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Will some states begin importing low-costing prescription drugs from Canada?

Category: Cost-sharing: What You Pay
Updated: May, 03 2023


Hopefully soon.

As noted by the [Food and Drug Administration (FDA)]: "On March 31, 2022, the FDA held a meeting with representatives from several states [Florida, Colorado, Vermont, Maine, and New Mexico], the National Academy for State Health Policy, and the U.S. Department of Health and Human Services to discuss the development of Section 804 Importation Program proposals."  And on May 25, 2022, the FDA, issued guidance (https://www.fda.gov/media/158659/download) "intended to help small entities better understand the final rule, “Importation of Prescription Drugs,” published October 1, 2020 (85 FR 62094)."

https://www.fda.gov/about-fda/reports/importation-drugs-originally-intended-foreign-markets

However, BipPharma International noted that "the Canadian government stated early on that it opposed the [importation] program and is unlikely to provide the required vetting of sellers at its end. Such drug import programs have disappeared in the past due to similar hurdles and requirements , and it remains to be seen if even those committed states have a different experience in the drug import area."

As background . . .

On July 9, 2021, Executive Order 14036 - Promoting Competition in the American Economy was signed.  In an effort to promote competition, the order states,
"To reduce the cost of covered products [prescription drugs] to the American consumer without imposing additional risk to public health and safety, the Commissioner of Food and Drugs shall work with States and Indian Tribes that propose to develop section 804 Importation Programs in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173, 117 Stat. 2066), and the FDA's implementing regulations."
This executive order builds on the efforts already in place.
On September 24, 2020, the U.S. Department of Health and Human Services (HHS) passed a final rule that, when effective, would allow states (such as Florida, Colorado, Maine, Vermont, New Hampshire and New Mexico) to import some medications from Canada at lower costs (-- after the safety of the medications was assured and state importation programs received approval from the federal government).

In the summary of the final regulation for importing drugs the FDA/HHS stated:
The Secretary of Health and Human Services (Secretary) is issuing a final rule to implement a provision of the Federal Food, Drug, and Cosmetic Act (FD&C Act) to allow importation of certain prescription drugs from Canada.  Under this final rule, States and Indian Tribes, and in certain future circumstances pharmacists and wholesalers, may submit importation program proposals to the Food and Drug Administration (FDA, the Agency, or we) for review and authorization.  An importation program may be cosponsored by a State, Indian Tribe, pharmacist, or wholesaler.  The final rule contains all requirements necessary for a sponsor to demonstrate that their importation program will pose no additional risk to the public’s health and safety.  In addition, the final rule requires that the sponsor explain how they will ensure their program will result in a significant reduction in the cost of covered [prescription drug] products to the American consumer. [emphasis added]
(https://www.hhs.gov/sites/default/files/importation-final-rule.pdf) (scheduled for publication on 10/01/2020 - https://www.federalregister.gov/documents/2020/10/01/2020-21522/importation-of-prescription-drugs)

In an article reviewing the final rule, AARP noted that:
"The final [FDA drug importation] regulation will allow specific drugs to be imported, as long as they meet federal standards for safety and saving money. Though the rule goes into effect in 60 days, HHS officials could not say when actual importation plans would take effect.  The [drug importation] plan has faced strong objections from the Canadian government and drugmakers, which have said they will go to court to prevent the regulation from taking effect." [emphasis added]
(https://www.aarp.org/politics-society/advocacy/info-2020/canada-drug-importation-ruling.html)

Currently, any prescription medications purchased outside of the United States are not covered by a Medicare Part D prescription drug plan and do not count toward meeting your drug plan's spending threshold.


Additional information

"FDA Issues Guidance on Importing Drugs from Canada", Wilson Sonsini, June 22, 2022
https://www.wsgr.com/en/insights/fda-issues-guidance-on-importing-drugs-from-canada.html

"FDA Moves Forward with State Drug Import Plans", Biopharm International, May 31, 2022, Jill Wechsler, https://www.biopharminternational.com/view/fda-moves-forward-with-state-drug-import-plans

FDA, "Importation of Prescription Drugs Final Rule, Questions and Answers, Guidance for Industry (Small Entity Compliance Guide)."  https://www.fda.gov/media/158659/download

Proposed FDA regulation at: https://www.federalregister.gov/documents/2019/12/ 23/2019-27474/importation-of-prescription-drugs

Trump Approves Final Plan to Import Drugs From Canada ‘for a Fraction of the Price’ (09/25/2020)
https://khn.org/news/trump-approves-final-plan-to-import-drugs-from-canada-for-a-fraction-of-the-price/
"10 FAQs on Prescription Drug Importation" (03/19/2020)
https://www.kff.org/medicare/issue-brief/10-faqs-on-prescription-drug-importation/

"Canadian drug distributors say no to Trump import plan" (12/20/2019)
https://www.reuters.com/article/us-usa-healthcare-canada/canadian-drug-distributors-say -no-to-trump-import-plan-idUSKBN1YO24O


Additional reference:
https://www.fda.gov/media/158659/download
https://www.reuters.com/article/us-usa-healthcare-canada/canadian-drug-distributors-say-no-to-trump-import-plan-idUSKBN1YO24O
https://www.fda.gov/about-fda/reports/importation-drugs-originally-intended-foreign-markets
https://www.aarp.org/politics-society/advocacy/info-2020/canada-drug-importation-ruling.html
https://www.biopharminternational.com/view/fda-moves-forward-with-state-drug-import-plans
https://www.federalregister.gov/documents/2020/10/01/2020-21522/importation-of-prescription-drugs
https://www.hhs.gov/sites/default/files/importation-final-rule.pdf






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