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The Trump administration took a step Wednesday toward allowing importation of medicines from Canada, an action the president has advocated as a way to bring cheaper prescription drugs to Americans, but the pharmaceutical industry was quick to resist the move.

The U.S. Department of Health and Human Services (HHS) said it and the Food and Drug Administration will propose a rule that will allow it to authorize states and other groups to pursue pilot projects related to importing drugs from Canada.

The agency also said it would allow drugmakers to bring drugs that they sell more cheaply in foreign countries into the United States for sale here, potentially enabling them to sell below their contracted prices in the United States.

The announcement comes as President Donald Trump aims to address the world’s highest drug prices ahead of the 2020 elections and after several high-profile policy failures.

Reuters has previously reported that the administration is considering broadening its plans to link the cost of some drugs for the government Medicare program to an international pricing index.

The importation idea needs to be proposed and then finalized by Health and Human Services. The largest U.S. pharmaceutical and biotech companies said they opposed the idea of importation through their lobbyists PhRMA and BIO.

“There is no way to guarantee the safety of drugs that come into the country,” PhRMA Chief Executive Officer Stephen Ubl said.

Drug industry shares were slightly higher, with the NYSE Arca Pharmaceutical Index .DRG up 0.2 percent versus a broader flat market.

HHS Secretary Alex Azar said he has had prior discussion with Canada about importation and that it would be up to the states, pharmacies and distributors, who are expected to pursue the importation through trial models, to navigate the issues. Read more

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