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Helping Americans Get The Truth About Prescription Drug Savings
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Is it legal to order medications online? Yes. If you live in the U.S., you can legally order medications online for mail order, such as from Walgreens or CVS. Is it legal to order medications from an online pharmacy located in a foreign country – to personally import it? Technically, no; but people who import small quantities of prescription medication for their own use, according to the FDA, are not prosecuted for doing so. There are a lot of nuances and quirky details when it comes to laws and regulations that apply to online pharmacies. Some laws are there to protect your health and safety; others seem more bent on protecting the profits of big drug companies – and there’s a lot in between. It’s complicated.

So this week, in our continuing quest to get the truth out and for our elected leaders in Congress to take bold action to protect online access to safe and affordable medication, we’re publishing the next section of our report called Online Pharmacies, Personal Drug Importation, and Public Health

Laws Governing Online Pharmacies

Federal laws and drug importation

The only federal law dedicated to regulating online pharmacies is the Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which prohibits remote medical consultations (one where the patient is not examined physically by a licensed practitioner) over the Internet toward the prescribing of a controlled prescription drug, except where the provider obtains a special registration from the DEA for such purpose.  The law was necessary to deter online pharmacies and healthcare practitioners from prescribing controlled drugs without establishing a valid doctor-patient relationship and to enable successful prosecutions of those who do.

There is no corresponding online pharmacy law for non-controlled prescription medications. However, under the Food, Drug and Cosmetic Act (FDCA) certain medications can only be sold pursuant to a valid prescription. States regulate pharmacy and medical practices, resulting in different and sometimes conflicting legal definitions of a valid prescription. In some states such as Hawaii and Utah, a prescription can be valid when based on a remote medication consultation. In contrast, in states such as Indiana “…issuing a prescription, based solely on an on-line questionnaire or consultation is prohibited.”

Under federal law, the practice of buying prescription medication from online pharmacies is legal so long as orders are filled with FDA-approved medications pursuant to a valid prescription as defined under state law and dispensed from a licensed U.S. pharmacy. The challenges faced by regulators from foreign online pharmacies that do require a valid prescription and do not offer controlled drugs are related to drug importation and distribution, but not online pharmacy laws.

Drug importation is not illegal: It is legal but generally not for individuals buying medication for themselves. The political debate about drug importation has created a false dichotomy: those who favor legalizing drug importation and those who oppose it. Most active pharmaceutical ingredients found in local U.S. pharmacy prescription drugs were manufactured overseas. According to FDA Commissioner Margaret Hamburg, 80% of the active pharmaceutical ingredients used in prescription drugs sold in U.S. pharmacies are imported, as are 40% of the finished pharmaceutical products.

There are no federal laws specifically banning personal drug importation, either through border crossings or by mail (ordered through online pharmacies).[1] While drug importation is legal, federal laws regulate who can do the importing and which medications are acceptable. Under the FDCA, medications that are made in the United States and exported can only be reimported by the manufacturer.Foreign-made drugs that are FDA-approved can be imported by wholesalers, retail pharmacies, hospitals, packagers, and, technically, individuals. “FDA-approved” is a designation that is product specific, based on registered manufacturers, manufacturing plants, packagers, pharmaceutical ingredients, formulations, labeling, composition, appearance and color. Essentially, foreign FDA-approved drugs are those manufactured, packaged and labelled for eventual sale in U.S. pharmacies. Those same drugs are packaged and labelled for different country markets as well.

Prescription drugs manufactured, packaged and labeled for eventual sale in Canadian or other foreign pharmacies generally will not meet all FDA regulations and are, therefore, considered unapproved drugs by the FDA. When FDA reports that it has seized unapproved prescription drug imports for personal use at an international mail facility, those products can certainly be, and often are, legally manufactured, safe and effective medications. In other words, the unapproved drug is a legitimate foreign version of a drug that is approved by the FDA, and often one made by the same manufacturer.

