Prescription Drug Importation




Updated February 11, 2021
Prescription Drug Importation
In the context of rising drug prices, the possibility of
FFDCA for approval. Current law prohibits the introduction
importing prescription drugs from other countries at lower
into interstate commerce of a drug that is unapproved,
prices is again being debated. Generally, the importation or
adulterated (e.g., held under insanitary conditions), or
reimportation of a prescription drug that does not meet
misbranded (e.g., the labeling does not include adequate
Food and Drug Administration (FDA) requirements is
directions for use) [FFDCA Sections 505(a), 301(a), (d)].
prohibited. The policy debate has centered on creating a
new legal option for the import of prescription drugs into
Commercial Use. FFDCA Section 801(d)(1)(B) explicitly
the United States at lower cost than the same drugs
prohibits the importation for commercial use of unapproved
available domestically.
drugs manufactured outside of the United States, with two
exceptions: (1) as authorized by the Secretary of Health and
Prescription Drug Regulation
Human Services (HHS) pursuant to a drug shortage, and (2)
FDA, under the Federal Food, Drug, and Cosmetic Act
pursuant to the authority at FFDCA Section 804, both of
(FFDCA), regulates prescription drugs. In order to market a
which are discussed in the next section. This prohibition
new drug in the United States, a manufacturer must obtain
does not apply to drugs when, although manufactured
approval from FDA by submitting a new drug application
outside of the United States, the manufacturer has
(NDA), or in the case of a generic drug, an abbreviated
authorized them to be marketed in the United States and has
NDA (ANDA). To get approval, the manufacturer must (1)
labeled them according to relevant FFDCA requirements.
demonstrate the drug’s safety and effectiveness according
to criteria specified in law and regulation, (2) ensure that its
Reimportation. Current law also prohibits the
manufacturing facility passes FDA inspection, and (3)
reimportation of a U.S.-manufactured drug by anyone other
obtain approval for the drug’s labeling. Drugs made in
than the manufacturer (FFDCA Section 801(d)(1)(A)).
foreign countries that are imported into the United States
Reimportation by anyone other than the original
for commercial distribution must comply with the same
manufacturer of a U.S.-manufactured drug is illegal even if
FFDCA requirements as domestically manufactured drugs,
it meets all of the requirements for approval under the
including registration and premarket approval. A drug
FFDCA because it could have been mishandled or
manufacturer may import drugs produced abroad that have
otherwise adulterated when it was outside of the reach of
not yet received approval (e.g., drugs intended for further
FDA. FFDCA Section 801(d)(2) allows for an exception to
processing) by complying with FDA and U.S. Customs and
this prohibition, allowing for the HHS Secretary to
Border Protection (CBP) requirements. See CRS Report
authorize the reimportation of a U.S.-manufactured drug
R41983, How FDA Approves Drugs and Regulates Their
where required for emergency medical care, or under
Safety and Effectiveness, and CRS Report R46507, FDA’s
FFDCA Section 804, as described below.
Role in the Medical Product Supply Chain and
Considerations During COVID-19
.
The provision prohibiting the reimportation of U.S.-
manufactured drugs was put in place in 1987 in an effort to
Prescription Drug Importation
ensure a “closed system” for all prescription drugs
Foreign-made versions of FDA-approved drugs that have
marketed in the United States. Proponents of this
not been evaluated through the FDA process are typically
prohibition argued that it protected against the possibility of
considered unapproved new drugs and are illegal. The
prescription drugs that were manufactured in the United
FFDCA provides for the circumstances under which an
States and then exported from being brought onto the
unapproved drug may be imported into the United States.
American market in possibly subpotent, mislabeled,
This section discusses the circumstances under which
adulterated, expired, or counterfeit form. Manufacturer
importation is prohibited, as well as the circumstances
reimportation was permitted to allow for standard inventory
under which it is allowed.
control practices within the industry.
Importation That Is Prohibited Under Current Law Importation That Is Allowed Under Current Law
Under current law, the importation of unapproved new
FFDCA Section 804. Section 804 gives the HHS Secretary
drugs, including foreign-made versions of FDA-approved
authority to promulgate regulations to establish a drug
drugs, is generally prohibited. This would entail bringing
importation program under which pharmacists and
into the United States an unapproved drug manufactured
wholesalers could import unapproved prescription drugs
outside of the United States. Even in cases where the drug
from Canada into the United States, with certain
is a foreign-made version of an FDA-approved drug (i.e.,
qualifications. Specifically, the provision provides that the
the same active ingredient made by the same manufacturer),
program cannot become effective until the HHS Secretary
FDA has stated that it is highly unlikely that the version for
certifies that the importation program would pose no
the foreign market would meet all of the requirements in the
https://crsreports.congress.gov

