Bills
| 3.23.22

Should American Patients be Allowed to Import Lower-Cost Prescription Drugs From Overseas? (S. 97)

Do you support or oppose this bill?

What is S. 97?

(Updated February 5, 2020)

This bill — the Affordable and Safe Prescription Drug Importation Act — would instruct the Secretary of Health and Human Services to put forward regulations allowing wholesalers, pharmacies and individuals to import qualifying prescription drugs from licensed Canadian sellers. After two years, the secretary would have the authority to permit importation from countries in the Organisation for Economic Co-operation and Development (OECD) with standards for the approval and sale of prescription drugs that are comparable to those in the U.S. 

In order to ensure consumer safety, this bill includes provisions for FDA certification of foreign sellers, clearly defines what types of drugs may be imported, and sets requirements for supply chain security. Specifics of those provisions are outlined below:

IMPORTATION OF NON-COMPOUNDED DRUGS ONLY & LIMITATIONS ON BIOLOGICS 

Legally imported drugs under this bill would be required to be purchased from an FDA-certified foreign seller and have the same active ingredient, route of administration and strength as drugs approved in the United States. Certain types of drugs, such as certain biologics, could only be imported by wholesalers or pharmacies. This bill would not permit importation of controlled substances, anesthetic drugs inhaled during surgery, or compounded drugs. 

REQUIREMENTS FOR “CERTIFIED FOREIGN SELLER” STATUS

To be a “certified foreign seller,” an entity would have to be a wholesale distributor or licensed foreign pharmacy, be current with any applicable registration fees, and sell only qualifying prescription drugs. 

Certification criteria would require the establishment to:

  • Be located in Canada;
  • Be engaged in the distribution of prescription drugs offered for importation under this bill; 
  • Have been in existence for at least five years and has a purpose for existing other than for this program
  • Only sell to individuals after receiving a valid prescription
  • Certify that the physical premises and data reporting procedures and licenses are in compliance with all applicable laws and regulations in Canada, and has implemented policies to monitor compliance;
  • Conduct ongoing and comprehensive quality assurance programs, including blind testing; 
  • Agree to use laboratories approved by the HHS Secretary to test product samples;
  • Agree to notify the Secretary, importers, and individuals of product recalls;
  • Have a process for resolving grievances and will be held accountable for violations of established rules;
  • Not sell products to U.S. customers that are illegal in Canada; and 
  • Meet any other criteria established by the Secretary. 

Certified foreign sellers would also be required to undergo recertification every two years or until there is a material change in circumstances and pay a fee (to be determined by the HHS Secretary) to fund the administration and enforcement of the drug importation program.

LIMITATIONS ON INDIVIDUALS IMPORTING PRESCRIPTION DRUGS

This bill would limit who can import prescription drugs from overseas. It’d require that such individuals only purchase for personal use in quantities that don’t exceed a 90-day supply, have a valid prescription issued by a U.S. health care practitioner, and only import from pharmacies licensed to practice pharmacy and dispense drugs in Canada.

REPORTING REQUIREMENTS FOR DRUG IMPORTERS

Under this bill, drug importers would be required to submit biannual reports to the HHS Secretary detailing the drugs they are purchasing from certified foreign sellers, including the name, strength and dosage form, number of containers and container size, lot number, date of the transaction and shipment, business names and addresses of seller and purchaser, and the unique facility identifier where the drug was manufactured.

SUSPENSION OF IMPORTATION

This bill would grant the HHS Secretary authority to suspend the importation of a product or suspend all products from a certified foreign seller or importer if there is an importation involving counterfeit drugs, drugs that have been recalled or withdrawn, or drugs in violation of any requirement of this section until an investigation is completed and the Secretary determines that the drug, seller, or importer does not endanger the public health. The Secretary would have to suspend a product or all products from a seller or importer if there is a pattern of such violations.

PROHIBITION ON DELAYING IMPORTATION OF QUALIFYING DRUGS

Except in the case of a drug shortage, the bill would prohibit drug manufacturers from directly or indirectly engaging in actions to restrict, prohibit, or delay the importation of qualifying drugs under this program.

