Health Law Daily Canadian import rules seek to lower drug costs for Americans
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Thursday, October 1, 2020

Canadian import rules seek to lower drug costs for Americans

By Gregory Kane, J.D., M.B.A.

HHS published its final rules to allow the importation of prescription drugs from Canada.

The Secretary of Health and Human Services (HHS) issued the final rule to allow the importation of certain prescription drugs from Canada which contains all the requirements for a sponsor to obtain such drugs from a Foreign Seller and demonstrate both a costs savings and the lack of any additional risk to the public’s health and safety (Final rule, 85 FR 62094, October 1, 2020).

Background. With the intention of significantly reducing the cost of certain prescription drugs to American consumers without posing additional risks to the public’s health and safety, HHS used the final rule to implement section 904(b) through (h) of the Food, Drug and Cosmetic Act (FDCA) to allow importation of certain prescription drugs shipped from Canada. Under the final rule, section 804 will be implemented through time-limited Section 804 Importation Programs (SIPs) by authorization of the Food and Drug Administration (FDA) and managed by individual states, Indian Tribes or, in select circumstances, pharmacists or wholesale distributors (SIP Sponsors).

Final rule. The final rule requires SIP Sponsors to specify the eligible prescription drugs included in the SIP, which must be legally sold in both the Canadian and American market with the corresponding appropriate labeling. SIP Proposals must identify the Foreign Seller in Canada that will purchase the eligible prescription drug directly and the Importer in the United States that will buy the drug directly from the Foreign Seller. Both the Foreign Seller and the Importer will be subject to the supply chain security requirements of the FDCA. Each SIP Sponsor is required to provide the FDA with product information including the cost savings to the American Consumer.

After the FDA authorizes a SIP Proposal, the Importer must submit a Pre-Import Request to the FDA at least 30 days prior to the scheduled date of arrival. Entry and arrival of shipments is limited under the final rule to the US Customs and Border Protection port of entry authorized by the FDA. The final rule also requires the manufacturer or the Importer to conduct Statutory Testing of the drug. An SIP is eligible for extension by the FDA prior to the end of its authorization and may also be terminated by the FDA at any time.

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