Will Allowing for Certain Drug Importation from Canada Materially Impact Drug Pricing in America?

Dec 23, 2019 | Draft Guidance, Drug Importation, Drug Pricing, FDA, HHS Common Rule

Will Allowing for Certain Drug Importation from Canada Materially Impact Drug Pricing in America?

The Trump White House, along with the U.S. Department of Health and Human Services and the U.S. Food and Drug Administration (FDA), issued a notice of proposed rulemaking (NPRM) that, if finalized, would allow for the importation of certain prescription drugs from Canada. The new draft guidance for industry describes procedures that drug manufacturers can follow to facilitate importation of prescription drugs, including biological products, that are FDA-approved, manufactured abroad, authorized for sale in any large country, and originally intended for sale in that foreign country. It is not clear if this type of proposed rule-making, based on existing law, will have any real impact on drug prices for the vast numbers feeling the drug price “squeeze.”

See the draft guidance document here

What is NPRM?

The NPRM means New Proposed Rule Making which is a way for executive and independent agencies to create, or promulgate, regulations. In general, legislatures first set up broad policy making mandates by passing statutes, then agencies create more detailed regulations through rulemaking.

What Rules would they Change?

They are announcing that this is the first step in implementing a provision of federal law that would allow for the importation of certain prescription drugs from Canada under specific conditions that ensure the importation poses no additional risk to the public’s health and safety while achieving significant reduction in the cost of covered products to the American consumer.

What does the New Draft Guidance Cover?

The draft guidance issued recently outlines describes procedures for a drug manufacturer to submit documentation that demonstrates that the product offered for import from any foreign country is, in fact, an FDA-approved drug product, including that it is manufactured in accordance with the FDA—approved application.

What does it Allow?

The NPRM proposes that the FDA would allow states and other certain non-federal government entities to submit importation program proposals to the FDA for review and authorization. Such an importation program could be co-sponsored by a pharmacist, wholesale, or another state or non-federal governmental entity.  Referred to as section 804 Importation Programs, these programs would be authorized by the FDA to manage the importation of certain prescription drugs that are approved in Canada and also meet the condition in an FDA—approved drug application. Eligible prescription drugs would need to be relabeled with the required U.S. labeling prior to importation and undergo testing for authenticity, degradation, and to ensure that the drugs meet established specifications and standards. Notably, these programs would also have to demonstrate significant cost reductions to the American consumer.

What ae some Examples of Change that could Lower Drug Prices

The FDA offers examples for consideration—they introduce potential procedures drug manufacturers could follow to obtain an additional National Drug Code (NDC) for certain FDA-approved prescription drugs, including biological products, that were originally manufactured, and intended to be marketed, in a foreign country. The use of additional NDC would allow greater flexibility for drug companies to offer these products at a lower price than what their current distribution contracts require.

FDA Comment

The FDA noted that the announcement “outlines two pathways for safe importation of certain prescription drugs to help provide safe, effective, more affordable drugs to American patients,” reported Alex Azar, HHS Secretary. He continued, “These are historic actions by HHS and the FDA, and they represent the bold nature of President Trump’s agenda for lowering drug costs. The President 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.”

What is the Basis for the New Law?

There is a 15-year old federal law that supports the commercial importation of drugs from the neighbor to the north under special circumstance. The law was apparently never implemented.

Is this Law Intended for Industry or Consumers?

Industry, and the idea is that by allowing drug manufacturers to import comparable versions of FDA-approved drugs that they market in other countries, they could leverage a new National Drug Code (NDC) and resell them in America at lower prices. Apparently, there has been some interest in such a rule. In theory, consumers could benefit from the lower prices.

Can the FDA Quantify any Projected Savings from this Rule?

No, they could not comment on that nor what drugs could be involved.

Comments

Drug pricing is an incredibly complicated topic in the United States and frankly most households feel the squeeze of inflated pricing—especially as Americans get older and depend on fixed income as well as face greater issues associated with aging and hence depend on more drug prescriptions. TrialSite News recently commented on perhaps a major underlying force behind appreciating drug prices

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