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Drug Importation, eh?

02/07/20

Category:

By:

Jenna Stern, Senior Regulatory Affairs and Public Policy Director

[Full disclosure: your author is a Canadian import]

After several months of D.C. chatter and countless state importation bills, FDA recently took two significant regulatory steps to allow for prescription drug importation from Canada. Wait, you thought importation was already happening in Florida? Not quite.

So, what happened? In December 2019, FDA released a proposed rule and draft guidance, each detailing a different prescription drug importation pathway. One pathway is geared toward manufacturers and is outlined in the draft guidance. The other pathway is outlined in the proposed rule (the Vizient summary is available here) and is the focus of this post.

Does this mean syringes will come filled with maple syrup?!! Will we start seeing maple leaves on prescription drug containers? Will the U.S. be able to operate a safe and effective supply of cheaper medications from north of the border? In short, hopefully not, no, and it remains to be seen.

Although the concept of traveling across borders to access less-expensive medications is not novel for people acting on their own behalf, no endorsed mechanism exists for health care providers and stakeholders to engage in this activity. The goal of the proposed rule is to help states, pharmacists and distributors compile an importation plan that would be submitted to FDA for approval, and it also outlines additional requirements related both to pre- and post-importation processes. In addition, the rule states that applicants must demonstrate cost savings to the U.S. consumer. Even though the objective of the whole endeavor is to address drug pricing, with all the regulatory requirements and additional stakeholders, importation costs may add up.

And what about those maple syrup-filled syringes? Intravenously injected medications cannot be imported under the proposed rule. Other medications that are typically in shortage or high cost, such as controlled substances, infused medications, biologics (including insulins), and drugs subject to a Risk Evaluation and Mitigation Strategy, would also be excluded.

So, which drugs would be good candidates for importation? Recent research found that 109 of 170 novel, off-patent drugs in tablet or capsule form approved by non-U.S. regulatory agencies, such as those in Canada and the European Union, had at least one manufacturer that was different from the U.S. manufacturer, which may help spur competition. The researchers indicate that acquiring these off-patent medications from the foreign manufacturers could help address certain cost issues. While it’s important to note the research did not focus solely on Canadian importation, like the proposed rule, it does suggest that novel, off-patent drugs approved by Health Canada may be contenders for importation.

Oh, you were really asking about medication quality? Quality concerns and FDA’s limited resources are among the reasons four former FDA commissioners issued a statement in 2017 opposing importation. In addition, like the United States, a significant portion of medications approved by Health Canada are manufactured in China and India. Even with FDA’s oversight, recent reports found 45% of establishments in China have never been inspected by FDA and FDA struggles to guarantee the safety of imported drugs. This matters to those considering importation plans because while the products would be imported from Canada, the risks associated with many of them would still remain.

Now, how about those maple leaves on prescription drug containers? Not quite, but they do have to say the drug was imported from Canada. Additionally, importers would need to ensure the drug complies with all FDA labeling requirements (goodbye maple leaves!) and the imported products would have a National Drug Code (NDC) that is different from the U.S. counterpart. An NDC is used by FDA, supply chain stakeholders and health care providers to identify products, but also by payers for billing purposes. As a result, multiple NDCs for the “same” product may create inventory challenges, confusion and coverage issues.

But what about the Drug Supply Chain Security Act (DSCSA) compliance? Well, the importer (likely a wholesaler or pharmacist) would need to ensure the drug is relabeled with the DSCSA product identifier. However, in contrast to DSCSA requirements, U.S. pharmacists and wholesale distributors could be permitted to engage in transactions with foreign entities that are not licensed in the United States and thus not subject to the same legal and regulatory requirements. In addition, these foreign entities may utilize different standards for information sharing that may not be compatible with those implemented in the United States. This has led to many stakeholders voicing concern for how these DSCSA exceptions could possibly disrupt implementation and more importantly, risk supply chain security.

Although Canadians are known for being nice and saying “sorry,” we haven’t even addressed the elephant (or donkey) in the room – which is that Canadians (and the Canadian government) don’t even WANT to help America address our rising drug prices. Groups like the Canadian Pharmacists Association oppose allowing U.S. importation as it would exacerbate shortage issues Canadians are already facing. In addition, Canadian drug distributors indicated they would not participate in an importation plan. It looks like our neighbors to the north may not want to sell us their medications … just their poutine.

Therefore, while the accelerating cost of drugs remains a critical problem, questions persist as to whether formalized importation from Canada will catch on like Drake.

About the author. As senior regulatory affairs and public policy director in the Vizient Washington, D.C. office, Jenna Stern analyzes legislative and regulatory issues impacting hospitals, develops summaries and drafts public comment letters. She engages directly with key stakeholders on federal legislative and regulatory developments of importance to Vizient and its members. Stern joined Vizient after serving as a health policy director for a provider association where she identified legislative and regulatory developments impacting pharmacists and communicating pharmacists’ perspectives to key stakeholders. She has also previously worked at a D.C.-based health care consulting firm and various non-profit organizations focused on public health and advocacy.

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