US Unveils Proposed Rules to Allow Some Canadian Drug Imports

December 18, 2019

Through a Notice of Proposed Rulemaking and a draft guidance for industry, the FDA will seek request for comment on 2 pathways. One would allow states to submit proposals to the FDA to allow the importation of small molecule brand-name medicines sold at retail pharmacies. The other is a draft guidance for industry, which would let manufacturers import the same versions of FDA-approved drugs they now sell in foreign countries.

The FDA and HHS will unveil a plan Wednesday to allow certain prescription drug imports from Canada—but one that leaves out, for now, many specialty medications and other therapies for chronic disease that cost patients the most.

Through a Notice of Proposed Rulemaking and a draft guidance for industry, the FDA will seek request for comment on 2 pathways. One would allow states to submit proposals to the FDA to allow the importation of small molecule brand-name medicines sold at retail pharmacies— typically ones that have rebates attached to them, according to HHS Secretary Alex Azar, who briefed reporters on the plan Tuesday.

However, the other document released Wednesday is draft guidance for industry, which would let manufacturers import the same versions of FDA-approved drugs they now sell in foreign countries. Under this pathway, drugmakers would use a new National Drug Code (NDC) and sell these drugs in the United States at cheaper prices.

The FDA is aware that some drugmakers want to offer imports but are not able to because of having different NDCs, Azar said. The draft guidance aims to clarify how that can be accomplished; however, different NDCs will not be available for use by biosimilar manufacturers, he said.

Taken together, the plans aim to increase access, lower drug costs, and stimulate competition, administration officials said. “This is a historic first step,” said Azar.

However, Azar could not quantify how much could be saved, either by states or consumers.

The importation proposal was first raised in July, and Azar said late Tuesday the plans are consistent, for the most part, between then and now.

Under the pilot plan for states, controlled substances, intravenous or infused drugs, biologics, or drugs with risk evaluation and mitigation strategies are not eligible for importation.

The proposed rulemaking targets Section 804 under the Federal Food, Drug, and Cosmetic Act (FFDCA), which regulates US prescription drugs. Section 804 already gives the HHS secretary the authority to create regulations to allow pharmacists and wholesalers to import unapproved prescription drugs from Canada, as long as the secretary certifies that the program would create no additional risk to health and safety and would lower costs.

Until now, it has not been attempted. But faced with rising drug costs in state-funded programs like Medicaid or in correctional systems, some states have passed laws allowing Canadian drug imports.

Florida, Vermont, and Colorado have enacted legislation but need HHS approval to proceed.

In its proposal it sent to HHS at the end of the summer, Florida said it could save as much as $150 million annually through an importation program. Among the drugs cited as targets for cost savings are numerous HIV drugs, 2 drugs for relapsing multiple sclerosis, a chronic obstructive pulmonary disease drug, and a hepatitis C drug. Florida media have reported that Governor Ron DeSantis spoke directly with President Donald Trump about the plan in late November.

During Tuesday’s press briefing, Azar did not want to mention specific drugs by name but said the medicines HHS had in mind are ones that typically have rebates attached. Azar, a former president at Eli Lilly, previously attempted to put forth a $200 billion proposal to end rebates to what he called the “middlemen” of the drug supply chain, but the plan died in the White House.

The rising furor over drug costs often involves widely used therapies such as insulin, epinephrine, and biologics for autoimmune diseases like rheumatoid arthritis or ulcerative colitis.

Survey after survey has shown that American consumers are skipping doses or not refilling prescriptions due to rising drug costs. Last week, the House of Representatives passed HR 3, a bill drafted by Speaker Nancy Pelosi, D-California, which aims to lower drug costs by allowing Medicare to negotiate prices with drug companies and to impose stiff fines if they don’t, among other things.

In order to meet the FDA’s criteria, drugs considered for importation must have been approved by Health Canada and must meet requirements for a New Drug Application (NDA) or an abbreviated NDA.

The products would have to be relabeled for use in the United States.

Proponents of drug importation have noted that FDA-approved drugs are already made in foreign facilities that the FDA inspects and approves.

“Provided the drugs consist of the same [active pharmaceutical ingredient] APIs in the same strengths, and they are administered by the same route … It is irrelevant with respect to health and safety risks whether the drugs were originally intended by the manufactured for sale in Europe or Canada or Asia or USA,” according to a report created for the Vermont state legislature earlier this year.

“I want to repeat: we will not take steps that would put patients or our drug supply at risk,” said Azar.

According to a recent report from the House Ways and Means Committee in September, the United States spent $457 billion in 2016 in combined retail and nonretail drugs. The report said the average US pharmaceutical list price is $466.15 compared with $132.59 in Canada.

The plan is opposed by the pharmaceutical industry lobbies on both sides of the US-Canadian border. Even before the US announced its intent in July, Innovative Medicines Canada warned that exporting drugs could cause shortages for Canadian patients.

In the United States, the Pharmaceutical Research and Manufacturers of America, or PhRMA, is also opposed to all forms of drug importation, whether it be through an approved regulatory process such as the one being proposed today, or through individual patients buying through unapproved online pharmacies—which Azar said he opposes.