What Is It?
Current law allows wholesale importation only in very limited circumstances and requires the Health & Human Services (HHS) Secretary to certify to Congress that allowing importation of drugs will not put public health and safety at risk and that it will result in significant savings. No Secretary has ever been able to make such a certification. Although states (e.g., Florida and Colorado) have passed wholesale importation laws, those laws cannot take effect until the state has crafted an importation plan, FDA has signed off on it, and the HHS Secretary has made the required certification to Congress. The Safe Importation Action Plan (the “Plan”) announced on July 31, 2019 is the first step in the process of implementing state importation laws.
The Plan includes two “pathways” for importation.
The first pathway will solicit demonstration projects from pharmacists, wholesalers, and states (in conjunction with pharmacists and wholesalers) that comply with the importation provision that currently exists in the Food, Drug, & Cosmetic Act. The demonstration projects will be subject to FDA oversight and compliance requirements and can only import certain eligible drugs. The second pathway allows manufacturers to voluntarily import versions of FDA-approved drugs that are manufactured abroad. Manufacturers would receive new NDCs for the imported drugs and can, but are not required, to the lower the prices for the imported drugs.
The Plan will not go into effect for some time, as FDA and HHS will need to release a proposed rule outlining requirements.
HHS and FDA will release a proposed rule calling for demonstration projects from pharmacists, wholesalers, and states in conjunction with pharmacists and wholesalers, and FDA will publish guidance for manufacturers seeking to import version of their FDA-approved drugs that are manufactured abroad.
The proposed rule and guidance will provide more detail about how the Administration intends to implement the new policies. For now, here’s what we know about each pathway.
- Pathway 1 - Demonstration Projects: The demonstration projects must comply with all the safety requirements for FDA-approved drugs and cannot take effect until the HHS Secretary certifies that importation will “pose no additional risk to the public’s health and safety” and “will result in a significant reduction in the cost of covered products to the American consumer.” Additionally, the following conditions apply:
- Oversight - Projects must be time-limited and subject to ongoing FDA oversight to ensure compliance with FDA drug quality, record keeping, testing, and counterfeiting prevention requirements.
- Eligible Drugs – All drugs must be from Canada and be subject to oversight by Health Canada (i.e., Canada’s FDA).
- Eligible drugs must be manufactured using FDA-inspected facilities and in accordance with the FDA drug application (drug must “contain only active pharmaceutical ingredients (API) manufactured at facilities that also manufacture API for the FDA-approved version, and must be formulated using processes, specifications, and facilities that are used in accordance with the approved new drug application for the FDA-approved version”).
- Non-eligible drugs include controlled substances, biological products, infused drugs, IV drugs, drugs inhaled during surgery, and some parental drugs.
- Compliance - Applicants will need to demonstrate compliance with a long list of safety requirements, including track and trace, labeling, registration, importation entry, adverse event reporting, recall procedures, and current good manufacturing practices (CGMP).
- Pathway 2 – Voluntary Manufacturer Importation: FDA will allow manufacturers to import versions of the FDA-approved drugs they manufacture and sell in other countries. Manufacturers would receive a new NDC for the imported product and could voluntarily reduce prices for those drugs because they would not be limited by restrictive distribution contracts.
We believe that it will be difficult to operationalize pathway 1 in a manner that meets all of these requirements and delivers cost savings. Further, Canada has expressed reluctance to act as the U.S. drug supplier. As to pathway 2, it does not offer an incentive for manufacturers to lower costs, so it is unlikely to attract many participants. We are unconvinced that either pathway will result in cost savings to patients and that pathway 1, in particular, places the drug supply at unnecessary risk.
ASHP opposes importation unless it complies with safety requirements for U.S. drugs and safeguards the pharmacist-patient relationship, particularly for vulnerable patients with complex medication regimens. Although we share the goal of reducing drug prices, we are skeptical that importation in general is an effective solution and that the Plan will improve it.