The US Department of Health and Human Services (HHS) is proposing that state governments allow drugmakers to reimport their products from Canada, where they are generally cheaper due to the country’s single-payer program, and make them available to US patients.

HHS Secretary Alex Azar, a former executive of Eli Lilly, called the proposal an “historic step forward in an effort to bring down drug prices at out of pocket costs.”

Under a pilot project, US states and non-federal government entities could apply to the Food and Drug Administration (FDA)  to import certain prescription drugs from Canada, through wholesalers or pharmacies – provided they have been approved by the northern neighbor’s authorities.

Some types of drugs would not be eligible, including controlled substances, biologics and intravenously injected drugs. Also excluded would be drugs subject to a risk evaluation and mitigation strategy, as well as medicines drugs injected into the spinal column or used in ophthalmic injectables.

Azar said eligible drugs would have to be relabeled and undergo testing to ensure they are not degraded. The FDA has released a draft guidance that would allow drugmakers to voluntarily import their own product from Canada.

Press reports, however, quote the Canadian ambassador to the US, Gary Albert Doer, as saying the market there is too small to satisfy Americans’ demand for cheaper drugs. Doer said Canada represents only 2% of global drug consumption, compared with 44% for the US.

Many Canadians are sure to disapprove of the plans, fearing shortages of popular medicines if these are diverted southward. The drugs are thought likely to command higher prices in the US, where there is no public health insurance apart from elder care agency Medicare and the health program for low income patients, Medicaid.