Prescription Drugs: Importation for Personal Use

Prescription Drugs: Importation for Personal Use

Order Code RS20996
August 24, 2001
CRS Report for Congress
Received through the CRS Web
Prescription Drugs:
Importation for Personal Use
Donna U. Vogt
Blanchard Randall IV
Domestic Social Policy Division
Summary
The 107th Congress, concerned about the high costs of pharmaceuticals in the
United States, is considering legislation that would give U.S. citizens the legal right to
import less costly prescription drugs from foreign countries. The House, in the FY2002
appropriations for the Department of Agriculture (H.R. 2330), adopted an amendment,
sponsored by Representative Gutknecht that would let persons, who are not commercial
drug importers import prescription drugs for personal use. Under the amendment, drugs
must be Food and Drug Administration (FDA) approved, non-narcotic, and
manufactured in an FDA-registered facility. In the Senate, a different proposal to allow
drug imports (S.1229) was introduced by Senator Wellstone. It would allow patients to
import prescription drugs if they are FDA-approved, non-narcotic, made in FDA-
registered facilities, originate from specified countries, and are accompanied by a special
import form. FDA would have to keep records of the drugs imported. These proposals
would change FDA’s current “personal use import policy,” which lets patients with life-
threatening conditions (i.e., AIDs or cancer, etc.) bring small quantities of unapproved
drugs into this country for personal use, to one that lets patients import approved
prescription drugs for personal use. The proposals were introduced when the past and
present Secretaries of Health and Human Services (HHS) declined to implement last
year’s Medicine Equity and Drug Safety Act (MEDS), legislation which would have let
pharmacists and drug wholesalers import drugs originally made in the United States.
According to the Secretaries, the MEDS Act would have raised health risks and not
lowered the cost of prescription drugs. Also, they were worried that the program might
make it easier for counterfeit drugs to enter the country.
Introduction
In recent years, the cost of prescription drugs has become a major issue for Congress.
At present, U.S. consumers, particularly the elderly and uninsured, oftentimes pay more
for prescription drugs than citizens in other countries. This price disparity has prompted
some Americans to purchase cheaper prescription drugs through the Internet, by mail-
order, or by traveling outside the United States, often to nearby Canada or Mexico.
Congressional Research Service ˜ The Library of Congress

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To address these concerns, the 106th Congress passed the Medicine Equity and Drug
Safety Act (MEDS). The MEDS Act would have let pharmacists and drug wholesalers
re-import FDA-approved prescription drugs previously manufactured in the United States.
However, Congress said that the new law could not be implemented unless the Secretary
of Health and Human Services (HHS) could show that the Act would result in a cost
savings for imported prescription drugs and not pose additional risks to public health. (See
Text Box) Saying they were unable to meet these conditions, both the past and present
Secretaries of HHS, declined to implement the law stating that prescription drug safety
could not be adequately guaranteed if drug re-importation were allowed under the MEDS
Act.1 Secretary Tommy G. Thompson, further explained that the costs associated with
documenting, sampling and testing of imported drugs, as the Act requires, would make it
difficult for consumers to get any significant price savings.
Summary of Drug Import Provisions
in the Agriculture Appropriations Act for FY2001
Medicine Equity and Drug Safety Act (MEDS). The 106th Congress passed the MEDS Act
in October 2001, as part of the FY2001 agriculture appropriations law (P.L. 106-387). An
amendment to the Federal Food, Drug, and Cosmetic Act (FFDCA), the law established a 5-year
import program to allow pharmacists and drug wholesalers to import less costly prescription
drugs into the United States. The following summarizes two of the legislation’s major clauses
as enacted:
Regulations and Limitations. Under the MEDS Act, the Secretary of HHS was to have
promulgated regulations that would have guaranteed that all drugs imported under the program
would be FDA-approved, tested for authenticity, and be properly labeled before distribution.
Conditions. Before the Act could be implemented, the Secretary had to demonstrate to
Congress that its implementation would pose no additional risk to public health and safety, and
would result in a significant reduction in the cost of drugs for U.S. consumers.
Prescription Drug Import Fairness Act of 2000. This Act, also passed as part of the FY2001
agriculture appropriations law, prevents FDA from sending warning letters to persons who
import drugs for personal treatment unless the agency specifies how the import violates the law.
The MEDS Act was never implemented by either Secretary of HHS. The Prescription Drug
Import Fairness Act, however, is currently in effect.
Subsequently, some Members of the 107th Congress have looked for other legislative
ways to deal with the drug pricing issue. On July 12, 2001, the House agreed to an
amendment by Representative Gutknecht to the FY2002 appropriations bill for the
Department of Agriculture (H.R. 2330), that would let U.S. citizens who are not in the
drug importation business import FDA-approved, non-narcotic prescription drugs for
personal use. On July 24, 2001, Senator Wellstone introduced the Personal Prescription
Drug Import Fairness Act (S. 1229), that would also let individuals import prescription
drugs, if they meet the requirements in the bill. While these measures are similar (i.e., both
would allow patients to import FDA-approved, non-narcotic prescription drugs), they also
1 “Secretary Thompson Determines That Safety Problems Make Drug Reimportation Unfeasible,”
HHS News, Press Release July 10, 2001. [http//:www.hhs.gov/news]

