Pharmaceuticals Public Policy

FDA sets guidelines for drug importation from Canada

Last month, the US Food and Drug Administration published a final rule providing guidance for allowing drug importation from Canada. The drugs have to be approved by the Government of Canada’s Health Canada’s Health Products and Food Branch (HPFB) and can be imported by States or Indian Tribes, or in certain circumstances by pharmacists or wholesale distributors (SIP Sponsors).

The final guidance issued today describes procedures for a drug manufacturer to obtain a National Drug Code (NDC) for certain FDA-approved prescription drugs, including biological products and combination products, that were originally manufactured and intended for sale in that foreign country. The use of an additional NDC for these products may allow greater flexibility for drug companies to offer these products at a lower price than what their current distribution contracts require. Prescription drugs, including biological products, imported under the pathway described in the final guidance could be available to patients in a variety of settings, including hospitals, health care providers’ offices or licensed pharmacies, and would include the FDA-approved labeling (including prescribing information)

Note that only prescription drugs with an NDC (i.e., generally, but not exclusively, pills) can be imported but biologic products–such as insulin–are excluded from this provision.

Will this provision help to bring down prices? Perhaps modest, but the Canadian supply is not sufficient to meet US demand. As Kaiser Health News reports:

The Canadian government told HHS [the US Department of Health and Human Services] last spring that the country doesn’t have enough drugs to spare and that the Trump plan would only worsen shortages of medicines there. It argues that Canada’s pharmaceutical market is too small to have any real impact on American prices. Canada represents 2% of the global pharmaceutical consumption, compared to the U.S.’s 44%.

More broadly, the final rule noted that it is impossible to estimate any cost savings since it is unclear which drugs would be planned to be imported.

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