Updated November 21, 2019
Prescription Drug Importation
In the context of rising drug prices, the possibility of
inspections. Preapproval inspections are part of the drug
importing prescription drugs from other countries at lower
approval process, while surveillance inspections are
prices is again being debated. Generally, the importation or
conducted once a drug is on the market to assess
reimportation of a prescription drug that does not meet
compliance with manufacturing standards. For-cause
Food and Drug Administration (FDA) requirements is
inspections are to investigate, for example, complaints from
prohibited. The policy debate largely has been around
the public about a drug or concerns about its quality. FDA
creating a new legal option for the import of prescription
is required to conduct surveillance inspections of both
drugs into the United States at lower cost than the same
domestic and foreign establishments using a risk-based
drugs available domestically. This has raised concern from
approach (FFDCA Section 510(h)).
stakeholders about drug safety and the feasibility of such a
program.
Many prescription drugs that are sold in the United States
are manufactured, at least in part, abroad. FDA estimates
Prescription Drug Regulation
that in 2018, 88% of facilities making APIs and 63% of
FDA, under the Federal Food, Drug, and Cosmetic Act
sites making finished drugs were located overseas. FDA has
(FFDCA), regulates prescription drugs. In order to market a
foreign offices around the world and the agency recognizes
new drug in the United States, a manufacturer must obtain
inspections conducted by certain foreign regulatory
approval from FDA. To get that approval, the manufacturer
authorities within the European Union and relies upon their
must (1) demonstrate the drug’s safety and effectiveness
inspection data.
according to criteria specified in law and regulation, (2)
ensure that its manufacturing facility passes FDA
Prescription Drug Importation
inspection, and (3) obtain approval for the drug’s labeling.
Foreign-made versions of FDA-approved drugs that have
not been evaluated through the FDA process are typically
Pre-market Approval
considered unapproved new drugs and are illegal. The
FDA’s prescription drug approval requirements apply to all
FFDCA provides for the circumstances under which an
manufacturers that market drugs in the United States,
unapproved drug may be imported into the United States.
regardless of whether the manufacturing facility is located
This section discusses the circumstances under which
domestically or in a foreign country. Thus, before a drug
importation is prohibited, as well as the circumstances
manufactured in a foreign country is imported into the
under which it is allowed.
United States for commercial use, it must be approved by
FDA. To obtain approval, the manufacturer must submit a
Importation That Is Prohibited Under Current Law
New Drug Application (NDA), or in the case of a generic
Under current law, the importation of unapproved new
drug, an abbreviated NDA (ANDA), which must include,
drugs, including foreign-made versions of FDA-approved
among other things, information about the facility in which
drugs, is generally prohibited. This would entail bringing
it was manufactured, a product description (e.g., chemical
into the United States an unapproved drug manufactured
formulation), processing methods, manufacturing controls,
outside of the United States. Even in cases where the drug
and labeling. An active pharmaceutical ingredient (API) is
is a foreign-made version of an FDA-approved drug (i.e.,
defined as “any substance that is represented for use in a
the same active ingredient made by the same manufacturer),
drug and that, when used in the manufacturing, processing,
FDA has stated that it is highly unlikely that the version for
or packaging of a drug, becomes an active ingredient or a
the foreign market would meet all of the requirements in the
finished dosage form of the drug” (21 CFR §203.3(e)). An
FFDCA for approval. FFDCA Sections 505(a) and 301(d)
API may be imported into the United States if it is the
prohibit the introduction of an unapproved drug into
subject of a valid NDA or investigational new drug
interstate commerce, and FFDCA Section 301(a) prohibits
application (IND) if it is to be used for laboratory research
the introduction into interstate commerce of a drug that is
or clinical trials and meets other specified requirements.
adulterated (e.g., held under insanitary conditions) or
misbranded (e.g., the labeling does not include adequate
Facility Inspection
directions for use).
Domestic facilities that engage in the “manufacture,
preparation, propagation, compounding or processing” of a
Commercial Use. FFDCA Section 801(d)(1)(B) explicitly
drug, and foreign facilities that engage in the “manufacture,
prohibits the importation for commercial use of unapproved
preparation, propagation, compounding or processing” of a
drugs manufactured outside of the United States, with two
drug that is imported into the United States, whether an API
exceptions: (1) except as authorized by the Secretary of
or the finished form of the drug, must register with FDA
Health and Human Services (HHS) pursuant to a drug
(FFDCA Section 510) and are subject to FDA inspection.
shortage, and (2) pursuant to the authority at FFDCA
FDA conducts preapproval, surveillance, and for-cause
Section 804, both of which are discussed in the next
https://crsreports.congress.gov

