On December 18, the Food and Drug Administration (“FDA”) released two proposals that would offer additional avenues through which drugs could be imported into the United States and sold at lower prices in the U.S. market. The first—a proposed rule—would allow for the importation of certain prescription drugs from Canada. The second—proposed guidance—would describe steps that manufacturers could take to import certain prescription drugs from abroad. These actions mark the Administration’s first step in implementing the Safe Importation Action Plan that was announced in July 2019.
Proposed Rule. The proposed rule would allow states to pursue two-year pilot programs (with the opportunity for extension) to import certain prescription drugs from Canada, subject to review and approval by FDA. Among other things, the proposal would:
- Establish eligibility criteria for certain prescription drugs (e.g., approved in Canada, meet the conditions of an FDA-approved drug application, etc.) and renders certain drugs ineligible (e.g., controlled substances, biological products, infused drugs, intravenously injected drugs, drugs subject to risk evaluation and mitigation strategies, etc.);
- Allow states and certain other non-federal government entities (e.g., tribal or territorial government entities) to submit importation program proposals to FDA for review and authorization;
- Permit certain entities (e.g., pharmacists, wholesalers, or other state/non-federal government entities) to co-sponsor the program;
- Establish pre- and post-import obligations on participants throughout the supply chain (e.g., testing for authenticity and degradation, labeling and repackaging, etc.); and
- In their proposals, require program sponsors to demonstrate that it will impose no additional risk to the public’s health and safety and result in a “significant reduction” in cost to the American consumer.
How these programs would operate in practice would depend on each individual state’s proposal. So far, Florida and Vermont have submitted concept papers to federal regulators that offer a few details on how their drug importation programs would function. While the two plans share similar approaches to ensuring safety, they differ with respect to payer participation. Specifically, Florida’s program is limited to public payers, whereas Vermont’s plan would allow participation by both commercial and public payers. Other states that passed prescription drug importation legislation this year, including Colorado and Maine, appear poised to follow Vermont’s approach.
Although some states appear eager to engage in these importation programs, the proposed rule has been the subject of substantial criticism. For example, many worry that the programs will not actually result in lower prices for consumers, whether because of inadequate buy-in from the states, administrative and regulatory burdens associated with standing up such programs, or the inability to ensure cooperation from Canada or drug manufacturers themselves. Comments on the proposed rule are due March 7, 2020.
Proposed Guidance. The proposed guidance outlines a potential pathway by which manufacturers could import their own FDA-approved, brand-name drugs that were authorized for sale abroad (i.e., “multi-market approved” or “MMA” drugs) and sell them in the United States (i.e., this applies to drugs from any foreign country, not just Canada) under a new drug code. The use of an additional new drug code would allow manufacturers to circumvent their existing agreements and offer these products at lower prices than what their current contracts require. To qualify as an MMA drug eligible for a new drug code, manufacturers would need to demonstrate that the drug:
- Is FDA-approved;
- Is manufactured abroad, authorized for sale in a foreign country, and originally intended for sale in that foreign country;
- Continues to meet the quality standards for marketing in its originally intended market; and
- Differs from the FDA-approved drug only with regard to its labeling statement.
In addition, to be lawfully imported, the drugs must not otherwise be in violation of federal food and drug laws, adulterated, or misbranded. If these requirements are met, the guidance offers recommended procedures for submitting the necessary documentation to demonstrate that the drug offered for import is FDA-approved and meets the required specifications. Comments on the guidance are due by February 21, 2020.
For more information on the proposals, click here for an overview prepared by Third Horizon Strategies.