Stressing the historicity of the moment, U.S. Health and Human Services Secretary Alex Azar announced that the FDA and HHS are taking the next step to flesh out two pathways to allow the importation of prescription drugs. That step includes the release of a proposed rule and a draft guidance.

Both paths were outlined in July when Azar unveiled the Safe Importation Action Plan as part of the Trump administration’s promise to lower drug prices. Being constructed through the federal rulemaking process, the first path calls on states to work with wholesalers and pharmacies to submit proposals for importing certain lower-priced drugs from Canada.

“This is really historic what we’re doing,” Azar said on a media call that was embargoed until shortly before the markets opened today. “No president in history has ever had an FDA open to importation from Canada.”

However, the path will not be a high-speed highway to lower drug prices, given the speed bumps Congress erected 20 years ago when it gave HHS limited authority, under Section 804 of the Federal Food, Drug and Cosmetics Act, to allow drugs approved in Canada to enter the U.S. market.

Passed under the Clinton administration, Section 804 requires the HHS secretary to certify that drugs imported from Canada would pose no additional risk to public health and safety and that they would result in a significant reduction in cost. Until now, all HHS secretaries have refused to issue that certification.

The section also expressly prohibits the importation of biologics, controlled substances, infused drugs, intravenously injected drugs, drugs inhaled during surgery and certain parenteral drugs. In addition, HHS is shutting out drugs with a risk evaluation and mitigation strategy and those injected into the eye or spine.

In other words, the new path will basically be open to small molecule oral drugs that can be picked up at a pharmacy, Azar said.

Despite the statutory limitations, Azar described the proposed rule the FDA is issuing as “a historic first step … effectuating a pathway.” As the states demonstrate the safety of the imports from Canada, Azar said Congress could revisit the restrictions to allow for the importation of more complex drugs.

Meanwhile, the FDA is issuing draft guidance to pave the second path, which would allow manufacturers to circumvent their rebate agreements with pharmacy benefit managers (PBMs) and others in the U.S. supply chain by giving them a new national drug code so they can import versions of their FDA-approved drugs that they sell in other countries – so long as they can demonstrate to the FDA that the foreign version is the same as the U.S. drug.

This path would be open to all drugs, regardless of where they’re marketed, Azar said. The key is that the manufacturer would be the one to initiate the importation, whereas a state would be the driver on the first path.

The second avenue will either call the biopharma industry’s bluff or give it a chance to prove that it means what it says about wanting to lower drug prices. Drug companies have repeatedly claimed that the PBM rebate agreements have kept them from lowering their list prices, Azar said, and several manufacturers have claimed that they wouldn’t have to pay the rebates for drugs with a different national code.

“We’ll have to see if they live up to it,” Azar said of the path.

HHS and the FDA plan to move forward on both paths as quickly as possible, Azar said. He declined to project the savings importation could provide, as that will depend on the state proposals for the first path and the number of manufacturers taking advantage of the second avenue.

Azar also sidestepped a question about Canada’s reaction to the plan.

When the Safe Import Action Plan was first announced, Canadians weren’t happy, as they feared a U.S. run on the Canadian drug supply could lead to severe drug shortages. Even without sharing its drugs with its neighbor, Canada routinely experiences a shortage of 700 to 1,000 drugs at any given time, according to some experts.

Several Canadian patient advocacy, pharmacy and professional groups urged Health Canada to intervene with the U.S. to ensure the availability of prescription drugs for Canadians. They also asked the agency to look at existing laws and regulations that would keep Canadian drugs from leaving the country and to consider additional measures that could be taken to protect the country's drug supply.

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