December 21, 2018
Prescription Drug Importation
In the context of rising drug prices, the possibility of
conducted once a drug is on the market to assess
importing prescription drugs from other countries at lower
compliance with manufacturing standards. For-cause
prices is again being debated. Generally, the importation or
inspections are to investigate, for example, complaints from
reimportation of a prescription drug that does not meet
patients and health care professionals about a product or
Food and Drug Administration (FDA) requirements is
concerns about product quality. FFDCA Section 510(h)
prohibited. The policy debate largely has been around
requires FDA to conduct surveillance inspections of both
creating a new legal option for the import of prescription
domestic and foreign establishments using a risk-based
drugs into the United States at lower cost than the same
approach.
drugs available domestically. This has raised concern from
stakeholders about drug safety and the feasibility of such a
Many prescription drugs that are sold in the United States
program.
are manufactured, at least in part, abroad. According to a
December 2016 U.S. Government Accountability Office
Prescription Drug Regulation
(GAO) report, FDA estimates that more than 40% of
FDA, under the Federal Food, Drug, and Cosmetic Act
finished drugs and 80% of APIs are produced overseas.
(FFDCA), regulates prescription drugs. In order to market a
FDA has foreign offices around the world and according to
new drug in the United States, a manufacturer first must
a December 2016 GAO report, FDA has increased the
obtain approval from FDA. To get that approval, the
number of foreign drug inspections conducted each year
manufacturer must (1) demonstrate the drug’s safety and
since 2009. FDA also recognizes inspections conducted by
effectiveness according to criteria specified in law and
certain foreign regulatory authorities within the European
regulation, (2) ensure that its manufacturing facility passes
Union and relies upon their inspection data.
FDA inspection, and (3) obtain approval for the drug’s
labeling.
Prescription Drug Importation
Foreign-made versions of FDA-approved drugs that have
Pre-Market Approval
not been evaluated through the FDA process are typically
FDA’s prescription drug approval requirements apply to all
considered unapproved new drugs and are illegal. The
manufacturers that market drugs in the United States,
FFDCA provides for the circumstances under which an
regardless of whether the manufacturing facility is located
unapproved drug may be imported into the United States.
domestically or in a foreign country. Thus, before a drug
This section discusses the circumstances under which
manufactured in a foreign country is imported into the
importation is prohibited, as well as the circumstances
United States for commercial use, it must be approved by
under which it is allowed.
FDA. To obtain approval, the manufacturer must submit a
New Drug Application (NDA), or in the case of a generic
Importation that Is Prohibited Under Current Law
drug, an abbreviated NDA (ANDA), which must include,
Under current law, the importation of unapproved new
among other things, information about the facility in which
drugs, including foreign-made versions of FDA-approved
it was manufactured, a product description (e.g., chemical
drugs, is generally prohibited. This would entail bringing
formulation), processing methods, manufacturing controls,
into the United States an unapproved drug manufactured
and labeling. An active pharmaceutical ingredient (API) is
outside of the United States. Even in cases where the drug
defined as “any substance that is represented for use in a
is a foreign-made version of an FDA-approved drug (i.e.,
drug and that, when used in the manufacturing, processing,
the same active ingredient made by the same manufacturer),
or packaging of a drug, becomes an active ingredient or a
FDA has stated that it is highly unlikely that the version for
finished dosage form of the drug” (21 CFR §203.3(e)). An
the foreign market would meet all of the requirements in the
API may be imported into the United States if it is the
FFDCA for approval. FFDCA Section 505(a) and 301(d)
subject of a valid NDA or investigational new drug
prohibit the introduction of an unapproved drug into
application (IND) if it is to be used for laboratory research
interstate commerce, and FFDCA Section 301(a) prohibits
or clinical trials.
the introduction into interstate commerce of a drug that is
adulterated (e.g., held under insanitary conditions) or
Facility Inspection
misbranded (e.g., the labeling does not include adequate
Facilities that engage in the “manufacture, preparation,
directions for use).
propagation, compounding or processing” of a drug,
whether an API or the finished form of the drug, must
Commercial Use. FFDCA Section 801(d)(1)(B) explicitly
register with FDA, to be inspected by the agency prior to
prohibits the importation for commercial use of unapproved
approval. FDA conducts preapproval, surveillance, and for-
drugs manufactured outside of the United States, with two
cause inspections. Preapproval inspections are part of the
exceptions: (1) except as authorized by the Secretary
drug approval process, while surveillance inspections are
pursuant to a drug shortage, and (2) pursuant to the
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Prescription Drug Importation
authority at FFDCA Section 804, both of which are
approved for use in the United States and manufactured in
discussed in the next section. This does not apply to those
other countries (i.e., Ireland, Mexico, and Canada).
drugs that are manufactured outside of the United States
and are authorized to be marketed in the United States and
Personal Importation Policy (PIP). As outlined in FDA
are labeled according to the relevant requirements in the
guidance, the agency allows some personal importation of
FFDCA (i.e., drugs that are FDA-approved).
