On December 18, 2019, the United States Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) took steps towards implementing two pathways for importing drugs intended for sale abroad into the United States. One of the pathways would authorize time-limited pilot projects called Section 804 Importation Programs (SIP) proposed by states, wholesalers, and pharmacies to import certain drugs from Canada — notably excluding insulins and biologics. The second pathway would permit manufacturers to sell versions of their own FDA-approved drugs intended for distribution abroad in the United States.
A notice of proposed rulemaking (NPRM) would allow for the importation of certain prescription drugs from Canada. A draft guidance, also released on December 18, 2019, outlined procedures drug manufacturers would follow to help facilitate the importation of prescription drugs, including biologics, that are FDA-approved, manufactured abroad, authorized for sale in any foreign country, and originally intended for sale in the foreign country.
Pathway One: 804 Importation Programs
Section 804 of the Food, Drug, and Cosmetic (FD&C) Act gives HHS the authority to create time-limited projects to import prescription drugs from abroad. The NPRM proposes to allow states, wholesalers, and pharmacies to apply to create SIPs to import drugs from Canada. The SIPs would need to show that their programs would (1) not compromise patient safety and (2) result in a reduction in cost of covered products. Further, drugs would need to comply with the FD&C Act’s rules for new drugs. The NPRM outlines what information is needed to ensure that the imported drug is the same as an FDA-approved drug.
In practice, SIP sponsors (must be a governmental entity) would apply for a time-limited project with HHS and then use an importer (a pharmacist or wholesaler) to acquire drugs from a foreign seller in Canada that directly acquires drugs from manufacturers. The imported drugs would need to be approved by the Canadian Health Products and Food Branch (HPFB) and they must meet the conditions for an FDA-approved new drug application. Although SIPs must initially identify just one importer and one seller, they may expand to more importers and sellers after having shown consistent compliance with the rule’s requirements.
Drugs eligible for importation under this pathway are limited to those defined as a prescription drug under Section 804(a)(3) of the FD&C Act. This means that controlled substances, biological products, infused drugs, intravenously injected drugs, and drugs that are inhaled during surgery are excluded and would not be eligible to import under this NPRM. Further, any drug with a risk evaluation and mitigation strategy (REMS) would be excluded, including insulin, one of the drugs most commonly cited as being more expensive in the U.S. than abroad.
For additional protection, importers would need to test the imported drugs in a U.S. laboratory and ensure that the drug complies with all U.S. labeling requirements.
Pathway Two: Relabeling Drugs Sold Abroad
If implemented, the second pathway that is outlined in the draft guidance would allow manufacturers to import their own drugs intended for sale abroad and sell them in the United States. To do so, manufacturers would need to demonstrate that the drug is the same as the U.S. version and that the drug could be labeled for sale in the U.S. Once those are demonstrated, the drug could then be distributed.
This guidance addresses importation of multi-market approved (MMA) drugs. Such drugs could differ from their American counterparts, but only in labeling. The only limitations on the drugs that could be imported through this pathway are that they must be approved both in the United States and in the originator country, making this pathway’s scope much larger than the previous one.
To use this pathway, manufacturers would submit supplements to their new drug applications or biologic license applications attesting that the drug to be imported is the same as the drug approved under the application. Following the approval of the supplement, manufacturers may propose an NDC for the MMA product using the same procedure as any other product.
Safe Importation Plan
These actions follow the July 2019 introduction of a Safe Importation Action Plan, which outlined the two pathways. While the FDA has had the authority to allow for prescription drug importation since the passage of the Medicare Modernization Act of 2003, it has not taken action to implement the provisions. Since the beginning of the Trump administration, several states, including Florida, Maine, Colorado, Vermont and New Hampshire, have announced plans to import drugs once a federal framework exists to permit it.
The Trump Administration is hopeful that these pathways for importation will result in lower out-of-pocket costs for American consumers. “These are historic actions by HHS and the FDA, and they represent the bold nature of President Trump’s agenda for lowering drug costs,” said HHS Secretary Alex Azar in a press release. “The President has recognized the opportunity to lower costs for American patients through safe importation, and we at HHS and FDA are delivering on that possibility through a safe, commonsense approach.”
However, several industry groups have come out against the proposals, saying they have the potential to harm patients.
Industry Reaction
Stephen J. Ubl, President and CEO of Pharmaceutical and Research Manufacturers of America (PhRMA), released a statement on the news, saying, “At a time when there are pragmatic policy solutions being considered to lower costs for seniors at the pharmacy counter and increase competition in the market, it is disappointing the Administration once again put politics over patients. The Administration chose to proceed with an importation scheme that could endanger American lives, could worsen the opioid crisis and has been called unworkable by Canadian officials. Instead, they could have worked with stakeholders to develop and advance meaningful solutions that would directly benefit patients. We are reviewing the details of the proposed rule and draft guidance and will be providing the Administration with our comments and concerns with the hope that no patients are endangered by this political maneuver.”
Shabbir Safdar, executive director of the Partnership for Safe Medicines, also released a statement in response to the proposed regulations. Safdar said, “Citizens of the United States and Canada should be outraged that the Trump Administration has prioritized politics over their own health and safety…It is well-documented that the Canadian drug supply is not nearly large enough to meet the demand of U.S. patients. So even with a fraction of U.S. drugs coming from Canada, life-threatening shortages would become the reality there within mere months.” Safdar also mentioned, “We’ve seen time and again that gaps in supply are filled by dangerous counterfeits that can end up in the hands of patients on both sides of the border – a risk that’s dramatically exacerbated by this importation policy.”
BIO issued a short statement saying that the plan would jeopardize Americans’ safety while doing little to reduce costs.
Next Steps
The NPRM and the draft guidance are open for comment for 75 days and 60 days after publication in the Federal Register, respectively. Based on the regulations’ scheduled publication dates, this should mean the NPRM will be open for comment through March 7, 2020 and the draft guidance will be open for comment through February 21, 2020. Should the NPRM be finalized following the comment period, sponsors would need to apply to HHS to get their pilots approved. If the draft guidance is finalized, manufacturers will need to file supplemental information with FDA prior to importing and marketing their products intended for use abroad in the United States.