Foreign prescription drugs made in FDA-registered plants where the actual capsule, tablet, inhaler, patch, or other formulation is identical to those sold in U.S. pharmacies are usually considered misbranded drugs because the drugs are labelled and packaged differently. Even these identical products are subject to seizure by FDA when imported by Americans for personal use.

For example, the drug Lipitor was, for years, manufactured by its patent holder, Pfizer, in an FDA-registered facility in Ireland. The same Lipitor was exported for sale to the U.S. and Canadian markets, ending up in retail pharmacies in both countries. The Lipitor exported to the U.S. was packaged to meet FDA labelling guidelines, while the Lipitor exported to Canada was packaged to conform to the requirements of Health Canada’s Therapeutic Products Division, Canada’s FDA counterpart. Those Lipitor pills sold in Canadian pharmacies would be considered misbranded if brought into the U.S. and considered illegal if imported by Americans.

The FDA provides a contradictory position on why personal drug importation is “almost always unlawful.” On the one hand, the illegality is due to FDA’s lack of jurisdiction over medication sold in other countries; on the other hand it’s due to the potential unsafety of the medication. The FDA’s website states:

In most circumstances, it is illegal for individuals to import drugs into the United States for personal use. This is because drugs from other countries that are available for purchase by individuals often have not been approved by FDA for use and sale in the United States. For example, if a drug is approved by Health Canada (FDA’s counterpart in Canada) but has not been approved by FDA, it is an unapproved drug in the United States and, therefore, illegal to import. FDA cannot ensure the safety and effectiveness of drugs that it has not approved.

According to the FDA’s language, the illegality (under most circumstances) of personal drug importation appears to be due to the fact that the agency cannot ensure the imported drug’s safety and efficacy, not that the drug is unsafe and ineffective. The reasons given by the FDA have more to do with the unknowns of manufacturing, labeling and prescription requirement standards. However, many foreign pharmacies sell prescription medications ordered online that are manufactured, stored and distributed properly and only dispensed pursuant to a valid prescription. GAO’s earlier research found that 100% of personal prescription drug imports ordered online from Canada met all aforementioned key safety considerations.

If FDA’s position is based on what it can and cannot “ensure” about the safety and efficacy of a drug, it assumes or implies that the agency can ensure the safety for pharmaceuticals sold legally in the U.S. Yet GAO research shows that the FDA may have never inspected thousands of manufacturing plants that legally export pharmaceuticals to the U.S. A Government Accountability Office report from 2010, based on FDA data, found “of the 3,765 foreign establishments in FDA’s inventory for fiscal year 2009, there were 2,394 foreign establishments that may never have been inspected by FDA…This is an increase from the 2,133 foreign establishments that may never have been inspected in 2007.” Through user-fees paid by generic drug companies, FDASIA has increased FDA’s ability to inspect more foreign establishments, which can improve its ability to ensure — but not guarantee drug safety and efficacy – and keep track of those foreign establishments that export pharmaceuticals to the U.S.

Prescription drugs sold from licensed pharmacies in the most regulated and advanced markets are just as safe as those sold in U.S. pharmacies. Thus, medications sold in many foreign pharmacies are just as safe and effective as those sold in U.S. pharmacies whether or not they are “FDA-approved.”

The safety of personal drug importation from online pharmacies includes foreign-approved generic versions, not just brand name drugs. For example, in 2004, FDA reported making undercover purchases of prescription drugs from a pharmacy in Canada. One of the products purchased was called APO-Gabapentin, a generic version of Neurontin, which treats postherpetic neuralgia and epileptic seizures. The FDA stated in a press release:

Instead of Neurontin, FDA received unapproved drugs called APO-Gabapentin and Novo-Gabapentin. The unapproved drugs purchased through the defendants pose a public health threat because, as alleged in the complaint, FDA cannot assure the safety and efficacy of unapproved drugs.


The FDA’s claim is factually tenuous and misleading. FDA communicates that the drugs received were “unapproved” in the U.S. but doesn’t mention that they are generic versions of Neurontin approved for sale in Canada. The medications do not pose a public health threat because “FDA cannot assure the safety and efficacy of unapproved drugs.” The medications were not found to be counterfeit, stored improperly, incorrectly labelled, or substandard. Five months later APO-Gabapentin was approved for sale in U.S. pharmacies.

