Prescription Drug Importaion

You asked for information on other states’ activities concerning prescription drug importation.

As spending on prescription drugs continues to increase for both government (state, county, and local) as well as for individuals, some are turning to foreign countries, particularly Canada, to purchase prescriptions.

A number of states are pursuing a variety of avenues in attempting to either directly access prescription drugs from Canadian sources or to enable their citizens to get information about and ways to acquire such drugs. These include legislative initiatives, proposed pilot programs, governor-based actions, budgetary actions, studies, and lawsuits. Connecticut passed legislation this session directing the social services commissioner to evaluate the feasibility of importing drugs from Canada for the state’s ConnPACE program.

These activities, while promoted by some, are raising concerns, particularly on the part of the federal government. The federal Food and Drug Administration (FDA) is concerned about the safety risks associated with importing prescription drugs from foreign countries. Basically, the FDA warns that it cannot adequate assurance to the public that the drug products delivered to consumers in the Unites States from foreign countries are the same products approved by FDA. Such safety concerns are reflected in the import provisions of the Federal Food, Drug, and Cosmetic Act (FFDCA), which strictly limit the types of drugs that may be imported into the United States. Congress enacted these provisions "to create a relatively `closed' drug distribution system, which helps ensure that the domestic drug supply is safe and effective," according to the FDA. (see FDA Opinion No. 03-601 (response to the California Attorney General), August 25, 2003).

(For more information on the legal issues concerning prescription drug importation, see OLR Report 2003-R-0713).

The 2004 General Assembly addressed the prescription drug importation issue. PA 04-101 requires the Department of Social Services commissioner to evaluate the (1) feasibility, health and safety, legal sufficiency, and cost effectiveness of reimporting prescription drugs from Canada for the ConnPACE program and (2) feasibility of waiving the ConnPACE copayment for such drugs. She must report by January 1, 2005 to the Human Services, Appropriations, and Aging committees.

Several bills are under consideration in California on the drug reimportation issue. AB 1957 would require the California State Board of Pharmacy to establish a Web site by July 1, 2005 to help California residents safely buy prescription drugs at reduced prices. It requires the Web site to include price comparisons of prescription drugs, including prices charged by licensed pharmacies in the state and Canadian pharmacies that provide mail order service to the United States that meet certification requirements established under the bill. This bill has passed the California Assembly and is now before the state Senate.

Another bill (SB 1144) permits the state General Services Department to purchase pharmaceuticals from authorized Canadian pharmacies or sources, as well as existing in-state sources, for use with state hospitals and prisons. It also adds Canada to a required progress report on bulk and discount purchasing that is due February 1, 2005. This bill has passed the Senate and was recently sent to the Assembly.

B 1149 would require the State Board of Pharmacy to collect and publish information concerning suppliers of dangerous drugs that are located and operating outside of the United States and have violated safe shipment, handling and processing standards. This bill has passed the California Senate and is before the Assembly.

Finally, SB 1333 authorizes the Department of Health Services to reimburse a pharmacy that provides to a Medi-Cal (Medicaid) or AIDS Drug Assistance Program beneficiary a prescription drug that was purchased from a Canadian pharmacy. This bill received a favorable committee report but then was re-referred to committee.

In December 2003, Illinois Governor Rod Blagojevich announced that the state was submitting a formal request to the federal Department of Health and Human Services (HHS) to allow it to begin a federally approved drug importation pilot program. Under the governor’s proposal, the state would develop a preferred drug list, in conjunction with the FDA, which would detail the drugs that can be safely obtained from Canadian sources. As part of the pilot, the state would implement a number of protections to ensure patient safety, including requiring plan participants to first have an eligible prescription filled by an Illinois pharmacy with a 30-day supply before obtaining a refill for that drug through the importation program.

On April 8, 2004, the governor announced that Illinois was asking the FDA, through the filing of a “citizen’s petition,” to respond within six months to its request for the pilot program to import Canadian drugs. In the petition, the state repeated its request for HHS to certify that importing drugs from Canada could be done safely and cost-effectively. Also, the petition asks the federal government to allow the state to establish one of several importation models outlined in the state’s official request. According to the governor, if the FDA fails to respond to the petition within six months, then Illinois can sue it (BNA, Health Law Reporter, April 15, 2004, p. 544).

The Maryland Legislature passed a bill in its recently concluded 2004 session that addresses the drug reimportation issue. SB 167 requires the state Department of Health and Mental Hygiene, by November 1, 2004, to seek approval of a waiver from the FDA to operate a Canadian Mail Order Plan to purchase and import prescription drugs from Canada and to certify the safety and efficacy of the imported prescription drugs. The bill authorizes the health and mental hygiene secretary to include enrollees and recipients of other state prescription drug programs in the mail order plan (see http: //mlis. state. md. us/2004rs/billfile/SB0167. htm).

On May 20, 2004, the Massachusetts Senate approved measures authorizing state government health plans to purchase drugs from Canada and allowing state agencies to provide citizens with information on how to obtain Canadian drugs. Both provisions condition implementation on federal government approval. The plans were adopted as amendments to the FY 2005 budget (S. 2400). A final version of the budget bill is subject to agreement by a Senate and House conference committee.

