PharmacyChecker Blog

Helping Americans Get The Truth About Prescription Drug Savings
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Americans have been personally importing medications for decades. In most cases, the reason is that the same drugs sold in the U.S. are much cheaper elsewhere. According to a recent JAMA article, about 2.3 million Americans import drugs to save money each year. The Kaiser Family Foundation pegged the number at about 20 million, total. This, despite the fact that, under most circumstances, such imports are prohibited. As explained below, under an executive order and a request for proposals by the U.S. Department of Health and Human Services and Food and Drug Administration (HHS/FDA), the door has been opened to formally allow personal drug importation, but the proposed parameters of the RFP ignore greater opportunities, savings and the law itself.

First, wholesale importation of lower cost drugs from Canada is now lawful. That is pursuant to Section 804 of the Food, Drug and Cosmetic Act. Such wholesale importations had been prohibited because the HHS Secretary had yet to certify that the importation would cause no additional public health risk and result in substantial savings for Americans. That certification, as required in Part L of Section 804, was provided by Sectary Azar last week.

Unlike wholesale importation, Section 804 does not legalize personal importation from Canada or other countries, but it does permit it through enforcement discretion, regulation or waiver. Currently, personal drug imports are often permitted through enforcement discretion. A recent executive order on drug importation asked the Secretary to expressly permit personal importation to help Americans afford prescription drugs. I was skeptical that HHS would actually move forward and act on the executive order. It has moved forward but appears to be ignoring one part of the law that would most help people immediately.

Last week, HHS/FDA published a request for proposals on granting waivers that can expressly permit individuals to import lower cost prescription drugs for personal use. This authority is granted by Section 804(J2) of the Food, Drug and Cosmetic Act. The RFP states:

“Under the programs described herein, the Secretary may grant waivers to individuals who seek to import prescription drugs for personal use. Under these programs, the individual will obtain the imported prescription drugs from an authorized State licensed pharmacy through an authorized IWIP [Individual Waiver Importation Plans].”

I’m excited about this new opportunity for prescription drugs savings, but the proposal does not reflect the reality of how personal drug importation helps Americans save the most money. They do so by buying directly from pharmacies in other countries. There are no middlemen. Purchases are made in person, whether in Canada, Mexico or another country; over the Internet from online pharmacies; “storefronts,” essentially offices where people go for help ordering medication internationally, or through international pharmacy benefit programs offered by self-insured entities, such as unions or municipalities.

The RFP does not authorize the aforementioned activities. It states:

“This pathway would not authorize individuals in the United States to purchase prescription drugs through the Internet, directly from a foreign pharmacy, or from any other foreign seller.”

The RFP requires that the imported drugs be dispensed in a U.S. pharmacy. The parameters impose a sort of hybrid of wholesale and personal importation. Personal importation is directly importing from a pharmacy in Canada. Wholesale importation is when a U.S. company, such as a wholesale pharmacy or retail pharmacy imports commercial quantities for re-sale. The RFP states:

“For the Secretary to issue a waiver for an IWIP drug, the plan sponsor, which may be any interested person (including a distributor, wholesaler, or pharmacy) would submit to the Secretary an application identifying the specific FDA-approved prescription drugs that individuals would be able to import.”

Per those parameters, the RFP creates an unnecessary intermediary, and reduced savings. Clearly, a commercial wholesaler that participates will expect a profit. Importing the drugs and distributing them to a retail pharmacy cost money. The retail pharmacy will also take a cut of the sale. From a savings viewpoint, this is not optimal, and the law doesn’t require it either.

Part J envisions and calls for Americans buying their own medications directly from pharmacies in other countries, singling out for special treatment Canadian pharmacies. Additionally, the essence of that section pertains to enforcement discretion to permit personal imports that do not represent an “unreasonable risk” to the public health. Per J(1), this enforcement discretion should be permitted for FDA-approved drugs and foreign versions of FDA-approved drugs. J(2) allows the Secretary to grant waivers and create specific regulations, as is the case with this RFP. But that allowance does not negate J(1)’s direction, which the Secretary is ignoring.

Another example of how HHS is ignoring the law is with J(3). J(3) instructs the Secretary to allow direct personal imports from Canadian pharmacies. The law is clear and yet this is not being done.

Finally, this RFP goes beyond the requirements of the law in stating that waivers will be granted to allow personal imports that “will pose no additional risk to the public’s health and safety and would result in a significant reduction in the cost of the covered products to the American consumer.” The standard in J(1) is that the import should not pose an “unreasonable risk.” FDA regulated personal drug importation is a great step in the right direction. However, those Americans who choose to and— more critically – need to import their medications directly should do so from pharmacies in other countries (as they do already despite it being prohibited). HHS/FDA has an opportunity and responsibility to provide the American people with consumer guidance to help them do so safely.

It’s worth noting that the RFP doesn’t rule out what I’ll call real personal drug importation. It specifically states it does not authorize Internet purchases. It’s conceivable that a well-articulated proposal to allow waivers to patients who want to get their medications in Canada could be successful, either through this RFP process or other processes, such as a Citizen Petition.

For what it’s worth, this new RFP pushes the envelope in the right direction, but greater pushing is needed so that Americans more quickly get the prescription drug price relief they need. That includes buying the medication and receiving it from a Canadian pharmacy via the Internet.