Since many enforcement problems facing federal regulators in addressing online pharmacies are actually questions of drug importation law, not necessarily safety, it’s important to recognize the adverse public health risks of curtailing safe personal drug importation in efforts to crackdown on rogue online pharmacies. The FDA’s lack of jurisdiction over the safety of medications sold in Canada and other foreign pharmacies is not a public health basis for curtailing online access to those pharmacies, particularly if they are the only ones Americans can afford.

As the GAO report accurately identifies, federal regulators face obstacles to shutting down foreign online pharmacies operating abroad because they lack jurisdiction in foreign countries. The obstacles are even greater when such foreign online pharmacies are operating legally in their own countries and, more importantly, safely. For example, the FDA cannot shut down a licensed pharmacy in Canada or the United Kingdom that is legally (under Canadian or UK laws) selling prescription medication by mail-order to Americans. [2] While the Canadian government has not helped FDA shut down safe, licensed pharmacies that sell to Americans, it is very active in shutting down dangerous rogue online pharmacies. This type of balanced enforcement, which shuts down and prosecutes dangerous online pharmacy enterprises, but takes no action against licensed pharmacies in other countries operating safe international mail order pharmacies, should be viewed as the appropriate policy for federal regulators.

Removing Criminality of (Decriminalizing) Personal Drug Importation

While the FDA has never prosecuted an individual for importing small quantities of prescription drugs for personal use, the law still subjects Americans to the possibility of criminal charges. Technically, an American could be sentenced to one year in prison for importing a foreign-made prescription medication for personal use. The second offense could result in a felony with a prison term up to three years, a $10,000 fine or both. Worse, an American can be sentenced to ten years in jail or fined $250,000 for knowingly reimporting a prescription drug for his or her own use.  A reimported drug is one made in the U.S., exported to another country and imported back into the U.S.

The criminal penalties for illegal drug importation were created for those who import prescription drugs for resale, not personal use. The relevant statute should be amended to remove criminal penalties for personal drug importation. In conjunction, Congress can create stronger criminal penalties to deter dangerous rogue online pharmacy operators.

FDA’s personal drug importation guidance expressly allows the agency’s personnel to use their discretion to permit prescription drugs for personal import that are not available for sale in the U.S.  Some have interpreted this policy as a greenlight for buying prescription drugs for personal use, in small quantities, at a lower cost from Canadian pharmacies, noting that no Americans have been prosecuted for this practice. However, FDA communicates that the policy only applies to drugs that are not available in the United States (in U.S. pharmacies) and usually those carried, not shipped.

Yet what is more relevant than its guidance about regulatory discretion is FDA’s policy of non-enforcement against individuals for illegal personal drug importation, and the fact that about 99% of personal imports reach the consumers awaiting them. Most would agree that these practices have created a “yellow-light” for consumers.

So, unlike the majority of drugs personally imported by Americans, the ones that are in a sense “permitted” under the strictest interpretation of FDA’s personal drug importation policy, ironically, are not approved for sale in the U.S. The purpose of this policy is to allow Americans treatments that are not available domestically. The same common sense and compassion should extend to medications that Americans can’t afford here but can afford at foreign pharmacies, which is why personal drug importation should be decriminalized.

State Pharmacy Laws, Regulations, and Conflicts of Interest

To sell prescription drugs in the U.S. a pharmacy must have a license from the state where it operates. Safe international online pharmacies can be viewed as violating state pharmacy laws because foreign pharmacies don’t generally have U.S. state pharmacy licenses (with some exceptions mentioned below). Enforcement against foreign pharmacies is exceedingly difficult for state pharmacy boards because they have no authority over pharmacies in other countries and limited budgets.

