Trump Administration Issues Final Drug Importation Rule
October 2, 2020
On September 24, the Trump Administration released a final rule to allow the importation of prescription drugs from Canada. The final rule follows a notice of proposed rule making last December, in which HHS outlined two potential pathways for importation. The first called the Section 804 Importation Program, is established under the final rule, while the second, called the MMA (multi-market approved) Products Program would be implemented through guidance.
Although the rule is slated to become effective 60 days after its publication in the Federal Register – expected October 1, it is likely to face legal challenges from drug manufacturers and push back from Canada, which could delay its implementation. Drug manufacturers as well as Canada have expressed opposition.
To date, six states – Vermont, Florida, Colorado, Maine, New Mexico, and New Hampshire – have passed laws seeking permission from HHS to establish drug importation programs of their own. Dozens of other states, including Utah, have considered but not yet enacted such laws.
Under the final rule, states and Indian tribes, and in “certain future circumstances” pharmacists and wholesalers, may submit importation program proposals to the FDA for review and authorization. The final rule also requires that states and other qualified sponsors 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 prescription drug costs to the American consumer. However, HHS stated in the rule that it is unable to provide estimates on savings because which drugs will be imported is unknown and they can’t predict the scope and scale of importation plans.
The HHS-issued guidance outlines how manufacturers of FDA-approved drugs would be able to import lower priced versions of FDA-approved drugs they sell in foreign countries.
BioUtah, and its national partner PhRMA, continue to have serious concerns about drug importation, which would make it easier for unsafe or counterfeit medications to enter the market.
Going forward, the final rule is likely to face legal challenges as well as practical obstacles, particularly given Canada’s pushback and the detailed requirements that state plans must meet.
Congress has allowed drug importation since 2003 under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, but only if the HHS Secretary certified it is safe. No secretary has done so until, according to press reports, Secretary Alex Azar recently sent a letter to Congress making that certification. Such certification was noted as forthcoming in the rule.
The importation rule is part of President’s Trump larger policy agenda to lower drug prices, which includes previous rule making and an executive order to impose “most-favored-nation” pricing on Medicare Part B and D drugs.