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Though exclusions exist, agency’s new guidance backs the belief that US can reduce costs by importing cheaper, but legitimate products from Canada or elsewhere.
Despite a long history of difficulties in this area, FDA once again is taking steps to facilitate the import of less costly prescription drugs from Canada by states, Indian tribes, and other entities. The Canadian government has objected to the plan, manufacturers challenge the legality of the process, and the complex requirements for establishing state import plans has stymied implementation.
New FDA guidance for establishing import programs states upfront that its main purpose is to “achieve a significant reduction in the cost of covered products” for Americans, while “posing no additional risk to the public’s health and safety.” At the same time, the program excludes many important and high-cost medicines, including biological products, infused drugs, controlled substances, and drugs subject to risk evaluation and mitigation strategies (REMS), raising questions about realistic expectations for significant cost savings.1
Even so, this latest drug importing effort reflects the widespread belief among US policymakers and consumers that Americans can reduce drug costs by importing cheaper, but legitimate products from Canada or other industrialized nations. Federal laws require that all drugs sold and distributed in the US meet FDA requirements for safety and efficacy, and the cost of medicines traditionally does not factor into those decisions. Even though countless studies document that many therapies are less expensive in Europe and other regions, efforts to legalize the import of such products from advanced nations have faltered in the past due to difficulties for FDA in ensuring that drugs made abroad are legitimate and meet regulatory requirements. Border states such as Maine and Vermont have authorized consumer purchasing from Canadian pharmacies in the past, but these efforts have been cumbersome and limited. Numerous drug websites claim they can provide US consumers with quality products from abroad, but those operators often prove to be unreliable and even fraudulent.
Despite these problems, the Trump administration unveiled a Safe Importation Action Plan in 2019 as part of its drug price control campaign. FDA implemented the policy by outlining a pathway for states to import certain drugs from Canada, as one option under the broader plan. The requirements are authorized by section 804 of the Food, Drug & Cosmetic Act, and specifics for establishing Section 804 Important Plans (SIPs) were spelled out in an FDA final rule issued in Oct. 2020, which went into effect Nov. 30, 2020.2
Several states expressed enthusiasm for establishing such import programs, but implementation has been slow. Opponents such as the Pharmaceutical Research and Manufacturers of America (PhRMA) filed lawsuits challenging the program, claiming that FDA would be unable to ensure the safety and efficacy of such imported medicines. However, the Biden administration has signaled support for the initiative and recently instructed FDA to work with states and Indian tribes in establishing SIPs as its own drug pricing proposals have stalled. In March, FDA met with representatives from Florida, Colorado, Vermont, Maine, and New Mexico to provide assistance of preparing SIP proposals and navigating the import program.3 And FDA guidance published last week furthers this process by outlining key requirements of the SIP program in a Q&A format designed to help “small entities” understand the process.
The guidance reflects the challenges for states and other parties less familiar with FDA rules and requirements in establishing and operating SIPs. Issued jointly by the Center for Drug Evaluation and Research (CDER) and the Office of Regulatory Affairs (ORA), the advisory explains how the Canadian government has to license a “Foreign Seller” to ship products to the US. There are procedures for SIPs to submit import requests to FDA and requirements for testing imported products to ensure quality and stability. SIPs also have to submit adverse event reports, implement recalls where needed, and document cost savings to American consumers.
All these specifics continue to raise skepticism that SIPs will ever operate effectively and achieve promised benefits. In addition, the Canadian government stated early on that it opposed the program and is unlikely to provide the required vetting of sellers at its end. Such drug import programs have disappeared in the past due to similar hurdles and requirements, and it remains to be seen if even those committed states have a different experience in the drug import area.