Drug Importation Plans: Lots of Exclusions, Unclear Timeline

The US Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) this morning rolled out its plans to allow states and drug companies to import certain prescription medicines from Canada and elsewhere to lower costs, but the plan for states excludes the most costly medicines and it’s unknown when either will take effect.

In a press call on Tuesday evening, HHS Secretary Alex Azar discussed the two plans, including one that would allow states to import certain small molecule drugs, although they would not be allowed to import pricy biologics, including insulin products, or controlled substances, intravenous drugs, drugs the operate under Risk Evaluation and Mitigation Strategies (REMS) or drugs injected in the spine or eye.

Azar said states such as Florida, Maine, Colorado, Vermont and Michigan, as well as wholesalers or pharmacists may submit plans for demonstration projects to import medicines from Canada under a Notice of Proposed Rulemaking (NPRM) unveiled on Wednesday. States would be allowed to import these drugs for two years and then HHS would re-determine if importation can be used on a wider scale.

The NPRM also sought to temper expectations, noting: "We do not expect to be able to find that a SIP [state] Sponsor has consistently imported drugs in accordance with section 804 of the FD&C Act and this rule before it submits its first quarterly report to FDA." In its economic analysis, FDA also said "there is question as to whether this proposed rule could yield non-zero benefits."

Canada also has made clear that it cannot expand its prescription drug supplies to meet US demands, especially as Canada imports about 70% of its prescription drugs.

Alexander Cohen, press secretary to Canada's Office of the Minister of Health, told Focus via email: "Our government will protect our supply of and access to medication that Canadians rely on. We continue to be in communication with the White House and the U.S. Department of Health and Human Services and our message remains firm: we share the goal of ensuring people can get and afford the medication they need – but these measures will not have any significant impact on prices or access for Americans. We remain focused on ensuring Canadians have access to the medication they need."

But HHS insists that this is just the beginning of a potentially wider effort to import cheaper drugs.

“This is a first step, there could be a proof of concept with more complex drugs,” Azar added, noting that another pathway, as explained in new FDA draft guidance also released Wednesday, will allow biopharma companies to voluntarily import foreign versions of FDA-approved drugs. That plan does not have any restrictions on what can be imported if a manufacturer is willing, Azar said.

“If you would like to sell these products from other countries with lower list prices, we’ll give you a new national drug code,” he added.

Examples of drugs that might be imported via this pathway explained in the FDA draft guidance are branded drugs for which there are high rebates, Azar added. The guidance also explains how companies will need to relabel the imported drugs before they hit US shelves. FDA said it would recommend a distinguishing feature to differentiate products that are imported as part of this pathway.

Biopharma industry groups in Washington, D.C.  do not back the use of importation to lower costs, citing quality concerns. Both BIO and PhRMA offered comments Wednesday opposing the importation plans. And back in 2017, four former FDA commissioners called importation risky.

As far as when Americans may be able to see lower drug costs due to the finalized rulemaking and guidance, the timeline is unknown, but could be more than a year to allow for public comments on the plans and for HHS and FDA to digest the comments and propose any necessary changes. HHS and FDA also did not provide any savings estimates for the two pathways and neither did the NPRM. The pathways were first discussed in July.

Former Acting FDA Commissioner Brett Giroir also explained that the draft guidance does not address generic drugs, but FDA is soliciting comment on whether there might be interest in a similar approach with generic drugs.

NPRM

Draft Guidance

FDA economic analysis