The amendment for Canadian drug purchasing would cover state employees, retirees and dependents; Medicaid recipients; and enrollees in a state-subsidized prescription drug insurance plan. It would take effect “within 90 days of such purchase becoming legal under federal law. ”

Purchases would be made through licensed Canadian pharmacies and be limited to a maximum 90 days’ supply of valid prescriptions for products approved in Canada and subject to standards for packaging and shipment established by Massachusetts.

The other amendment requires the Governor to request a waiver from the federal HHS to allow the state to act as an agent for residents in providing information on purchase of Canadian drugs. A new state agency would establish relationships with Canadian suppliers licensed by the Canadian government and post information on a website on how to obtain approved prescription drugs (BNA, Health Law Reporter, May 27, 2004, p. 774).

On May 13, 2004, Minnesota Governor Tim Pawlenty announced a prescription drug program that enables state employees to buy Canadian drugs for themselves and their dependents. This is the second program unveiled in the state this year to allow Minnesotans to access lower-priced Canadian drugs. The FDA apparently planned to send the state a letter saying that the program is illegal (BNA, Health Law Reporter, May 20, 2004, p. 740).

State employees who use the state’s Advantage Health Plan will not have to pay any co-payments if they use the Canadian prescription program. Under the plan, state employees and their dependents will be able to order 45 brand name prescription drugs from Canadian pharmacies through the mail and over the Internet. (More information is available at http: //www. advantage-meds. com)

In another Minnesota development, a lawsuit seeking class-action status accuses several major pharmaceutical companies of violating antitrust laws by preventing U. S. consumers from purchasing prescription drugs from Canada (Iverson v. Pfizer Inc. , D. Minn. No. 04 CV-2724, May 19, 2004). The suit, filed in U. S. District Court in Minnesota by the Minnesota Senior Federation, alleges that the drug companies are violating state and federal antitrust laws by limiting or threatening to limit supplies to Canadian pharmacies suspected of reimporting their products into the United States. Apparently, some drug companies have stopped supplying pharmacies that are known to reimport drugs in violation of contractual agreements. (For more information, see http: //front. mnseniors. org/druglawsuit/complaint051904. pdf. )

Proposed New Hampshire legislation (SB 434) would establish a commission to study methods for making prescription drugs more affordable for New Hampshire citizens, including importing drugs from Canada. At last report, this bill had passed both chambers of the legislature and was in conference committee (see www. gencourt. state. nh. us/legislation/2004/SB434. html).

New Hampshire conducted an investigation of Canadian pharmacies to examine whether Canadian prescription drugs were a safe, effective, low-cost alternative to drugs manufactured in this country. A March 2004 report of the State Board of Pharmacy and the State Forensic Lab concluded that both the physical and scientific reviews of sample prescriptions showed no significant differences between the American and Canadian samples. The physical examination compared prescriptions filled by Canadadrugs. com (identified by the New Hampshire Department of Health and Human Services as meeting all necessary safety guidelines) and prescriptions filled by local U. S. chain pharmacies. The State Board of Pharmacy study found each Canadian sample to be in original manufactured containers with safety seals and childproof caps, and labeling was comparable to their U. S. counterparts.

The scientific examination, performed by the state Police Forensic Laboratory, compared the presence of the active ingredient in each of the samples. The examination showed that all the samples contain the active ingredient identified on the label. (For more information go to http: //www. state. nh. us/governor/pr_03_31_04drugtesting. html. )

Vermont’s FY 2004-05 Appropriations Act requires the state to establish a program to describe how Vermont residents can purchase prescription drugs from Canada. This program must provide information about ordering prescription drugs through the mail or otherwise from a participating Canadian pharmacy. The health department must establish a website and written information regarding the program. At last report, the legislation had passed both houses and was awaiting the governor’s action.

Among its many provisions, West Virginia’s “Pharmaceutical Availability and Affordability Act of 2004” (HB 4084; signed by the governor on April 7, 2004) requires the state to explore the feasibility of (1) using or referencing, the federal supply schedule or Canadian pricing and (2) purchasing prescription drugs from Canada, including the feasibility of serving as a wholesale distributor of prescription drugs in the state.

More detail on the West Virginia legislation can be found in OLR Report 2004-R-0310.

On May 4, 2004, 19 state attorneys general (AGs) wrote to federal Health and Human Services (HHS) Secretary Tommy Thompson urging him to adopt a procedure to allow states to import prescription drugs. In their letter, the AGs proposed an importation procedure with three elements:

1. either allow states to be appointed as licensed wholesalers or allow them to contract with licensed wholesalers for the importation of FDA-approved prescription drugs from Canada;

2. provide for states to work with Health Canada (the Canadian equivalent of HHS) and the FDA to inspect Canadian pharmacies and exchange drug plant inspection information; and

3. require drugs to be manufactured in FDA-approved facilities and imported into the United States from Canada in their original packaging, with provision for labeling and tracking of drugs.

The state AGs said that the FDA itself had suggested using licensed wholesalers as a way to decrease the incidence of counterfeit prescription drug shipments. The letter was signed by the AGs of Arizona, California, Colorado, Connecticut, Illinois, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Mexico, New York, Ohio, Oregon, Rhode Island, Vermont, Washington, and Wisconsin (BNA Health Law Reporter, May 13, 2004, p. 702).


June 4, 2004		2004-R-0463
PRESCRIPTION DRUG IMPORTATION

By: John Kasprak, Senior Attorney