Trump administration's plan sounds good but faces severe operational obstacles
It’s taken nine months, but the Trump administration has delivered on one of its politically popular proposals: drug importation from Canada. HHS issued a Final Rule (soon to be published in the Federal Register), “Importation of Prescription Drugs,” [Docket No. FDA-2019-N-5711], scheduled to go into effect after 60 days. The original proposed rule appeared last December.
In the interim, HHS and FDA received some 1,200 comments on the rule, but appears to be much as originally proposed. For now, states and territories (and later, wholesalers or individual pharmacists) can sponsor a Section 804 Importation Program (SIP), managed by the sponsor and overseen by FDA. The Sponsor will select an Importer who will deal with a Foreign Seller (in Canada). The Foreign Seller is to be registered both with Health Canada and with FDA; the Importer is to be a US entity. Those three parties will work together to ensure that only drugs licensed to be sold in Canada and that meet FDA requirements, and are tested for quality by either the manufacturer or the Importer, will be allowed into the US and prescribed to patients.
President Trump touted the program as part of an “America First Health Plan” in a speech in North Carolina on Sept. 25. “This will be a game changer for American seniors. And by allowing you to do this through Canada, we’re doing it very, very quickly. So it goes very fast. And the new rule goes into effect as of today,” he said, but as is often the case with his pronouncements, that isn’t quite true, if only for the 60-day provision.
According to Kaiser Health News, Florida is primed to go forward, and has a request for contractors already in place. Other states—Colorado, Maine, New Hampshire, New Mexico and Vermont—also intend to start programs.
The HHS Final Rule addresses a key obstacle of previous federal efforts to permit importation—that the Secretary of Health needs to certify the safety and cost savings of such a program—by essentially asserting both those points. It’s left to states, the Sponsors, to collect the necessary documentation; as to cost savings, the rule simply sidesteps the matter, saying “We are unable to estimate the cost savings from this final rule because we lack information about the likely size and scope of SIPs, the specific eligible prescription drugs that may be imported, the degree to which these imported drugs will be less expensive than nonimported drugs available in the United States, and which eligible prescription drugs are produced by U.S.-based drug manufacturers.”
For now, drug importation is a two-year test, to be evaluated after that for its savings. Besides the heavy documentation, testing and relabeling rules, the plan also faces a lack of interest from Health Canada (Canada’s population is one-tenth that of the US, and they are already worried about some drug shortages), and the potential litigation from the US pharma industry.