There are exceptions where state legislatures and governors have expressly permitted personal drug importation. Interestingly, some states, such as Florida[3] and Nevada, have granted licenses to Canadian pharmacies. More recently and influentially, in 2013, Maine’s legislature voted to exempt licensed pharmacies in Australia, Canada, New Zealand, and the UK from having to obtain a Maine pharmacy license to dispense medications to Maine’s residents. While Maine does not have authority to regulate drug importation, through passage of state law LD 171 it chose to change its pharmacy statute to remove state restrictions on personal drug importation.

Prior to the law’s passage, throughout much of the last decade, the City of Portland and various companies in Maine contracted a Canadian company to provide international mail order pharmacy services to their employees. During that time, about a decade, no one was reported hurt or sickened by these imported medicines. Still, in 2012 those programs were shut down by Maine’s attorney general at the behest of Maine’s Board of Pharmacy, which argued that the foreign pharmacies were not licensed in Maine and therefore could not sell prescription drugs into Maine. By passing the personal drug importation law in 2013, Maine’s legislature removed the statutory obstacle to the personal drug importation programs and they have resumed.

The FDA has taken no enforcement action to date against Maine, the City of Portland, or companies helping their employees import lower cost medication from foreign pharmacies. The Pharmaceutical Researchers and Manufacturers of America (PhRMA), the Maine Pharmacy Association and two Maine pharmacists, sued Maine to enjoin the personal drug importation programs and invalidate Maine’s law. The case is still pending. PhRMA was dropped from the lawsuit for lack of standing, however the court granted standing to the Maine pharmacists for reasons related to commercial injury but not safety. In its ruling the Maine court noted that plaintiffs did not show any harm done to Maine residents from their past purchase of foreign drugs.

On behalf of state pharmacy boards, the National Association of Boards of Pharmacy (NABP) is the fulcrum for action regarding online pharmacies, and the organization was a critical source of information for the GAO report. The NABP has been active in tackling the issue of online pharmacies since the emergence of the industry. In 1999, NABP created its VIPPS program as a voluntary program to which online pharmacies can apply. Members are able to publish the VIPPS seal of approval, thereby identifying them as safe and lawful online pharmacies. From the program’s inception, Canadian pharmacies that sold to Americans were not eligible for VIPPS certification.

As mentioned in this report, opposition to personal drug importation by U.S. pharmacies and their owners is explained by the threat of price competition from foreign pharmacies, as well as safety concerns about foreign drugs. According to the National Association of Chain Drugstores (NACDS), U.S. pharmacies and pharmacists are commercially disadvantaged when Americans buy medication outside the country when they could do so locally.[4]

The NABP’s website states that it is an “independent and impartial” organization, but its leadership, affiliations and funding sources cast serious doubt on that assertion. The NABP, like its member pharmacy boards, are governed by owners and executives of U.S. pharmacies. In this case, many pharmacy board regulators, those who own or work in U.S. pharmacies, have a financial incentive to prevent Americans from buying medication outside the U.S. For example, the NABP’s current president has been an employee of the Walgreens Corporation since 1977.

State pharmacy boards are often led by pharmacists and pharmacy owners. As business people, they are understandably concerned about price competition from lower priced foreign pharmacies. In 2013, over 50% of state pharmacy board members worked in or owned pharmacies. U.S. pharmacy boards have been cited for serious conflicts of interest and for the dominance of leadership positions held by employees of the largest chain pharmacies, such as Walgreens, Rite Aid, CVS, and Walmart. The largest pharmacy trade association, the National Association of Chain Drugstores (NACDS), has for over a decade opposed personal drug importation and its leadership has testified before Congress about unfair commercial competition from foreign pharmacies.

It’s understandable that American pharmacists are frustrated by Americans accessing lower cost foreign pharmacies with which they can’t compete. Price competition and even employment losses, however, do not obviate the ethical imperative of the U.S. pharmacy community and their business and trade associations to impartially assess online pharmacies, their safety and cost.

A decade ago, large chain pharmacies, such as CVS and Walgreens, voiced support for reforming drug importation laws to facilitate wholesale importation of foreign prescription drugs to bring down drug costs.  Thomas Ryan, the former CEO and Chairman of CVS, stated:

While many in our industry believe that importation is a fundamentally flawed concept and oppose it without exception, I have come to a slightly different view… Millions of Americans already have opted to import drugs because they can’t afford not to. We owe it to them to face this issue head on and not look the other way.