REPORT TO CONGRESS ON PROGRAM’S EFFICACY

The HHS Secretary would be required to issue a report to Congress and the public on this program no later than a year after this bill’s passage. Additionally, the Government Accountability Office (GAO) would be required to conduct a study to analyze the implementation of the Act, including a review of drug safety and cost-savings and expenses, including cost-savings to consumers in the United States and trans-shipment and importation tracing processes, within 18 months of this bill’s passage.

Argument in favor

Prescription drug prices in the U.S. are incredibly high compared to many other countries, such as the U.K. and Canada. Patients whose drugs are cheaper outside the U.S. should be allowed to buy their drugs from there in order to keep their healthcare costs as low as possible. Reducing prescription drug costs for patients will save lives and reduce the cost of health care in the U.S. — both noble goals worth pursuing through federal policy.

Argument opposed

Pharmaceutical companies need the revenue from their sales in the U.S. to fund innovative research that saves lives. Additionally, allowing personal importation from other countries might lead to unsafe or counterfeit medication entering the U.S., putting patients’ lives at risk. Finally, the FDA and HHS have already released a plan allowing states to develop pilot importation programs. All of this indicates that this bill isn’t necessary.

Impact

Patients; healthcare system; healthcare costs; pharmaceutical companies; pharmacies; and other countries with lower prescription drug prices than the U.S.

Cost of S. 97

Last Congress, the CBO estimated that the drug importation this bill allows would save the federal government $1 to $1.5 billion a year. Over a ten-year period from 2017-2027, the CBO estimated that it could save nearly $7 billion.

Additional Info

In-Depth: Sen. Bernie Sanders (I-VT), a candidate for the 2020 Democratic presidential nomination, reintroduced this bill from the 115th Congress as part of a three-bill package to dramatically reduce prescription drug prices in the United States. This specific bill would allow patients, pharmacists and wholesalers to import safe, affordable medicine from Canada and other major countries. In a press release about the bill package, Sen. Sanders said: 

“The United States pays by far the highest prices in the world for prescription drugs. This has created a health care crisis in which 1 in 5 American adults cannot afford to get the medicine they need. That is why I am introducing legislation to drastically bring down the cost of prescription drugs. If the pharmaceutical industry will not end its greed, which is literally killing Americans, then we will end it for them."

Rep. Elijah Cummings (D-MD), sponsor of this bill’s House companion in both the 115th and 116th Congresses, says of the three-bill package: 

"These bills are important because it’s time to provide much-needed relief to the American people. No more talk. No more tweets. The American people want action. They should not have to decide between paying their bills or paying for their prescriptions. We’re a better country than that. We need real and immediate action to lower drug prices in this country. The American people deserve that, and I will do everything I can to help deliver that for them." 

Social Security Works has endorsed the full three-bill package on drug pricing. In a letter to Sen. Sanders and Rep. Cummings, Social Security Works president Nancy J. Altman and executive director Alex Lawson write: 

“The Affordable and Safe Prescription Drug Importation Act is an essential first step to ensuring seniors, disabled Americans, and many others have access to affordable prescription drugs. By allowing Americans the freedom to buy safe prescription drugs from licensed, FDA-certified foreign sellers, Congress will save lives and ensure a quality life for the most vulnerable Americans.”

During his 2016 presidential campaign, President Trump repeatedly said that he’d take action against drug companies to bring prices down. After his election, then-President-elect Trump said that drug companies were “getting away with murder” in regards to drug prices. As President, Trump has backed multiple regulatory actions aimed at reducing drug costs, including approving more generic drugs and using lower international prices to save money for Medicare. He has also used his Twitter account to criticize individual drugmakers.

Dr. Joel Lexchin, a former emergency department physician and drug policy expert at York University in Toronto, Canada, says it’s “fine for an individual” to buy drugs from Canada, but the U.S. government needs to tackle drug pricing for a sustainable solution:

“Even if the US bought every pill in Canada, you have almost 10 times the population. This is not going to solve the problem of drug prices in the United States. The solution is for the US to start regulating its own prices. And you can do that.”

The Pew Charitable Trusts also points out that pharmaceutical companies could easily change their pricing to account for international personal importation:

“Importing drugs into the U.S. could also affect foreign markets, and pharmaceutical manufacturers might alter their pricing strategies. To mitigate decreased U.S. revenue, manufacturers could seek to increase their prices abroad. In addition, the U.S. market’s large size could strain the supply of pharmaceuticals, resulting in drug shortages in other countries if importation were to be implemented on a large scale.”

