Senators McCain and Grassley Request HHS for Approval of Importation of Certain Drugs

As the controversy over drug pricing continues to heat up, Senators Chuck Grassley and John McCain have started to place pressure on the current administration to expand the importation of drugs from Canada. In a letter sent on November 20, 2015, Senators Grassley and McCain asked Department of Health and Human Services (HHS) Secretary Sylvia Burwell to permit pharmacists, wholesale retailers, and individuals to import cheaper Canadian versions of select drugs under certain circumstances.

Those certain circumstances include:

• The drug if off patent or no longer marketed in the United States by the innovator company that initially developed the drug;
• Significant and unexplained increases in price;
• No direct competitor drug is currently in the market and introduction of a competitor drug will benefit the prices paid by taxpayers and consumers; or
• The drug is produced in another country by the name brand manufacturer that initially developed the drug or by a well-known generic manufacturer that commonly sells pharmaceutical products in the United States.

Senators Grassley and McCain believe that for many important drugs, “the market is small enough that, when combined with high regulatory costs to enter even the generic market, there is little incentive for competition.”

The Senators state in their letter that many of the drugs that were subjected to drastic price increases in the United States are still available in other countries for a fraction of the cost here – often still produced by the original manufacturer or a reputable generic manufacturer. The Senators have noticed a pattern where the original manufacturer of a drug sells the rights to market or manufacture a drug to a buyer in the United States will still retaining the rights to the drug in other countries. As this trend continues and gets larger, the price increases are passed on to taxpayers in the form of higher spending for Medicare and Medicaid, or to employers and other insured Americans via higher insurance premiums.

Allowing for drugs to be imported under the aforementioned circumstances would likely prevent pharmaceutical companies from driving up the prices of generics the way Turing and Valeant did when they raised the price of drugs that had been in the market for decades with few competitors. Permitting such an importation from Canada with a fast track approval process would lower regulatory costs and delays, which would help foster market competition.

According to the letter, current law provides HHS with authority to address a number of abuses but may be insufficient to address every case. Senators Grassley and McCain ask for recommendations and advice from Secretary Burwell as to what “additional authority related to importation you would require to protect American consumers.” They provide their own suggestion of permitting importation to be expanded to include additional countries beyond Canada with similar regulatory regimes related to drug approvals.

Currently, the Food and Drug Administration (FDA) is permitted to issue waivers to import pharmaceuticals for personal use, but is otherwise prohibited from allowing importation until HHS certifies that such a move would lower consumer costs and not present a health risk.

This letter from Senators Grassley and McCain follow similar calls from 2016 presidential candidates.