Today, Mr. Ryan’s position often goes ignored by U.S. pharmacy groups and their appointed leaders, but the need for drug importation legal reform has never been greater.[5] In contrast to personal drug importation, new wholesale drug importation regulations, as advocated by CVS and Walgreens a decade ago, would permit lower cost foreign-made prescription drugs into our formal supply chain. (These would be drugs sold in U.S. pharmacies, not purchased directly from foreign pharmacies, and a worthy policy goal, but laden with safety and economic considerations outside the scope of this analysis).

For well over a decade, the NABP has been very active in advocating against personal drug importation as a means to lower drug prices, both as currently practiced by individual Americans and through the reform of importation laws to formally legalize personal drug importation. In a 2005 hearing before the Senate Health, Education, Labor and Pensions Committee, NABP Executive Director, Carmen Catizone testified: “If the illegal importation of drugs into the U.S. is allowed to continue unabated, the impact on patient safety will be devastating.” As demonstrated above, after ten years since Mr. Catizone’s dire warning, the impact on patient safety has not been devastating. To the contrary, while problems persist due to rogue websites, the facts show that personal drug importation through safe international online pharmacies has helped millions of Americans afford needed medications, despite the illegality.

The NABP receives large amounts of funding by drug companies. Among its publicly known funders are Pfizer, Merck, and Eli Lilly, and NABP’s financial holdings include substantial stockholdings in drug companies, U.S. chain pharmacies and wholesalers. NABP’s executive director earns about $680,000 in annual compensation, – over 1000% above the average salary of executive directors of non-profits in America.

Launched with a grant from Pfizer, NABP started the Internet Drug Outlet Identification Program to create a “Not Recommended” list of online pharmacies, all of which are considered “rogue”.  NABP does not discern between a licensed Canadian pharmacy that sells to Americans online pursuant to a valid prescription and a rogue online pharmacy (such as one that sells prescription narcotics without requiring a prescription), but classifies them both as rogue. In addition to funding the NABP, the largest pharmaceutical companies fund the NACDS, a practice that has received intense criticism from lawmakers due to lack of transparency and potential conflicts of interest.

State laws usually preclude the sanctioned personal import of prescription medication. However, the current system in which regulators, pharmacies and their trade groups create programs, policies, and laws governing online pharmacies cannot be viewed as impartial for the reasons identified above.

 [1] Drug importation laws do not ban personal drug importation. Section 801 (d) (1) of the Food Drug and Cosmetic Act bans all importation of prescription drugs manufactured in the U.S. except by the manufacturer. Any drug manufactured in a foreign FDA-approved manufacturing could be imported legally by an individual without violating federal law if the drug was packaged and labelled in accordance with FDA standards.

[2] For example, several pharmacies in Manitoba, Canada have a license designating them as an international prescription service or IPS. Under UK law a pharmacy can have a wholesale and retail license, which permits the export and international dispensing of prescription medication.

[3] Adv Care Pharmacy, located in Toronto, once held an out-of-state Florida Board of Pharmacy license # PH19692. The pharmacy was informed that its Florida license would be closed without cause, see The Florida Board of Pharmacy held that it made a mistake in issuing the license in the first place.

[4] For well over a decade, U.S. pharmacies have lobbied against personal drug importation, such as through the National Association of Chain Drug Stores (NACDS). NACDS’s government affairs VP asserted in congressional testimony:  “Legitimate pharmacies in the U.S. lose business each time a consumer buys from a drug importer rather than visiting their local pharmacies,” in a letter to John Morrall, Officer of Information and Regulatory Affairs, OMB, from S. Lawrence Kocot, Senior Vice President and General Counsel, NACDS, dated May 28th, 2002.

[5] The need is greater because drug costs are increasingly a barrier to accessing medication at U.S. pharmacies. See supra note 5 for the relevant data from the Commonwealth Fund.

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