unapproved drugs on a case-by-case basis, but one of the
criteria that FDA lists in allowing this personal importation
Reimportion. In addition, current law prohibits the
is that there can be no existing effective treatment available
reimportation of a U.S.-manufactured drug by anyone other
in the United States. Current law generally does not permit
than the manufacturer (FFDCA Section 801(d)(1)(A)).
individuals to import or reimport prescription drugs for
Reimportation by anyone other than the original
their own use; instead, it directs the Secretary to exercise
manufacturer of a U.S.-manufactured drug is illegal even if
discretion to permit importation on a case-by-case basis by
it meets all of the requirements for approval under the
an individual for drugs that are clearly for personal use, if
FFDCA because it could have been mishandled or
such use does not appear to present an unreasonable risk to
otherwise adulterated when it was outside of the reach of
the individual. FFDCA Section 804(j) provides the statutory
FDA. FFDCA Section 801(d)(2) allows for an exception to
basis for the FDA waiver authority outlined in the PIP
this prohibition, allowing for the Health and Human
guidance.
Services (HHS) Secretary to authorize the reimportation of
a U.S.- manufactured drug where required for emergency
FDA has chosen to relatively leniently enforce the current
medical care, or under FFDCA Section 804, as described
prohibition, and has generally allowed individuals to bring
below.
into the United States a small amount (i.e., a 90-day supply)
of unapproved drugs for personal use where effective
The provision prohibiting the reimportation of U.S.-
treatment is not available in the United States, it is for the
manufactured drugs was put in place in 1987 in an effort to
treatment of a serious medical condition, and there is no
ensure a “closed system” for all prescription drugs
commercialization of the drug to U.S. residents. This FDA
marketed in the United States. Proponents of this
policy requires those individuals to affirm in writing that
prohibition argued that it protected against the possibility of
the drugs are for their own use and to provide their
prescription drugs that were manufactured in the United
physician’s contact information. FDA’s PIP is not intended
States and then exported from being brought onto the
as a way for consumers to bring lower-priced prescription
American market in possibly subpotent, mislabeled,
drugs into the United States; rather, FDA intended this
adulterated, expired, or counterfeit form. Manufacturer
enforcement discretion to allow individuals to get
reimportation was permitted to allow for standard inventory
treatments not otherwise available in the United States.
control practices within the industry.
Prescription Drug Price and Importation
Importation that Is Allowed Under Current Law
It is not clear how or if expanding legal drug importation
FFDCA Section 804. Section 804 gives the HHS Secretary
would affect cost for U.S. consumers and payers. Several
authority to promulgate regulations to establish a drug
bills introduced in the 115th Congress would authorize
importation program under which pharmacists and
importation of prescription drugs, subject to specified
wholesalers could import unapproved prescription drugs
requirements, from countries where they may be less
from Canada into the United States, with certain
expensive. Proposals to expand drug importation have been
qualifications. Specifically, the provision provides that the
opposed by several former FDA Commissioners and HHS
program cannot become effective until the HHS Secretary
Secretaries, as well as by the pharmaceutical industry,
certifies that the importation program would pose no
citing safety concerns. In particular, the former
additional risk to the public’s health and safety and would
Commissioners wrote in a March 2017 letter to Congress
offer “significant reduction in the cost” to U.S. consumers.
that “drugs purchased from foreign countries may be
So far, because of concerns over safety, no Secretary has
substandard, unsafe, adulterated, or fake” and “FDA lacks
ever given such approval.
the resources needed to oversee a major importation
program.” Other stakeholders have proposed allowing for
Drug Shortages. Current law allows FDA to take various
drug importation in limited circumstances, for example, if a
actions when a drug is in shortage, including expediting
manufacturer raises the price of an older, off-patent
application review and facility inspection. One available
medication. Groups such as the American Medical
option (now under FFDCA Section 801(d)(1)(B)) is that the
Association (AMA) and the Association of American
HHS Secretary may choose to exercise enforcement
Retired Persons (AARP) have expressed support for
discretion and allow the temporary and tightly controlled
policies that would provide for importation or reimportation
importation and distribution of unapproved drugs to
of lower-cost drugs for personal use in a way that ensures
alleviate a drug shortage while domestic production gets
drug safety and integrity. In July 2018, FDA announced
back up to speed. This is generally done very rarely, only
that it was establishing a working group to explore the
after other options (e.g., diverting manufacturing to another
feasibility of drug importation from other countries in the
facility, working with a facility to address quality issues)
case of a price increase for a sole source off-patent, off-
are considered. In response to Hurricane Maria, for
exclusivity drug.
example, FDA used “regulatory flexibility and discretion”
to allow for the temporary importation of drugs not
Amanda K. Sarata, Specialist in Health Policy
Agata Dabrowska, Analyst in Health Policy
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Prescription Drug Importation

IF11056


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