FDA Implements Trump’s Drug Import Plans

The FDA has adopted a final rule implementing controversial plans to allow importation of prescription drugs, including biologics and insulins, from Canada, on the theory that this can bring down costs of drugs in the United States where pharmaceutical companies exert strong control of prices.

The Safe Importation Action Plan was sketched out in prescription drug executive orders signed by President Trump in July.

The FDA’s final rule allows states and indigenous tribes as well as some pharmacies and wholesalers to submit importation program proposals to the FDA for review and authorization. The agency’s guidance for industry officials detailed procedures drug manufacturers can follow to facilitate the importation of FDA-approved drugs and biologics that are manufactured and intended for sale in Canada.

“The final rule implements a provision of federal law that allows FDA-authorized programs to import 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 a significant reduction in the cost of covered products to the American consumer,” the FDA said in a statement.

HHS’ Positive Outlook

Under the plan, imported drugs would be relabeled with US approved labeling and tested for authenticity and spoilage. Drug manufacturers could apply for National Drug Codes for certain FDA approved prescription drugs, including biologics that were originally manufactured abroad. The drugs would be made available in hospitals, pharmacies, and providers’ offices.

Many concerns with drug importation from Canada have been raised, particularly that Canada is a much smaller country by population than the United States and is not immediately equipped to supply drugs at the scale that might be needed to satisfy US demand. Such demand could also drive up costs for Canadian citizens. Other concerns are that Canada, which has a more closely government-regulated health care system, does not make all drugs available to its population that the United States does, so US citizens may have difficulty getting the particular drugs they are interested in.

HHS officials have said that they expect the marketing of imported drugs may open corridors for manufacturers that would otherwise be bound by highly restrictive contractual agreements in the United States. This would give them leeway to introduce drugs at lower cost, HHS argues.

In a press conference about the FDA’s action, Brian Harrison, chief of staff of the HHS, said drugs cleared for importation would have to undergo “testing as required by statute for authenticity and degradation and to ensure that the drugs meet established specifications and standards, after which—and it is important only after which—they will be relabeled with FDA-approved labeling.”

“These programs will have to demonstrate significant cost reductions in covered products for the American consumer, Harrison said.

Further, he said he anticipates that the provision of national drug codes for drug manufacturers would provide them with “greater flexibility” to offer drugs at lower process “than what their current distribution contracts require. This could allow companies to compete through lower costs in ways that just aren’t possible if they have incredibly complex and often distortionary systems, where drugs too rarely compete on price.”

Harrison also noted the program could save Americans significantly on insulin costs, as costs here in the United States are “2 or 3 times more depending on which estimates you look at, and sometimes, I think, even higher than that.”

Criticism From a Pharmacy Expert

In an interview with The Center for Biosimilars®, Wayne Winegarden, PhD, a senior fellow in business and economics at the Pacific Research Institute (PRI) and director of PRI's Center for Medical Economics and Innovation, expressed his doubts over the safety and effectiveness of this plan, calling it a “terrible idea.”

“We have some issues with a drug pricing system; we need to fix those. This is not a fix to the problems we have. It's the writing of a slogan. It's a way to say that you're doing something when you're not actually fixing our problems. And it's just not a reasonable solution that's going to actually change everything,” said Winegarden.

One of Winegarden’s major issues with the plan is that it will open to the door to more counterfeit drugs being put on the US market, which is already an issue in developing countries. Winegarden said that in some countries, upward of 80% of medicines are actually fake and may contain no active ingredients or, worse, dangerous chemicals.

“If we open up to importation, it makes it that much more difficult for the FDA to monitor the drug supply chain. In doing that, we’re really opening ourselves up to all of these various forces that are out there, when we really need to be working on reforms that secure the supply chain. This is just creating more avenues and creating more incentives for people to go seek [drugs] out, not realizing that they could actually be seeking out medicines that are dangerous for them,” he said.