With Vermont Governor Phil Scott’s (R) signature on Senate Bill 175, Vermont now becomes the first-in-the-nation to enact a wholesale prescription drug importation law. The final version of the bill passed nearly unanimously in both the Senate (Yeas = 29, Nays = 0) and House (Yeas = 141, Nays = 2). Don’t expect importation to begin anytime soon. There’s also a possibility it may not happen at all.
The law requires “[Vermont’s] Agency of Human Services, in consultation with interested stakeholders and appropriate federal officials, [to] design a wholesale prescription drug importation program that complies with the applicable requirements of 21 U.S.C. § 384, including the requirements regarding safety and cost savings.” Before going any further in discussing the state’s importation program, a brief overview of federal law is warranted, including a 2004 citizen petition denial and related court case.
Federal law generally prohibits the reimportation of prescription drugs into the United States (see 21 U.S.C. § 381(d)(1)). As with most laws there are exceptions. Here, that exception is found under Section 804 (21 U.S.C. § 384) of the Federal Food, Drug, and Cosmetic Act (FDCA). Section 804 was created with the passage of the Medicine Equity and Drug Safety Act of 2000 and required the HHS Secretary to implement the law. Former HHS Secretary Tommy G. Thompson believed public safety outweighed opening our “closed” distribution system (read more here). Under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Section 804 was brought back to life.
Similar to its predecessor, Section 804 requires the HHS Secretary to implement the program. To date, certification has not happened. It should be noted Section 804 also required HHS to study and produce a report on importation (find the report here).
Vermont’s law may lead into a legal showdown between the state and HHS/FDA. However, this showdown would be overshadowed by a 2005 District Court case between Vermont and HHS/FDA and it also undermines HHS’ previous findings.
In 2004, FDA denied a citizen petition filed by the Vermont Agency of Administration (VAA). VAA had requested that FDA to permit the Vermont State Employee Medical Benefit Plan to establish an importation program. VAA sued HHS and FDA in federal court and argued that the denial violated the Administrative Procedures Act and that Section 804(l)(1) (section on HHS certification to Congress) was unconstitutional. The District Court ruled against Vermont and granted HHS/FDA’s motion to dismiss (the case, Vermont v. Leavitt, 405 F. Supp. 2d 466 (D. Vt. 2005), can be found here).
Back to Vermont’s law.
The program’s design consists of 8 elements, ranging from designating a state agency to become a licensed drug wholesaler or contracting with a licensed wholesaler, using regulated Canadian prescription drug suppliers, ensuring imported drugs meet FDA standards (i.e., safety, effectiveness, labeling, etc.), and more. The program design must be submitted to certain legislative committees by January 1, 2019. By July 1, 2019, the state’s Agency of Human Services will submit a formal request from the HHS Secretary for certification. In order for Vermont’s law to be implemented, the Agency needs program financing from the state and certification from the HHS Secretary.
In order for the HHS Secretary to approve Vermont’s program, the Secretary must certify to Congress that importation “(A) pose[s] no additional risk to the public’s health and safety; and (B) [would] result in a significant reduction in the cost of covered products to the American consumer” (see Section 804(l)(1)). Based on comments from HHS Secretary Alex Azar, we do not expect certification to happen under his watch.
We reached out to the Pharmaceutical Research and Manufacturers of America (PhRMA). Caitlin Carroll, Director of Public Affairs, responded with the following:
Patient safety must be our top priority, and our public policies should reinforce – not undermine – that commitment. It is highly irresponsible for Vermont legislators to promote an importation scheme that would create more avenues for counterfeit drugs to enter the country in the middle of an unprecedented opioid crisis. Overdose deaths are being driven by illicit and counterfeit drugs, including heroin and counterfeit fentanyl, that are being brought into the U.S. by unscrupulous organizations and mixed with other substances unbeknownst to the user, often disguised as legitimate packages. In Vermont, fentanyl-related deaths have increased by 33 percent in the last year.
Lawmakers cannot guarantee the authenticity and safety of prescription medicines when they bypass the FDA-approval process, and the Canadian government does not inspect or take responsibility for the legitimacy of prescription medicines shipped to the U.S. The burden of combating illicit drugs would fall on local law enforcement officials, who lack the capacity to inspect even a small percentage of increased counterfeit drugs, but who have witnessed their impact in communities across the state.
A handful of other states have proposed similar legislation this year. While most have failed, many state legislators will be watching the outcome of Vermont’s new law closely. At the end of the day, this latest move from Vermont seems like a political tactic to score an easy political victory with positive soundbites, make consumers believe that cheaper drugs are coming their way, and when the HHS Secretary denies the program, the lawmakers can paint the federal agencies (i.e., HHS and FDA) as the enemy.