Drug Importing Back on Center Stage

August 8, 2019

HHS, FDA back Trump back cheaper foreign drugs to cut pharma costs. Jill Wechsler reports.

In a notable about-face, the Trump administration announced last week new policies to facilitate access to cheaper drugs from Canada and other countries for U.S. patients. Democrats in Congress have promoted such action as part of more extensive legislation to limit  outlays on medicines, but wider drug importing generally has been opposed by Republicans, as well as HHS and FDA officials even in Democratic administrations. 

This time, however, easier access to drugs from other nations was trumpeted by Health and Human Services secretary Alex Azar and supported by FDA acting administrator Ned Sharpless. Previously, Azar had termed drug importation a “gimmick” that could not be done safely. Now the reformers consider more advanced drug tracking, labeling and import oversight systems able to ensure that products marketed outside the U.S. are of similar quality and efficacy as those distributed at home.

However, the path to wider importing remains complex and lengthy, with analysts predicting that few if any drugs would reach U.S. consumers under the new program before the 2020 election. 

The administration’s “

” proposes two pathways for obtaining drugs from foreign markets. Pathway 1 encourages states, wholesalers or pharmacists to propose demonstration projects for importing drugs approved in Canada that are the same as those marketed in the U.S. However, the program excludes multiple important therapies, including biological products, infused or injected drugs, controlled substances, certain parenterals, and drugs inhaled during surgery, limiting its potential impact. To authorize such action, FDA would issue a Notice of Proposed Rulemaking (NPRM) to revise current rules governing section 804 of the Food, Drug & Cosmetic Act, a process that usually takes years to accomplish. The new Rule would allow applicants to establish demonstration projects that meet requirements for importing compliant therapies. 

Under Pathway 2, pharmaceutical companies would be allowed to import approved drugs sold overseas under different NDC codes, with assurance that the foreign version is the same as that marketed in the U.S. Imports could include expensive biologics such as insulin and cancer therapies and theoretically would appeal to manufacturers caught in costly U.S. rebate programs that raise drug prices. FDA guidance is needed to implement the program, another lengthy regulatory process. 

The larger issue here is why any pharma marketer would bring cheaper versions of its own products to the U.S. PhRMA (Pharmaceutical Research and Manufacturers of America) strongly opposes the plan, maintaining that there’s “no way to guarantee the safety of drugs that come into the country from outside the U.S. supply chain.” Industry noted that Canadians object to wider exporting of their drug supply for fear of wider shortages and higher costs. The lobbyists are lining up to ensure opposition from Republican lawmakers to the import plan, while counting on inaction until the end of next year. 

This latest drug reform proposal appears to be one more effort by the White House to champion lower drug prices in the wake of previous failures. An earlier initiative to tackle drug rebates collapsed after budget analysts determined that the program would raise costs for consumers. Drug pricing policy changes are included in bipartisan legislation moving forward in the Senate and proposed in the House, but Congress won’t take any further action until this fall.