---

Prescription Drug Importation
section. This does not apply to those drugs that are
Personal Importation Policy (PIP). As outlined in FDA
manufactured outside of the United States and are
guidance, the agency allows some personal importation of
authorized to be marketed in the United States and are
unapproved drugs on a case-by-case basis, but one of the
labeled according to the relevant requirements in the
criteria that FDA lists in allowing this personal importation
FFDCA (i.e., drugs that are FDA-approved).
is that there can be no existing effective treatment available
in the United States. Current law generally does not permit
Reimportation. Current law also prohibits the
individuals to import or reimport prescription drugs for
reimportation of a U.S.-manufactured drug by anyone other
their own use; instead, it directs the Secretary to exercise
than the manufacturer (FFDCA Section 801(d)(1)(A)).
discretion to permit importation on a case-by-case basis by
Reimportation by anyone other than the original
an individual for drugs that are clearly for personal use, if
manufacturer of a U.S.-manufactured drug is illegal even if
such use does not appear to present an unreasonable risk to
it meets all of the requirements for approval under the
the individual. FFDCA Section 804(j) provides a statutory
FFDCA because it could have been mishandled or
basis for the FDA waiver authority outlined in the PIP
otherwise adulterated when it was outside of the reach of
guidance, although the FDA issued the guidance prior to the
FDA. FFDCA Section 801(d)(2) allows for an exception to
establishment of Section 804.
this prohibition, allowing for the HHS Secretary to
authorize the reimportation of a U.S.-manufactured drug
FDA has generally allowed individuals to bring into the
where required for emergency medical care, or under
United States a 90-day supply of unapproved drugs for
FFDCA Section 804, as described below.
personal use where effective treatment is not available in
the United States, it is for the treatment of a serious medical
The provision prohibiting the reimportation of U.S.-
condition, and there is no commercialization of the drug to
manufactured drugs was put in place in 1987 in an effort to
U.S. residents. FDA’s PIP is not intended as a way for
ensure a “closed system” for all prescription drugs
consumers to bring lower-priced prescription drugs into the
marketed in the United States. Proponents of this
United States; rather, FDA intended this enforcement
prohibition argued that it protected against the possibility of
discretion to allow individuals to get treatments not
prescription drugs that were manufactured in the United
otherwise available in the United States.
States and then exported from being brought onto the
American market in possibly subpotent, mislabeled,
Prescription Drug Price and Importation
adulterated, expired, or counterfeit form. Manufacturer
It is not clear how or if expanding legal drug importation
reimportation was permitted to allow for standard inventory
would affect cost for U.S. consumers and payers. Several
control practices within the industry.
bills introduced in the 116th Congress would authorize both
personal and commercial importation of unapproved
Importation That Is Allowed Under Current Law
prescription drugs, subject to specified requirements, from
FFDCA Section 804. Section 804 gives the HHS Secretary
countries where they may be less expensive. In addition, in
authority to promulgate regulations to establish a drug
July 2019, HHS announced its “Safe Importation Action
importation program under which pharmacists and
Plan.” This plan proposes to establish, relying on both
wholesalers could import unapproved prescription drugs
Section 804 and Section 801(d) authorities, two pathways
from Canada into the United States, with certain
to allow for the importation of unapproved drugs into the
qualifications. Specifically, the provision provides that the
country. The first pathway—through rulemaking—would
program cannot become effective until the HHS Secretary
propose to allow states, pharmacists, and wholesalers to
certifies that the importation program would pose no
submit to HHS for review and possible approval plans for
additional risk to the public’s health and safety and would
demonstration projects to import certain Health Canada-
offer “significant reduction in the cost” to U.S. consumers.
approved drugs into the country. The second pathway—
Thus far, no Secretary has ever given such approval.
through guidance—would allow foreign-made versions of
FDA-approved drugs to be imported into the United States
Drug Shortages. Current law allows FDA to take various
under the existing approval for the FDA-approved version
actions when a drug is in shortage, including expediting
of the drug. This second pathway would depend on the
application review and facility inspection. One available
manufacturer being able to successfully demonstrate that
option (now under FFDCA Section 801(d)(1)(B)) is that the
the foreign-made version is identical to the version
HHS Secretary may choose to exercise enforcement
approved for U.S. marketing. Generally, proposals to
discretion and allow the temporary and tightly controlled
expand drug importation have been opposed by several
importation and distribution of unapproved drugs to
former FDA Commissioners and HHS Secretaries, as well
alleviate a drug shortage while domestic production gets
as by the pharmaceutical industry, citing safety concerns.
back up to speed. This is generally done very rarely, only
Groups such as the American Medical Association (AMA)
after other options (e.g., diverting manufacturing to another
have expressed support for policies that would provide for
facility, working with a facility to address quality issues)
importation or reimportation of lower-cost drugs for
are considered. In response to Hurricane Maria, for
personal use in a way that ensures drug safety and integrity.
example, FDA used “regulatory flexibility and discretion”
to allow for the temporary importation of drugs not
Amanda K. Sarata, Specialist in Health Policy
approved for use in the United States and manufactured in
Agata Dabrowska, Analyst in Health Policy
other countries (e.g., Ireland, Mexico, and Canada).
IF11056
https://crsreports.congress.gov

---

Prescription Drug Importation


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF11056 · VERSION 4 · UPDATED

---