Since drug companies have the power to change their pricing strategies as they deem it appropriate to do so, allowing U.S. patients to buy their prescription medication overseas could push prices up in other markets.

The pharmaceutical lobby fiercely opposes efforts to allow drug importation for personal use, arguing that U.S. Food and Drug Administration (FDA) oversight protects consumers from unsafe medications. Making their case against importation, pharmacy groups have also argued that it opens the door to counterfeit, adulterated and tainted medications. The Pharmaceutical Research and Manufacturers Association of America (PhRMA) also argues that the price spikes of a few years ago have eased, and government intervention on prices will stifle innovation and deprive patients of access to innovative medications.

According to WEP Clinical, many FDA officials — including FDA Commissioner Scott Gottlieb — worry that drug importation could undermine the U.S. regulatory regime, which is meant to ensure patients’ safety: 

“Many within the FDA also oppose Sanders’ bill as they worry it could derail the carefully constructed system currently in place to ensure the safety of US medical products. The current FDA commissioner, Scott Gottlieb, has stated that the FDA lacks the resources necessary to regulate incoming drugs meaning that imported products would not be approved by the agency.”

This legislation has 24 Senate cosponsors, including 23 Democrats and one Independent, in the 116th Congress. Its House companion, sponsored by Rep. Elijah Cummings (D-MD), has 26 Democratic House cosponsors. Neither bill has received a committee vote.

In the 115th Congress, this legislation had 22 Senate cosponsors, including 21 Democrats and one Independent. Its House companion, sponsored by Rep. Cummings, had 29 Democratic House cosponsors. Neither bill received a committee vote last Congress.

In the current Congress, Social Security Works and the Campaign for Personal Prescription Importation have expressed support for this legislation. Last Congress, this bill was supported by a range of patient, progressive, and consumer advocacy groups, including the Alliance for Retired Americans, American Federation of Teachers, Center for Medicare Advocacy, CREDO, DailyKos, Economic Policy Institute, Justice in Aging, MoveOn, NAACP, National Center for Health Research, National Committee to Preserve Social Security and Medicare, National Organization for Women, PharmacyChecker.com, Prescription Justice, Progressive Change Campaign Committee, RxRights, Social Security Works, Democracy for America, Patients for Affordable Drugs, Consumers Union, National Nurses United, and Families USA.

The two other bills (both sponsored by Sen. Sanders in the Senate) in the three-bill package are: 

  1. The Prescription Drug Price Relief Act (S.102 / H.R.465): would peg the price of prescription drugs in the United States to the median price in five major countries: Canada, the United Kingdom, France, Germany and Japan.
  2. The Medicare Drug Price Negotiation Act (S.99 / H.R.275): would direct the Secretary of Health and Human Services (HHS) to negotiate lower prices for prescription drugs under Medicare Part D.


Of Note: In 2017, one in five Americans reported that they didn’t fill a prescription due to cost. Meanwhile, the same medications, manufactured by the same companies, are available for a fraction of the prices charged in the U.S. This has real consequences: in 2017, Americans spent $1,208 per person on prescription drugs while Canadians spent $860 and British people spent $476.

In January 2019, the House and Senate held separate hearings to address high drug prices. The January 2019 Congressional hearings particularly focused on insulin, the cost of which has risen significantly in recent years. Reuters reported that the annual cost of treating a type 1 diabetes patient in the U.S. nearly doubled from 2012 to 2016, increasing from $2,864 to $5,705.

Buying drugs from Canada can cost as much as 80% less than buying them in the U.S., thanks to government-negotiated prices in Canada. For example, Solvadi, a hepatitis C drug, costs $90,000 U.S. retail for a 12-week course; in the U.K., it costs $16,770 a month, and $14,493 in Canada. Gleevec, a leukemia drug, is an even more dramatic example: it costs $10,122 in the U.S., $2,645 in the U.K., and $2,420 in Canada.

Federal regulations currently strictly limit the importation of prescription drugs from foreign countries for personal use. However, the FDA doesn’t prosecute consumers for buying medicines for foreign pharmacies for personal use. Instead, if they’re detected, such packages are intercepted at the border and their contents are returned or destroyed. 

