Today, the Department of Health and Human Services (HHS) announced two "pathways" for drug importation. This plan is the latest step in the Administration's push to lower prescription drug prices and one the President has strongly supported. However, implementation of this plan has a long time horizon and a very uncertain future given the need for state buy-in, mixed support in Congress and staunch opposition from manufacturers.
Under the HHS plan, there would be two importation methods. Pathway 1 relies on existing authority under the Food, Drug and Cosmetic Act (FDCA). HHS would issue a Notice of Proposed Rulemaking (NPRM) to "authorize demonstration projects to allow importation of drugs from Canada. The NPRM would include conditions to ensure the importation poses no additional risk to the public's health and safety and that it will achieve significant cost savings to the American consumer." The demonstration projects can come from "states, wholesalers, or pharmacists" who would submit plans to HHS for approval. Among other items, the uncertain regulatory process and inevitable litigation involving a final rule, makes the timeline for implementation difficult to predict.
In connection with Pathway 2, "[m]anufacturers of FDA-approved drug products would be able to import versions of these FDA-approved drugs that they sell in foreign countries into the U.S. To use this pathway, the manufacturer or person authorized by the manufacturer would need to establish with FDA that the foreign version is the same as the U.S. version." There is less clarity of how this Pathway would actually be implemented. For example, the notice states "Administration has reason to believe that manufacturers might use this pathway as an opportunity to offer Americans lower cost versions of their own drugs." Further, "HHS may seek comments on whether manufacturers would seek to lower costs under this pathway, what additional elements might be important to include, and whether this pathway could more effectively be implemented by using authority under section 804 [of the FDCA]."
Notably, some states have already explored importation, so a federal move is not a completely new idea. There are existing importation laws in Florida, Colorado and Vermont. Indeed, there have been reports that the President directed HHS Secretary Azar to implement the Florida plan which, like today's announcement, establishes Canadian and international import programs. There is an unanswered question about how these state laws and the newly announced federal plan work in concert or if there is conflict. Additionally, there could be pushback from Congress where importation has few supporters.
It is clear that drug pricing remains a top priority for policy makers so this announcement and the ongoing legislative work in Congress bears watching. Stay tuned.
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