs from Canada to sell in Colorado pharmacies.
To do this, the state had to find a company to act as the buyer in Canada and the importer to the United States. Then it had to set up a testing system to confirm that the drugs are what their Canadian labels say they are. Then it had to set up another system to relabel the drugs, noting that they had been imported under the program. Then it had to respond to hundreds of questions, comments and concerns from officials at the Food and Drug Administration to finally win approval for the program.
And, believe it or not, that all was actually the easy part.
Now comes the much tougher task: persuading pharmaceutical manufacturers to work with the program when they could just say no and continue to sell higher-priced drugs to Coloradans and their insurance companies.
“It’s been a long, hard road to get what should be simple approval,” Gov. Jared Polis said in an interview this week. “We are after all talking about drugs that are made in the exact same factories, shipped to different places, and we want to simply bring them back in.”
Why drugs cost less in Canada
Pharmaceutical pricing is famously mystifying, and this is readily apparent in the price gap between drugs sold in Colorado and those sold in Canada, where the national government imposes controls to keep prices down.
Colorado is seeking to import 20 drugs from 10 manufacturers. (You can see the list here.)
It includes TV-ad-famous drugs Ozempic and Eliquis, as well as lesser known medicines like the leukemia drug Sprycel. The state says the latter drug could be delivered to Coloradans for 68% less if it were imported from Canada, the biggest savings in the group. Three other drugs could see at least a 50% reduction, according to the state.
Overall, the state estimates that Coloradans would save $46.2 million over the program’s first three years through lower prescription costs and lower insurance prices. These savings would be felt by people who have private health insurance. The state budget would not see much impact because Medicaid can already purchase drugs at Canada-level prices.
“This is an uphill battle, and it’s rigged that way,” Polis said. “Really, Americans are getting ripped off on prescription drugs.”
Second state to win federal approval
Colorado’s is the second state drug-importation program to win federal approval. Florida received its approval in 2024, but the program is stalled and has not imported any medicine.
The Canadian government poses one challenge. It has said it will not allow drugs to be exported from Canada “if this could cause or worsen shortages here.”
“The government’s position is that importing large quantities of drugs intended for the Canadian market is not a solution to high drug prices in other countries,” the Canadian government wrote in a statement in 2024 when Florida’s program won approval.
The drugs’ manufacturers represent, perhaps, a bigger challenge.
Colorado has been trying for years to persuade drug companies to play ball. In 2023 correspondence with the FDA, posted as part of the state’s application documents, Lauren Reveley, the state’s Drug Importation Program manager, provided a list of 23 manufacturers the state had contacted to see if they would participate in the import program. None said yes.
Of the 10 manufacturers whose drugs Colorado is now trying to import, eight were included on the list. Three of those eight were a firm no — a typical response: “Viiv Healthcare is not interested in engaging in this program as we maintain a program like this could threaten the integrity of the U.S. supply chain and the safety of U.S. consumers.”
One more just never responded to the state’s emails, while two others answered initially but then ghosted Colorado officials. Another company’s response was listed as pending. And then there was Gilead Sciences, which told state officials that it “would appreciate the opportunity to speak with you to discuss your inquiry and explain our rationale in greater detail.” Reveley then added the note: “A follow up meeting … did not result in further negotiation.”
The pharmaceutical industry broadly has opposed drug importation, raising concerns about safety and whether states will be able to verify what they’re getting from Canadian suppliers.
New phase of outreach
Marc Williams, a spokesperson for the Department of Health Care Policy and Financing, which is overseeing the importation program, said the state is beginning a new phase of outreach to drug companies now that it has federal approval.
“We are looking forward to working with innovative companies who want to help Coloradans save money on their prescription medications,” he wrote in an email.
Polis echoed this in his interview with The Sun.
“It was all theoretical when we couldn’t re-import the drugs,” he said. “Now we can, and so we are pursuing every lead where there are excess prescription drugs in Canada.”
At this point, you may be wondering: Why does Colorado have to work with the manufacturers at all? Why not just cut them out and get the lower-cost drugs from Canadian distributors?
Well, it turns out that drug companies have anticipated your question and have blocked the move.
In a separate 2023 letter included in those application documents, HCPF’s then-executive director Kim Bimestefer wrote to the feds that drug companies have clauses in their contracts with Canadian distributors “that expressly prohibit the exportation of their products to the U.S.”
“Direct negotiation with manufacturers is the only path forward,” Bimestefer wrote.
Polis framed it slightly differently, saying that Colorado doesn’t need drugmakers to directly participate in the program but does need them to at least stand down on enforcing the contract provision banning export.
“There could be threats from manufacturers to, for instance, distributors that they sell to in Canada that don’t have permission in their contracts to sell the United States,” he said. “It’s not a categorical thing, but, generally speaking, if there are any pharmaceutical companies that are supportive, it would free up folks that are contracted to them to work with us.”
If, after a few months, Colorado has been unable to find companies willing to work with the state, Polis said his administration could go back to the feds and file for another exemption to drug importation law that allows the state to procure medicines from what he called “a secondary source.”
“There is a potential for another waiver as well,” he said.