At the end of August, Florida submitted a “Canadian Prescription Drug Importation Concept Paper” to the U.S. Department of Health and Human Services (HHS). As we previously reported, in April 2019, Florida became the second state to pass a bill allowing for the importation of prescription drugs from Canada. (In May 2018, Vermont became the first state to pass this kind of law; Colorado and Maine passed similar laws in May and June 2019, respectively (see our coverage here, here, and here)). Florida’s bill directed the state’s Agency for Health Care Administration (AHCA) to establish a Canadian Prescription Drug Importation Program and an International Prescription Drug Importation Program. Florida Governor Ron DeSantis signed the bill into law on June 12, 2019.
Federal drug importation laws allow for the commercial importation of drugs if the Secretary of HHS certifies that the importation will pose no additional risk to public health and safety and will result in a significant reduction in the cost of covered products to the American consumer (21 U.S.C. § 384). AHCA prepared the Concept Paper to set forth how Florida’s Canadian drug importation program will satisfy the federal drug importation requirements.
The Concept Paper describes an importation program that will be overseen by AHCA through a still-to-be-identified contracted vendor. The vendor will be charged with identifying and maintaining a list of Canadian suppliers who have agreed to export drugs under the program. The vendor will also be responsible for developing a list of prescription drugs that have the highest potential for cost savings. The Concept Paper includes a list of thirteen potential Canadian suppliers, although it appears that these suppliers have not yet expressed interest in participating in the program.
Eligible importers will be limited to wholesalers and pharmacists that dispense prescription drugs to Florida consumers that receive services from certain state/government programs including Florida Medicaid and the Florida Department of Corrections. For administrative efficiencies, the Concept Paper states that the vendor will serve as the primary importer on behalf of the various state programs.
In accordance with federal law, the Florida program will not import controlled substances, biological products, infused and parenteral drugs, intravenously injected drugs, or drugs inhaled during surgery. The state plans to import qualifying prescription drugs through bulk orders, but will only import a limited number of drugs that can yield the most cost savings. The Concept Paper includes a preliminary list of nineteen drugs that could qualify for importation; ten of the candidates are HIV medications.
To ensure the safety of imported products, Florida expects to utilize the existing drug distribution supply chain and wholesale track and trace requirements. Canadian exporters will be required to register with the FDA and appoint a U.S. Agent. Imported prescription drugs will be sampled and tested by a qualified laboratory; the drugs will also be repackaged and relabeled prior to importation to meet U.S. drug labeling requirements. The vendor is expected to maintain an electronic system to collect transaction information as well as information from the Canadian suppliers regarding the original source of the drug.
In contrast to the preliminary findings of Vermont’s Agency of Human Services which suggested that the costs of implementing a drug importation program would outweigh the savings (see our coverage here), Florida’s Concept Paper states that the Canadian Prescription Drug Importation Program will yield savings of over $150 million per year. Certain costs are expected to be borne by the commercial participants in the program (i.e., the FDA-approved drug manufacturer or distributor, the Canadian supplier, and/or the vendor overseeing the program).
The current federal drug importation laws became in effective in 2003, but HHS has yet to certify a single drug importation program. In its Concept Paper, Florida asserts that the proposed program will pose no additional risk to public health and safety and will result in cost savings. Florida urged HHS to develop regulations that would allow for the commercial importation of lower cost drugs into the U.S. We will continue to monitor and report on state and federal efforts to address drug pricing.