Additionally, consumers who meet the following conditions can import 90-day supplies of some prescription drugs and medical devices if they meet the following conditions:

  • The drug is to be used to treat a serious condition and no effective treatment is available in the U.S.; 
  • They won't be selling it or promoting it to others in the U.S.;
  • The medication doesn't represent an unreasonable risk;
  • They affirm in writing that the drug is for their personal use; and
  • The quantity is no more than a three-month supply and they provide the name and address of the doctor licensed in the United States responsible for their treatment with the medication, or they provide evidence that the medication is for continued treatment begun in a foreign country.

In December 2016, Kaiser Health News reported that unaffordable drug prices in the U.S. were already pushing millions to buy medicine outside the country. Rachel Bluth reported:

“As drug prices have spiraled upward in the past decade, tens of millions of generally law-abiding Americans have committed an illegal act in response: They have bought prescriptions outside the US and imported them.”

Sen. Sanders’ office notes that there were 96 drug price hikes for every price cut in the first seven months of 2018. It also notes that four major drug manufacturers combined to make over $50 billion in profits in 2018.

In 2018, the FDA convened a new working group to examine importation through the lens of using it as a tactic to alleviate drug shortages from single-source manufacturers. In a July 2018 statement on the FDA website, Gottlieb wrote: 

“As part of our public health mission, the Food and Drug Administration monitors the pharmaceutical supply chain to support patient access to medically necessary drugs… [T]he FDA maintains a publicly available list of drugs that are determined to be in shortage. We work closely with manufacturers and others to support patient access to these drugs while they’re in shortage. We know, however, that for certain critical medicines, where there are no blocking patents or exclusivities associated with the drugs, but where there is only a single manufacturer (sole-source); conditions may develop that create significant barriers to, and ultimately threaten, patient access. Such conditions could include dislocations in the supply chain or sudden, significant price increases that close off channels of availability. These circumstances can leave patients without access to drugs they need… These disruptions can create public health consequences that are similar to the occurrence of a drug shortage. We want to examine whether—under these narrow conditions—the additional market competition from the short-term importation of foreign versions of the drug may complement the FDA’s current efforts, and help meet near-term patient need in the U.S. until new competition is able to enter the domestic market. To pursue these considerations, we’re forming a work group to explore various policy frameworks that, through the exercise of enforcement discretion or otherwise, would involve the importation of drugs under circumstances that meet these criteria and that would be suitable substitutes for the FDA-approved version of the medically-necessary drugs. We will consider whether and how the foreign versions of these medicines can be imported with adequate assurances of safety and effectiveness.”

However, Gottlieb clarified that a policy allowing drug importation would be a temporary measure until adequate competition enters the categories in question. He also cautioned that any resultant policy would need to be structured to eliminate the risk of counterfeit or unsafe drugs entering the U.S. supply chain.

At the end of July 2019, then-HHS Secretary Alex Azar said the federal government is “open for business” on strategies allowing Americans to import certain lower-cost prescription drugs from Canada. In their preliminary plan, HHS and the FDA called on states, wholesalers and pharmacists to submit plans for demonstration importation projects for HHS review. Under the proposal, insulin, biological drugs, controlled substances, and intravenous drugs wouldn’t be eligible for importation. The plan also gave manufacturers the option of importing versions of any FDA-approved drugs — including insulin — from foreign countries and selling them at a lower cost than the same U.S. versions, allowing drugmakers to avoid some of their contractual obligations with pharmacy benefit managers (PBMs).

Drugmakers were quick to criticize the administration’s proposal. Pharmaceutical Research and Manufacturers Association of America (PhRMA) president and CEO Stephen J. Ubl called the plan “far too dangerous for American patients” and added: 

“There is no way to guarantee the safety of drugs that come into the country from outside the United States’ gold-standard supply chain. Drugs coming through Canada could have originated from anywhere in the world and may not have undergone stringent review by the FDA.”

Trish Riley, executive director of the National Academy for State Health Policy, which is working with states on setting up importation plans, says the plan to have states set programs up could take years due to the slow federal rulemaking process.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / hillwoman2)