The FDA took concrete steps Wednesday in mapping out import routes for prescription drugs by issuing a notice of proposed rulemaking and a draft guidance.

If finalized, the proposed rule, for the first time, would implement a 20-year-old provision of the Federal Food, Drug and Cosmetics Act that gives the Health and Human Services (HHS) secretary the authority to authorize the import of certain small-molecule drugs from Canada. However, the proposal is getting pushback from Canada.

“Our government will protect our supply of and access to medication that Canadians rely on,” Alexander Cohen, press secretary for Canada’s Office of the Minister of Health, told BioWorld. “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.”

Addressing Canada’s concerns at a news conference he held Wednesday with Florida Gov. Ron DeSantis, HHS Secretary Alex Azar said, “Obviously, the Canadians are going to be looking out for Canadians just as … we’re here to put American patients first. We hope they’ll work with us.”

While he said he understood that Canada is concerned about its own system, Azar suggested that through its lower drug prices, Canada is “free-riding off of American investment and innovation,” adding that “the president and I are committed to ending foreign free-riding” by bringing lower drug prices to the U.S.

“If the drug companies are willing to give discounts to other countries that are similarly positioned economically to the United States,” then they should be giving those prices to the U.S., which is the largest drug market in the world, Azar said.

Proposed import routes

The FDA’s proposed rule would put states in the driver’s seat by having them submit Section 804 Importation Programs (SIP) for the agency to review. Thus, savings would be realized on a state-by-state basis, depending on the breadth of each state’s SIP.

In developing the proposal, HHS and the FDA worked closely with Florida and other states to construct what HHS Secretary Alex Azar described as a “business-to-business pipeline” that would connect Canada’s safe system for prescription drugs with that of the FDA, without opening the door to counterfeits and subpar or contaminated drugs.

The plan is an about-face for Azar who, just last year, dismissed importation as a gimmick, rather than a solution, to U.S. drug prices. The secretary explained how his position on drug importation has evolved since the president and several governors urged him to take a fresh look at the current global drug supply chain.

Azar said he recognized that the vertical and horizontal integration of the distribution system, along with globalization, has created an opportunity for the safe importation of drugs that didn’t exist when he was at HHS in 2003. He isn’t the only one with a change of mind. He noted that even career officials at the FDA are now open to importation, given the improvements that have been made in the supply chain.

In addition to the proposed rule to establish the Canadian import program, the FDA issued a draft guidance to allow much broader importation of lower-priced drugs and biologics that are a manufacturer’s foreign versions of its FDA-approved products. The catch is that the importation would be at the manufacturer’s request.

If nothing else, the guidance would test the biopharma industry’s oft-expressed desire to lower drug prices. It also would show whether claims that drug companies can’t lower their U.S. list prices because of rebate agreements with pharmacy benefit managers (PBM) are an excuse or a real factor in high list prices.

By giving manufacturers a new national drug code so they can import the versions they market in other countries at a lower list price, the guidance would create a way for companies to sidestep the PBM agreements, Azar said.

Industry reaction

While industry has been relatively silent about the guidance allowing manufacturers to import their own drugs, it’s hitting hard at the FDA’s proposal to implement Section 804.

“The idea that this plan will result in savings for patients at the pharmacy counter is a talking point that’s been debunked by nonpartisan budget experts and past FDA commissioners who served under both Republican and Democratic administrations,” said Jim Greenwood, president and CEO of the Biotechnology Innovation Organization.

Calling it a dangerous scheme that would risk patient safety, Greenwood said the proposal “is the latest empty gesture from our elected lawmakers who want us to believe they’re serious about lowering patients’ prescription drug costs. It’s time Congress and the administration delivered a holistic solution that protects the health and well-being of patients and ensures medicines are affordable.”

Pharmaceutical Research and Manufacturers of America President and CEO Stephen Ubl had a similar reaction, as he warned the plan “could endanger American lives, could worsen the opioid crisis and has been called unworkable by Canadian officials.”

Azar addressed industry’s talking points against Canadian imports, pointing out that Section 804 expressly forbids the importation of controlled substances such as opioids, as well as biologics, infused drugs, intravenously injected drugs, drugs inhaled during surgery and certain parenteral drugs. In addition, the FDA is shutting out drugs with a risk evaluation and mitigation strategy and those injected into the eye or spine.

As for concerns about risky drugs, Azar noted that Health Canada has a stringent approval system that safeguards Canadian patients. Only Health Canada-approved and labeled drugs could be imported under the proposed scheme.

Canadian fears

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

The action plan announcement spurred several Canadian patient advocacy, pharmacy and professional groups to urge 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.

Both Azar and DeSantis stressed that the importation proposals were the first steps in a long process, and the Florida governor added that it was the beginning of what could be a rethinking of several drug policies.

To the naysayers who described the importation proposals as a small incremental step, DeSantis replied, “I’d much rather be here, moving forward, than standing on the sidelines chirping about why doesn’t someone do something about [drug prices].”

The proposed rule and the draft guidance are scheduled for publication in Monday’s issue of the Federal Register. That publication will kick off a 75-day comment period for the rule and a 60-day comment period for the guidance.

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