Prescription Drug Importation
additional risk to the public’s health and safety and would
versions of drugs marketed in the United States under an
offer “significant reduction in the cost” to U.S. consumers.
NDA or ANDA. Consistent with the statutory language of
Section 804, certain drugs are ineligible for importation,
Until recently, no Secretary has ever given such approval.
including biologics (e.g., insulin) and intravenously injected
However, on September 23, 2020, former HHS Secretary
drugs, among others. Although then-Secretary Azar made
Alex Azar made the requisite certification in a letter to
the necessary certification, the final rule requires SIP
Congress. HHS and FDA subsequently promulgated a final
sponsors to demonstrate that their program will pose no
rule to implement Section 804 (described further below).
additional risk to the public’s health and safety and to
explain how they will ensure their SIP will result in a
Drug Shortages. Current law allows FDA to take various
significant reduction in the cost of covered products to
actions when a drug is in shortage, including expediting
consumers. Proposals must specify the eligible drugs to be
application review and facility inspection. One available
included in the SIP, which would have to bear the required
option (now under FFDCA Section 801(d)(1)(B)) is that the
U.S. labeling and undergo testing for quality and
HHS Secretary may choose to exercise enforcement
authenticity, in addition to meeting other supply chain
discretion and allow the temporary and tightly controlled
requirements. SIP proposals also must identify the foreign
importation and distribution of unapproved drugs to
seller in Canada that will purchase the eligible prescription
alleviate a drug shortage while domestic production gets
drug directly from its manufacturer, as well as the U.S.
back up to speed. This is generally done very rarely, only
importer that will purchase the drug directly from the
after other options (e.g., diverting manufacturing to another
foreign seller. Both the foreign seller and importer would be
facility, working with a facility to address quality issues)
subject to applicable U.S. registration and licensure
are considered. In response to Hurricane Maria, for
requirements and supply chain security requirements.
example, FDA used “regulatory flexibility and discretion”
to allow for the temporary importation of drugs not
FDA also issued final guidance to implement the second
approved for use in the United States and manufactured in
pathway (under FFDCA Section 801(d)(1)(B)) to facilitate
other countries (e.g., Ireland, Mexico, and Canada).
importation of foreign-made versions of FDA-approved
drugs under their existing U.S. approval. The guidance
Personal Importation Policy (PIP). As outlined in FDA
applies to drug manufacturers, offering them an option to
guidance, the agency allows some personal importation of
import drugs that may provide lower-cost alternatives to
unapproved drugs on a case-by-case basis, but one of the
U.S. consumers. This is in contrast to the final rule, which
criteria that FDA lists in allowing this personal importation
creates a mechanism for importation by entities other than
is that there can be no existing effective treatment available
the drug manufacturer and does not require a
in the United States. Current law generally does not permit
manufacturer’s authorization. Also unlike the final rule, the
individuals to import or reimport prescription drugs for
policy in the guidance applies to small molecule drugs and
their own use; instead, it directs the Secretary to exercise
biologics and is not limited to importation from Canada.
discretion to permit importation on a case-by-case basis by
an individual for drugs that are clearly for personal use, if
Prescription Drug Price and Importation
such use does not appear to present an unreasonable risk to
In the 116th and 117th Congress, legislation to expand legal
the individual. FFDCA Section 804(j) provides a statutory
drug importation has been introduced, and some
basis for the FDA waiver authority outlined in the PIP
stakeholders have expressed support for policies that would
guidance, although the FDA issued the guidance prior to the
allow importation or reimportation of lower-cost drugs for
establishment of Section 804.
personal use in a way that ensures drug safety and integrity.
However, it is not clear how or if such policies would affect
FDA has generally allowed individuals to bring into the
costs for U.S. consumers and payers. With respect to the
United States a 90-day supply of unapproved drugs for
final rule, to date, HHS has not authorized any SIPs, and at
personal use where effective treatment is not available in
least one lawsuit has been filed challenging the rule. With
the United States, it is for the treatment of a serious medical
respect to the guidance, it provides an option for drug
condition, and there is no commercialization of the drug to
manufacturers, but it is not clear how many manufacturers
U.S. residents. FDA’s PIP is not intended as a way for
are interested in importing drugs intended for foreign
consumers to bring lower-priced prescription drugs into the
markets. Further, other countries may be reluctant to
United States; rather, FDA intended this enforcement
support U.S. importation policies, as it may affect their own
discretion to allow individuals to get treatments not
domestic supply of drugs. For example, Canadian officials
otherwise available in the United States.
reportedly have opposed U.S. importation proposals and in
November 2020, the Canadian government announced that
Safe Importation Action Plan
certain drugs intended for the Canadian market may not be
In July 2019, HHS and FDA announced the “Safe
sold outside of Canada if such sale would cause or worsen a
Importation Action Plan,” proposing two pathways to allow
drug shortage. Proposals to expand drug importation have
or facilitate the importation of unapproved drugs. On
been opposed by several former FDA Commissioners and
September 23, 2020, HHS and FDA promulgated a final
HHS Secretaries, as well as by the pharmaceutical industry,
rule pursuant to FFDCA Section 804 to implement the first
citing safety concerns. Given these concerns and the change
pathway. The rule allows states and tribes to submit to HHS
in Administration, the implementation of these importation
for review Section 804 Importation Program (SIP)
policies remains uncertain.
proposals to permit the importation of certain prescription
drugs from Canada, specifically Health Canada-approved
Agata Bodie, Analyst in Health Policy
https://crsreports.congress.gov

Prescription Drug Importation

IF11056
Amanda K. Sarata, Specialist in Health Policy


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https://crsreports.congress.gov | IF11056 · VERSION 5 · UPDATED