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have their differences. The House-passed amendment would let persons import
prescription drugs for personal use from any country. The Wellstone bill, however, would
only let persons import drugs from specified countries,2 and only if accompanied by an
import form. The Senate bill would also require FDA to keep records of all drugs
imported.
Background
Under the Federal Food, Drug, and Cosmetic Act (FFDCA), all drugs have to be
proven safe and effective before they can be marketed in the United States. To gain FDA
approval, foreign or domestic drug manufacturers must first submit New Drug
Applications (NDAs) which include reports of clinical studies documenting safety and
efficacy. As the NDA is being evaluated, the agency inspects the plant and the production
line where the new drug will be manufactured to ensure that it will be made to
specification and in accordance with good manufacturing practices (GMPs). Also, it
approves the companies that supply the raw ingredients that go into making the final
product. As these inspections are carried out, other FDA officials check the drug’s
labeling to make sure that it is both accurate and comprehensive. Pharmaceuticals
imported into the United States, whether they were originally made here or abroad, must
be FDA-approved and properly labeled. Imported drugs have to be accompanied by
information telling where they were made, the name and address of the importer, and
evidence that the drugs were made in an FDA-inspected facility following proper GMPs.
Imported pharmaceuticals that do not meet U.S. standards are considered “unapproved”
drugs and cannot be imported legally. To reduce the chance that adulterated or subpotent
drugs could enter a U.S. retail pharmacy, Congress passed the 1987 Prescription Drug
Marketing Act (P.L. 100-293). The law made it illegal for anyone other than the original
manufacturer to import a drug back into the United States.
Today, both U.S. Customs and FDA officials have broad authority to deny entry to
imported drug products that “appear” to violate U.S. regulatory requirements. For
enforcement purposes, the FDA separates imported prescription drugs into three
categories: (1) drugs for commercial distribution; (2) prescription drugs that arrive by mail
or common carrier; or (3) prescription drugs that are brought into the country by persons
passing through customs.
FDA’s Current Mail and Personal Use Import Policy. Although it is illegal
to import unapproved drugs into the United States, the FDA, for years, has maintained a
policy that lets patients bring a small amount (i.e., a 90-day supply) of non-FDA approved
drugs into this country for compassionate use. The so-called “personal use import policy”
makes it easier for patients with life-threatening diseases (such as AIDS) to bring therapies
into this country to be treated by their personal physician.3 Under the policy, drugs cannot
be imported commercially, and patients must affirm in writing that the drug is for personal
use and provide the name and address of their physician. Enforcing the personal use policy
often requires a lot of discretion on the part of FDA and Customs inspectors. When drugs
2 Australia, Canada, European Economic Area (including the European Union, Norway, Iceland,
and Liechtenstein), Israel, Japan, New Zealand, South Africa, or Switzerland.
3 U.S. Food and Drug Administration. [http://www.fda.gov/ora/import/pipinfo.htm].

