FDA Finalizes Rule on Prescription Drug Importation from Canada

The FDA recently finalized a rule that would allow prescription drug importation from Canada in FDA-authorized programs.

The final rule, part of the White House’s Safe Importation Action Plan, fulfills the aspect of the previous executive order, which will allow states to import certain prescription drugs from Canada.

FDA noted that the rule implements a provision of federal law that allows FDA-authorized programs to import specific prescription drugs from Canada under conditions that ensure the importation does not put the health or safety of individuals at risk.

Most importantly, the rule will achieve a reduction in the cost of covered products to American consumers.

“Today’s action is an important part of FDA’s priorities to promote choice and competition. The Safe Importation Action Plan aims to clearly describe procedures to import drugs that would lower prices and improve access while also maintaining the high quality and safety Americans expect and deserve,” said FDA Commissioner Stephen M. Hahn, MD. 

Final guidance produced by FDA, HHS, and other federal agencies also highlighted procedures that drug manufacturers can follow to facilitate the importation of prescription drugs, including biological products.

FDA noted in the guidance that the products must be FDA-approved, manufactured abroad, authorized for sale in any foreign country, and originally intended for sale in that specific country.

By following the procedures described in this guidance, manufacturers could obtain a National Drug Code (NDC) for certain FDA-approved prescription drugs, the agency said in the final guidance. 

“The use of an additional NDC for these products may allow greater flexibility for drug companies to offer these products at a lower price than what their current distribution contracts require,” FDA said. 

“Prescription drugs, including biological products, imported under the pathway described in the final guidance could be available to patients in a variety of settings, including hospitals, health care providers’ offices or licensed pharmacies, and would include the FDA-approved labeling.”

Under the final rule, states, Indian tribes, pharmacists, and wholesalers are able to submit importation program proposals to FDA for review and authorization.

A drug importation program can be managed by the respective sponsor and any co-sponsors, which can be a state, Indian tribe, pharmacist, or wholesaler.

But the program must be authorized by FDA to facilitate the importation of certain prescription drugs that are improved in Canada, as well as meet the conditions of an FDA-approved drug application, FDA said. 

Prescription drugs that are already authorized for use must be re-labeled with the required US labeling and undergo testing for authenticity, degradation, specifications, and standards.

Primarily, the programs will have to prove significant cost reductions of the covered products to consumers.

“If such programs are authorized and implemented, allowing Importers to leverage drug price differences between the United States and Canada for the eligible prescription drugs identified in the SIP, these programs will result in cost savings for the American consumer,” FDA stated.

Throughout the pandemic, FDA has implemented guidance and final rules to take a most favored nation status and decrease the cost of drugs in the US.

President Trump’s latest most favored nation executive order was an attempt to lower prescription drug costs in the US by relying on international price competition.

In general, the most favored nation approach establishes a quality trading opportunity among states by making originally bilateral agreements multilateral. 

For drug pricing, this means leveraging international reference prices to lower drug costs.

Under the executive order, the drugs covered under the most favored nation pricing scheme, which includes both Medicare Part B and Medicare Part D, will be expanded.

Additionally, the order directs HHS Secretary Alex Azar to immediately take appropriate action to test a payment model in which Medicare would pay no more than the most-favored-nation price. 
“My Most Favored Nation order will ensure that our Country gets the same low price Big Pharma gives to other countries. The days of global freeriding at America’s expense are over,” President Trump said in a statement on Twitter.