HHS and FDA release drug importation plan to lower prices

Drugs and money sign
HHS released a plan on how to import prescription drugs from Canada to be offered at a lower price. Image: Getty/ADragan

HHS and the Food and Drug Administration released a plan on Wednesday to lay the foundation for safe importation of certain drugs intended for foreign markets.

HHS Secretary Alex Azar said that the plan represents a shift in agency thinking regarding importation from foreign countries. HHS has long been resistant to importation due to concerns about drug safety, however President Trump has been pushing for importation.

“For the first time in HHS’ history, we are open to drug importation,” said HHS Secretary Alex Azar in a call with reporters on Wednesday.

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The plan has two parts, the first being a notice of proposed rulemaking that creates a pilot project for states, wholesalers and pharmacists on how they would import drugs from Canada at a cheaper price than in the U.S.

The demonstration projects must only be limited to certain drugs due to a restriction in federal law, these include biologics such as insulin.

The plan lays out several requirements that any demonstration would need to meet to ensure safety, a key concern that has made HHS and FDA hesitant to endorse any plan for importation.

Requirements include ensuring that the drug can be tracked and traced and is properly labeled. 

The second part is a guidance from the FDA to manufacturers of FDA-approved drugs that would be imported from Canada into the U.S. The guidance would allow the manufacturer to offer a lower price than what their current distribution contracts require in order to compete with the imported drug price.

“To use this pathway, the manufacturer or entity authorized by the manufacturer would establish with the FDA that the foreign version is the same as the U.S. version and appropriately label the drug for sale in the U.S.,” according to a release on the plan.

The pathway would affect any drug such as insulin or other treatments for cancer or arthritis.

However, it remains unclear when either the guidance or the proposed rule for the demonstrations would be released.

RELATED: FDA to form working group to examine drug importation as a solution to high costs

Azar said that he has spoken with his counterpart in Canada regarding drug importation.

He said that the plan was “an avenue we were intending to go down in a safe and effective way. She has interests of the Canadian system at heart.”

Azar told reporters that over the past couple of decades there has been a maturation of the supply chain and that many countries can manage a complex and secure drug system.

Trump has also been calling for importation for quite some time. He has also recently endorsed state efforts to explore importation of drugs from Canada, including from Florida.

RELATED: Trump has blessed states' exploration of drug importation. Will it catch on?

The new plan comes a few weeks after the White House nixed a proposal to eliminate the safe harbor protection for Medicare drug rebates because of concerns about price hikes to senior premiums.

HHS also has yet to release a proposed rule to implement its International Drug Pricing Index, which would tie prices for certain Medicare Part B drugs to prices paid overseas. The administration issued an advanced notice of proposed rulemaking last year and had plans to issue the actual rule in the spring.

This is a developing story and will be updated.

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