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are brought into this country for personal use today, they are either carried in by persons,
or arrive via the mail, after being purchased from pharmacies operating over the Internet.
When the personal use import policy was established, it was never intended to be a
way for patients to bring lower priced drugs into this country; nor was it a means for
patients to buy drugs that are already available in the United States. While the policy has
not changed, where it once let patients import drugs for compassionate use, today it is
being used to import drugs to treat all kinds of medical conditions, by patients seeking
lower price prescription drugs from other countries.4 Over time, FDA’s import policy,
and its discretionary enforcement, have led to a dramatic increase in drug imports. Today,
this increase has become a major concern of both FDA and the Customs Service.
Earlier this year, in order to determine the amount and types of drugs being imported
through the mail, the FDA and Customs conducted a 5-week survey of drugs entering the
United States by mail in Carson City, California. According to the agencies, many of the
drugs detained during the survey were for treating health conditions that normally require
a doctor’s diagnosis.5 This finding raised the concern that patients who obtain prescription
drugs without a doctor’s prescription may be exposing themselves to serious risks. During
a June 7, 2001 congressional hearing on drug import policy, the FDA said that it was on
the verge of recommending that the Secretary of HHS end the practice of allowing drugs
imported via the mail, as long as there was an exception for drugs intended for
compassionate use.6 The large number of drugs entering the country by mail has become
an enforcement problem, and FDA’s concern is that government inspectors cannot, with
any assurance, determine whether the products being shipped are safe.
The Gutknecht Amendment
When the House considered the FY2002 appropriations bill for the Department of
Agriculture, it agreed to an amendment sponsored by Representative Gutknecht, that
would allow individuals to bring FDA-approved drugs into the United States for personal
use. The text of the amendment says:
None of the amounts made available in this Act for the Food and Drug Administration
may be used under section 801 of the Federal Food, Drug and Cosmetic Act to prevent
an individual who is not in the business of importing prescription drugs within the
meaning of section 801(g) of such Act from importing a prescription drug that (1)
appears to be FDA-approved, (2) does not appear to be a narcotic drug; and (3) appears
to be manufactured, prepared, propagated, compounded, or processed in an
establishment registered pursuant to section 510 of such Act.7
4 U.S. citizens who want to have their prescriptions filled by Canadian pharmacies must have the
prescription confirmed by a Canadian physician before the pharmacy will fill it.
5 Hubbard, William K., Senior Associate Commissioner for Policy Planning and Legislation, Food
and Drug Administration. Statement before the Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce, June 7, 2001.
6 Ibid.
7 Section 801(g) was enacted by the Prescription Drug Import Fairness Act of 2000 to keep the
(continued...)

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The amendment would likely make it easier for U.S. citizens to bring less costly
prescription drugs into this country for personal use. It prohibits the commercial
importation of prescription drugs, as well as the importation of narcotic products. The
amendment would allow all drugs that appear to be FDA-approved to be imported. FDA
believes that it would still have the authority to stop drug imports from entering this
country, but only if it proved that the imported drug violated the law.
The Personal Prescription Drug Import Fairness Act (S. 1229)
On July 24, 2001, Senator Wellstone introduced a bill entitled the Personal
Prescription Drug Import Fairness Act. In essence, the bill would create a legal
framework for FDA’s current policy that allows patients to import small amounts of drugs
for compassionate use and extend it for treatments of other health conditions. It would
amend the FFDCA to require the Secretary of HHS, in consultation with the U.S. Trade
Representative and the Commissioner of Customs, to promulgate regulations to let
individuals, either in person or by mail, bring a 90-day supply of prescription drugs into
the country for personal use. All drugs imported under the measure, would have to be
FDA-approved, be made in FDA-registered facilities, come from designated countries, be
in a finished form, and could not be resold in this country.
Prescription drugs, either brought in by individuals or mailed into this country, would
have to be accompanied by a new “import form.” The form must include the name,
address and telephone number of the patient, the pharmacy that dispensed the drug, and
the place where it was manufactured. It must also include the name of the patient’s doctor
in the United States responsible for treatment with the prescription drug, or evidence that
the drug is for the continuation of treatment that began outside of the United States.
Under the bill, the Secretary would be required to maintain records of each
prescription drug imported. Additionally, the Secretary would have to make publically
available a list of FDA-approved drugs that could be imported for personal use that: 1) are
manufactured outside of the United States; or 2) are U.S. made but intended for export.
Legislative Issues
Prescription Drug Costs. Supporters of the proposals contend that, as long as
drug price disparities continue between countries, consumers will benefit from being able
to purchase lower cost pharmaceuticals from other countries. Given that many foreign
governments impose strict controls on drug prices, it would be difficult to determine a set
of circumstances that might eliminate the price differences that are currently driving
demand for foreign prescription drugs.
Product Integrity and Inspection Issues. Some believe that FDA’s current
compassionate use policy favors the import of unapproved drugs over approved drugs. To
7 (...continued)
FDA from sending to individuals who import drugs for personal use warning letters about the
illegality and potential health risks of imported drugs, unless the agency specifies how the import
violates the law. Section 510 requires the registration of drug manufacturing facilities, whether or
not they are in the United States or abroad.

