Former HHS official behind Florida’s new Canadian drug import plan

The Food and Drug Administration’s unprecedented approval of Florida’s plan to import drugs from Canada was made possible only after Alex Azar, as the Trump administration’s Health and Human Services secretary, certified that bringing medicines over the border could be done safely.

Azar made the historic declaration in September 2020, just two months before his boss, former President Donald Trump, lost reelection.

Now, Azar’s involved in the business of making importation happen. He is chairman of the board of LifeScience Logistics, a Dallas-based company that Florida is paying as much as $39 million to help manage its Canadian drug importation program, not including the cost of drugs.

LifeScience officials confirmed Azar’s position but didn’t respond to questions about how much he is paid or whether he’s involved in the Florida work. Azar didn’t return messages left with his employers or sent to a personal email address.

The revolving door between government and private sector jobs is well documented. It’s common for top U.S. officials in both parties to leave government service for what are often far better-paid jobs or board seats at companies in the industries they formerly regulated.

About 57% of presidential Cabinet-level officials later served on corporate boards of directors, according to a 2019 study by researchers at Boston and Harvard universities in The Journal of Politics, which examined 84 Cabinet members who served from 1992 to 2014.

“In general, we favor Cabinet secretaries not going into industries which they once regulated, because the possibility of conflicts of interest are unavoidable,” said Robert Weissman, president of Public Citizen, a government watchdog group.

He called Azar’s case atypical because his approval of drug importation was opposed by the pharmaceutical industry, in which Azar was formerly employed. Drugmakers argue the policy puts patients at risk of consuming counterfeit medicines. Azar joined the LifeScience board in January 2022, one year after the end of Trump’s term and about a year after Florida contracted with LifeScience in late 2020.

Katie Hernandez, a spokesperson for LifeScience Logistics, said in a statement that the company, which manages nearly 6 million square feet of warehouse storage across 11 states, signed its deal with Florida before Azar joined the board.

Ivana Katic, assistant professor of organizational behavior at the Yale School of Management, said that Azar’s position at LifeScience “can appear as a conflict of interest” because his policy decision as HHS secretary later benefited him professionally.

Azar was a deputy secretary at HHS during the George W. Bush administration before joining pharmaceutical giant Eli Lilly and Co. as a top executive in 2007, remaining there until months before joining the Trump administration.

Weissman, who supports drug importation, said he doubts Azar had any personal benefit in mind before his decision. Florida Gov. Ron DeSantis had pushed Trump to authorize importation from Canada, and the former president had said he supported importation before Azar certified it was safe.

Canadian drug importation has been the subject of decades of debate. While the U.S. does not regulate most drug costs, Canada does, generally resulting in lower prices than across the border.

In 2018, Azar called importation a “gimmick” because Canada’s pharmaceutical market isn’t large enough to meet U.S. demand. Indeed, the Canadian government has repeatedly warned the U.S. against importation, promising to block any plan that poses a risk of causing shortages in Canada.

The country has implemented regulations “to prohibit certain drugs intended for the Canadian market from being sold for consumption outside of Canada if that sale could cause, or worsen, a drug shortage in Canada,” Health Canada, which regulates drug safety, said in a Jan. 8 statement after the FDA’s approval of Florida’s plan. “This includes all drugs that are eligible for bulk importation to the U.S., including those identified in Florida’s bulk importation plan, or any other US state’s future importation programs.”

Under its contract with Florida, LifeScience Logistics must buy drugs from Canadian suppliers, contract with a lab to verify their authenticity, store the medicines, and ship them to state agencies for distribution. LifeScience built a 100,000-square-foot facility in Lakeland, Florida, to warehouse drugs imported from Canada.

President Joe Biden supported drug importation during his 2020 campaign, but after the election his administration moved slowly to advance the process. Colorado has an importation application pending with the FDA, while several other states have passed laws allowing for importation. DeSantis has accused the Biden administration of slow-walking a decision, and his administration filed a lawsuit over the FDA’s delay.

Florida’s importation plan will save the state up to $180 million in the first year of the program, the state said. The importation program wouldn’t aid consumers directly. It’s instead aimed at helping state agencies, including its prisons, health department, and Medicaid program, obtain lower-cost drugs for HIV and AIDS, diabetes, and other conditions.

Related: Florida becomes first state allowed to import prescription drugs from Canada

Florida’s plan still faces many hurdles. On top of Canada’s reluctance to participate in U.S. importation programs, some drug manufacturers have deals with Canadian wholesalers preventing them from exporting medicines, and the FDA decision is likely to face a legal challenge by drugmakers.

The drug industry’s major lobbying group, the Pharmaceutical Research and Manufacturers of America, or PhRMA, previously sued to stop Azar’s importation decision. It’s expected to file suit to block Florida’s program as well.

A PhRMA spokesperson declined to comment on Azar’s role.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.