A new proposal from the Trump administration would take steps toward allowing importation of drugs from other countries.
The Department of Health and Human Services on Wednesday proposed two potential pathways to allow the importation of drugs from foreign markets, part of a broader effort bring down drug prices. One would allow importation from Canada through pilot projects, while the other would allow manufacturers to go around distributors and import their own products directly from other countries.
“Today’s announcement outlines the pathways the administration intends to explore to allow safe importation of certain prescription drugs to lower prices and reduce out-of-pocket costs for American patients,” HHS Secretary Alex Azar said in a statement. “This is the next important step in the administration’s work to end foreign freeloading and put American patients first.”
Under the first pathway, HHS and the Food and Drug Administration would use authority provided under current federal law to authorize pilot projects by states, wholesalers and pharmacists outlining ways to import drugs from Canada that are versions of FDA-approved products manufactured in ways consistent with U.S. regulatory standards.
However, there’s a catch. Because it would be based on current federal law, it would exclude products that are controlled substances, biologics, infused and intravenously injected drugs, drugs inhaled during surgery and any drug with a Risk Evaluation and Mitigation Strategy, along with certain parenteral drugs. Moreover, drugs would be eligible only if they contain active pharmaceutical ingredients made at the same manufacturing plants used to produce APIs for the products sold in the U.S.
The second pathway would allow manufacturers of FDA-approved drugs to import versions they sell in foreign countries, using a new national drug code that would potentially allow them to offer lower prices than those required by their current contracts with distributors, provided they could demonstrate to the FDA that the foreign versions were the same as the U.S. versions. Drugs covered under this pathway could include insulin and medicines for diseases like rheumatoid arthritis, cardiovascular disorders and cancers.
“The Administration has reason to believe that manufacturers might use this pathway as an opportunity to offer Americans lower cost versions of their own drugs,” an accompanying action plan put out by the FDA and HHS read. “In recent years, multiple manufacturers have stated (either publicly or in statements to the Administration) that they wanted to offer lower cost versions but could not readily do so because they were locked into contracts with other parties in the supply chain.”
While welcoming the plan, Senate health committee Chairman Lamar Alexander, R-Tennessee, expressed reservations. “The key for me is whether this plan preserves the Food and Drug Administration’s gold standard for safety and effectiveness,” he said in a statement. “Millions of Americans every day buy prescription drugs relying on the FDA’s guarantee of quality.”
However, Stephen Ubl, president of trade group the Pharmaceutical Research and Manufacturers of America, called the proposal “dangerous.”
“There is no way to guarantee the safety of drugs that come into the country from outside the United States’ gold-standard supply chain,” Ubl wrote in an emailed statement. “Drugs coming through Canada could have originated from anywhere in the world and may not have undergone stringent review by the FDA.”
Ubl added that law enforcement officials have said drug importation plans could worsen the opioid crisis, while Canadian officials have called such policies unworkable and run the risk of creating drug shortages in Canada.
The Healthcare Distribution Alliance, which represents drug distributors, also criticized the proposal.
“Pharmaceutical distributors support efforts to address the high cost of prescription drugs,” a statement by the HDA read. “But we firmly believe the administration should focus on policies that maintain the same high standards of safety that Americans have come to rely on. Importation runs directly counter to the efforts of many regulators, the pharmaceutical industry and congressional intent — and is simply not worth the risk.”
Current FDA regulations prohibit importation of unapproved drugs, which includes foreign-made versions of drugs that are approved in the U.S. and “have not been manufactured in accordance with and pursuant to an FDA approval.”
The administration has long accused other countries of “freeloading” off of American biopharmaceutical innovation by forcing Americans to pay more for drugs than people in other countries. However, experts have said this is misleading because every country makes its own decisions around pricing and reimbursement. Indeed, Medicare’s statutory inability to negotiate drug prices – as agencies of universal healthcare systems abroad do – is a consequence of domestic policy, not the policies of foreign countries.
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