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address this, the House amendment would change the policy so that a greater number of
prescription drugs could be imported. In addition, it would not impose any special
requirements on prescriptions obtained from foreign pharmacies. If these changes become
law, FDA claims that it would be unable to guarantee the integrity of these drugs since its
inspectors would have a hard time examining every parcel and determining the quality of
its contents. Under such circumstances, FDA has stated that it would be “buyer beware”
for consumers who decide to import prescription drugs. The Senate bill provides for a
more formal system for checking the safety of imported drugs, but also does not guarantee
the integrity of the drugs by FDA standards. All imported drugs would need an import
form disclosing the name of the patient, the address of the dispensing pharmacy, the name
of the health care provider or evidence that the drug was for treating a health condition
that began overseas, and where the drug was made. However, the success of such a
system would, in all likelihood, depend on consumers being able to make purchases and
obtain approved drugs without undue administrative hardships.
Lack of Physician Involvement. FDA is concerned that under the House-passed
bill many patients who order prescription drugs via Internet pharmacies do not necessarily
do so with a doctor’s prescription. In some instances, there may be no doctor-patient
relationship whatsoever. At times, prescription drugs can produce side effects known only
to professional health care providers. Without professional oversight, some drugs can
pose serious health risks. The Senate bill would require the name of the patient’s doctor,
or evidence showing that the drug is for treatment that began outside of the United States.
FDA Enforcement Issues. The United States has the most rigorous system for
ensuring drug safety in the world. Before drugs can be marketed, they have to be FDA-
approved, labeled properly, manufactured in FDA inspected facilities, and sold through
licensed distributors and pharmacists. Currently, the FDA has broad authority to stop the
importation of a drug if the agency suspects it is unapproved or does not appear to meet
U.S. standards. The House-passed amendment states that a drug can be imported if it
“appears to be FDA-approved.” If the amendment becomes law, FDA is concerned that
it would first have to allow drugs to enter the country that appear to be approved, and then
prove that the imported drug was not FDA-approved before denying entry. This could
make it more difficult for the agency to keep adulterated or counterfeit drugs from
entering the country if they appear to be FDA-approved and comply with U.S.
regulations.8 The Senate bill, on the other hand, would require FDA to keep records of
all prescription drugs imported for personal use. In addition, the agency would have to
compile and make public a list of FDA-approved drugs, manufactured both inside and
outside the United States, that can be imported into the country. FDA contends that these
requirements would add extensive monitoring responsibilities for the agency and might not
necessarily increase the safety of imported prescription drugs.
8 Hubbard, William K., Senior Associate Commissioner for Policy, Planning, and Legislation,
Food and Drug Administration. Letter to the Honorables W.J. “Billy” Tauzin, Chairman, and John
Dingell, Ranking Minority Member, Committee on Energy and Commerce, House of
Representatives, July 17, 2001.