On December 23, 2019, the U.S. Food and Drug Administration (FDA) published in the Federal Register a set of proposed rules covering the requirements and procedures for importing under Section 804 of the federal Food, Drug, and Cosmetic Act (FDCA) prescription drugs from Canada. It is these proposed rules under which prescription drugs intended for the Canadian market could be imported and distributed in the United States. Separately, FDA also published a draft guidance on December 18, 2019, explaining how manufacturers wishing to market a foreign version of a prescription drug (not limited to Canada) pursuant to Section 801(d)(1)(B) of the FDCA may obtain a new National Drug Code (NDC) for the imported drug, and how they may demonstrate to FDA that the foreign drug is the same as the version marketed in the United States. These proposals follow the two pathways contained in the HHS and FDA Safe Importation Action Plan, which was announced in July 2019 and is designed to lay the foundation for safe importation of certain drugs originally intended for foreign markets.

According to HHS Secretary Alex Azar “These are historic actions by HHS and the FDA, and they represent the bold nature of President Trump’s agenda for lowering drug costs. The President has recognized the opportunity to lower costs for American patients through safe importation, and we at HHS and FDA are delivering on that possibility through a safe, commonsense approach.”

As can be seen below, however, what may be considered “safe” and “commonsense” by FDA and HHS is definitely not simple, and may not be very practical or valuable in the long term. We have prepared a brief summary of the regulatory requirements below. FDA is currently accepting comments. Please let us know if you have any questions.

1. Simply put, what is the Section 804 Importation Program?

The Section 804 Importation Program (SIP) permits governmental entities (SIP Sponsors), together with pharmacists and wholesalers, if any, to import certain prescription drugs (eligible prescription drugs) from Canada if certain regulatory requirements are met. The pharmacists and wholesalers that support the SIP with the SIP Sponsor (that is, the governmental entity) are considered co-sponsors.

Under the proposed rules, a SIP Sponsor would submit a SIP Proposal that includes information on the Canadian party that ships the drug (Foreign Seller) and the U.S. importer, along with the reasons the SIP Proposal will achieve cost reduction and pose no increased risk to patients. Once FDA approves the program, the importer submits a Pre-Import Request to FDA at least 30 days before the arrival of the shipment of the drug to the United States.

Importantly, the importer and the Foreign Seller can only import drugs that the Foreign Seller acquired directly from the manufacturer. The importer must ensure that the imported shipments comply with U.S. labeling regulations, and that the drugs being imported have undergone laboratory testing for authenticity and degradation at a qualified laboratory. To be approved as a qualified laboratory, a facility must have an ISO 17025 accreditation and an FDA inspection history demonstrating the facility’s record of addressing any objectionable conditions or practices identified during its most recent FDA inspection, in addition to complying with the current Good Manufacturing Practice requirements.

2. What types of drugs are eligible for importation from Canada under SIP?

Only “eligible prescription drugs” can be imported using the SIP. An eligible prescription drug is a prescription drug that has been approved by Health Canada, while complying with the conditions specified in FDA approvals in the United States. Importantly, certain drugs that are statutorily excluded under Section 804 of the FDCA, or drugs that FDA considers to pose great risk to consumers, are excluded from the definition of eligible prescription drug. These drugs include drugs for intravenous injection, biologics, infused drugs, controlled substances, inhaled drugs (during surgery), drugs subject to REMS (Risk Evaluation and Mitigation Strategy), intrathecally injected drugs, intraocularly injected drugs, and drugs that are not “Product”1 as defined in section 582 of the FDCA.

3. What should be included in a SIP Proposal submitted to FDA?

A SIP Proposal and importation plan submitted by a SIP Sponsor to FDA will include, for example, information about the Foreign Seller, importer, relabeler, repackager, SIP Sponsor, and co-sponsor; information about the proposed eligible prescription drug and any disciplinary action and criminal history regarding the Foreign Seller and the importer; Health Canada inspection history for the Foreign Seller; data concerning testing for the drug’s authenticity and degradation; information about relabeling and repackaging for compliance as well as about the security of the supply chain (for example, measures taken against diversion and counterfeit drugs); and an explanation about how the SIP Proposal will achieve a cost reduction for consumers.

In short, FDA will expect to see information that assures the agency of the parties’ ability to ensure that only safe and effective drugs will be imported through the SIP, and that American consumers will benefit from the drugs’ reduced costs.

4. When can I submit a SIP Proposal to FDA?

Currently, this is still a proposed rule, and the program is not yet in effect. FDA is currently accepting comments2. Once FDA finalizes the rule, it expects to submit a statutorily required certification to Congress attesting that the implementation will pose no additional risk to health and safety, and that consumers would benefit from a significant reduction in drug prices. The program will be effective after FDA makes this certification.

5. What does FDA recommend in its draft guidance with regard to drugs to be imported under Section 801(d)(1)(B) of the FDCA?

Section 801(d)(1)(B) prohibits a drug manufactured outside of the United States from being imported into the United States unless the manufacturer has authorized the drug for marketing in the United States and the labeling is modified for compliance with the U.S. law. In its guidance, FDA states that manufacturers may import into the United States drugs authorized for marketing in foreign countries if the drugs comply with the statutory requirements as above (for example, labeling for FDA compliance), and if the manufacturer attests that the foreign drug is the same as the U.S. version of the drug, together with supplements to the approved New Drug Applications or Biologics License Applications3.

The implications of the programs outlined above are yet to be seen. FDA and HHS stretch logic a bit in a few cases4. To date, industry groups BIO and PhRMA have opposed the measures, calling them potentially dangerous schemes. If adopted, there may be only a limited interest due to the complexity and restrictions in the programs.

FDA is accepting comments currently on both the SIP and the draft guidance. If you would like to submit comments, please let us know.

  1. “Product” generally does not include blood or blood components intended for transfusion, radioactive drugs or radioactive biological products, imaging drugs, medical gas, homeopathic drugs, or drugs compounded in accordance with specified FDA requirements.
  2. FDA seeks comments on many aspects of the proposed rule, including the time frame for the review of a SIP Proposal, whether any applications should be prioritized or whether all applications must be processed on a first-come-first-serve basis, division of responsibilities between co-sponsors, and whether a pharmacist or wholesaler should be able to serve as both a co-sponsor and an importer. While FDA did not state so explicitly, its concern with a pharmacist or wholesaler serving as both a co-sponsor and an importer is likely that a conflict could arise between a co-sponsor’s obligation to manage and oversee a SIP, and the financial incentives that could exist for an importer to make the importation process as quick as possible, perhaps at the cost of quality management of the SIP.
  3. In its guidance, FDA states that “under this pathway, a manufacturer could import such drug if, consistent with section 801(d)(1)(B) of the FD&C Act, the drug is manufactured outside the United States and the manufacturer has authorized the drug to be marketed in the United States and has caused the drug to be labeled to be marketed in the United States.”
  4. By way of example, FDA’s draft guidance states that FDA has become aware that “some drug manufacturers may be interested in offering certain of their drugs at lower costs and that obtaining additional NDCs for these drug may help them to address certain challenges in the private market” – yet, obtaining a new NDC and selling a drug at a lower cost is not a novel concept and occurs under the current U.S. regulatory scheme (for instance, authorized generics, repackaged kits).