With FDA backing, Colorado says state will save money by importing drugs from Canada

Colorado became the second U.S. state to receive FDA approval to import lower-cost prescription drugs from Canada. The program, approved Monday, targets 20 specific medications, including Ozempic, with Governor Jared Polis stating the state hopes to save US$46 million in drug costs.

Did You Know? U.S. list prices for medications are generally more than three times the price in Canada for the same drug.

How much can Colorado save on medications?

The state’s approved list includes the Type 2 diabetes drug Ozempic from manufacturer Novo Nordisk. According to the list, Colorado would normally pay US$502.59 for a four-week supply of 0.25 mg and 0.5 mg formulations, but would pay US$275.13 if imported from Canada.

This represents a 45-per-cent discount. Governor Jared Polis stated that drug manufacturers must stop “ripping off consumers with inflated drug costs by putting profits over people.”

Why is there a price difference between the U.S. and Canada?

Canada and other nations typically maintain lower prices through government price controls. This includes group negotiations between drug makers and public drug plans when new products enter the market.

The Trump administration has supported the FDA’s import program while pursuing a “most-favoured nation” policy. This policy aims to lower American prices by driving global prices higher to address disparities between jurisdictions.

Expert Insight: Samantha Carter notes that the primary tension lies in the scale of the two markets. With the U.S. being nearly nine times larger than Canada, the stakes involve whether a domestic Canadian supply chain can withstand external demand without triggering local shortages.

Will this cause drug shortages in Canada?

Health Canada stated Wednesday that drugs intended for Canada cannot be sold abroad if doing so would cause or worsen a shortage. Businesses wanting to export must demonstrate to the regulator that shortages will not occur.

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Angelique Berg, CEO of Vital, said Canada’s supply chain is built for domestic use and cannot supply the U.S. She believes it is “highly unlikely” the program will result in sustained exports due to regulatory safeguards and lack of manufacturer participation.

Erin Polka of Innovative Medicines Canada added that experience in Florida indicates similar measures have not resulted in significant supply diversion.

What happened with Florida’s similar program?

Florida was the first state approved for this FDA program in 2024. Despite the approval, no drugs were actually shipped through the program over the following two years.

Drug companies reported they had not been working with Florida’s state government during that period. Innovative Medicines Canada previously told The Globe and Mail it was unaware of any companies collaborating with Florida.

What may happen next?

The pharmaceutical industry could be affected by the renegotiation of the United States-Mexico-Canada Agreement. Ottawa has already established a task force this spring to make Canada a more attractive market for international drug companies.

Novo Nordisk has argued before parliamentary committees that provinces should restrict cross-border pharmacy sales. It remains unclear if manufacturers will collaborate with Colorado, as several companies on the import list declined to comment.

Frequently Asked Questions

Which drugs is Colorado approved to import?
The FDA approved a list of 20 specific drugs, which includes the Type 2 diabetes medication Ozempic.

How much does Colorado expect to save?
The state hopes to save US$46 million in state drug costs if the plan succeeds.

Does the program include generic drugs?
While generic versions of Ozempic became legal in Canada this year, Colorado’s approved list does not specify any generic products.

Do you think importing medications from other countries is a sustainable way to lower healthcare costs in the U.S.?