We are all concerned about the costs of healthcare—especially cancer care—in the United States. Every day, patients and those who care for them face difficult questions about whether needed treatment will be affordable. The medical practices that prescribe drugs for their patients have an ethical and legal liability to obtain drugs that meet safety, efficacy, and quality standards. Employers have a fiduciary responsibility to their employees to provide health benefits plans that follow important US drug safety measures and help to ensure that counterfeit and/or unsafe drugs are not provided to unsuspecting employees.
A number of specialty pharmacies and vendors are offering international drugs to employee health benefit plans as an alternative to paying for specialty pharmaceuticals obtained from domestic sources in the United States.
It Is Mostly Illegal to Import Drugs, but It Is Happening
Despite FDA warnings that “in most circumstances, it is illegal for individuals to import drugs into the U.S. for personal use because such drugs often have not been approved by the FDA,”1 drug importation is a hot topic and proposal for several states, and it is also considered a viable option for many employers seeking less expensive specialty pharmaceuticals. A number of specialty pharmacies and vendors are offering international drugs to employee health benefit plans as an alternative to paying for specialty pharmaceuticals obtained from domestic sources in the United States.
When Can It Be Done Legally?
Personal Importation by US Citizens
The FDA states that it “cannot ensure the safety and effectiveness of medicine purchased over the Internet from foreign sources, storefront businesses that offer to buy foreign medicine for you, or during trips outside the U.S. For these reasons, the FDA recommends only obtaining medicines from legal sources in the U.S.”2 In limited circumstances, individuals can import drugs for their own personal use, usually in not more than a 3-month supply. The personal importation pathway is not for drugs for a serious condition for which effective treatment is available domestically either through commercial or clinical means. The personal importation pathway is also not applicable to drugs obtained for state or employer health benefit programs.2
Manufacturer or State/Indian Tribe Entities
The FDA and the Department of Health and Human Services have provided 2 pathways to allow importation of certain prescription drugs that were originally intended for foreign markets.
Manufacturer guidance for industry describes procedures manufacturers could follow to facilitate importation of drugs—but few, if any, have chosen to use this pathway.3
States/Indian tribes may submit proposals to the FDA for drug importation for review and authorization under Section 804 of the Federal Food, Drug, and Cosmetic Act (FD&C Act). These Section 804 Importation Program (SIP) proposals require demonstration that their importation program will result in a significant reduction in the cost of eligible prescription drugs to the American consumer without posing any additional risk to the public’s health and safety.4 SIP sponsors must also ensure several other requirements are met related to import of the shipment, including ensuring that the drugs were relabeled with the FDA-required labeling and include a statement that the drugs were imported under a SIP; that the drugs were screened for evidence that they were adulterated, counterfeit, damaged, tampered with, expired, contain a suspect foreign product, or illegitimate; and that the drugs were subjected to laboratory testing for authenticity, stability, and compliance with established specifications and standards. Other SIP sponsor obligations include ensuring integrity of the supply chain, monitoring and submitting adverse event reports, complying with drug recall procedures, and submitting quarterly reports to the FDA.5
To date, only Florida has successfully submitted a proposal to the FDA under the SIP program. The January 5, 2024, authorization represented just 1 step forward. Florida still has additional steps to fulfill before their plan can be implemented. A preimport request must be submitted to the FDA for each drug it seeks to import, and no drug can be imported until after the FDA approves that request. In addition, the state will be required to conduct quality testing of the drugs and ensure that drug labels meet FDA standards. So far, Florida intends to request approval to import only 14 drugs, which will be available only to patients of certain state agencies and government programs or facilities. Imported drugs under this application will not be available to people with employer insurance or uninsured individuals.
Many other states (including Colorado, New Mexico, New Hampshire, Vermont, North Dakota, and Texas) have passed or are considering legislation to pursue the importation of drugs from Canada under the SIP program, but no applications have yet been approved by the FDA for any state except Florida. Health Canada has been very vocal, however, about not allowing drug exports to the United States. Since the SIP pathway was first proposed, the government of Canada has stated that it will not allow exports that could impact access to medications for Canadians. Health Canada issued a statement saying that “the Government of Canada is taking all necessary action to safeguard the drug supply and ensure Canadians have access to the prescription drugs they need” and added “bulk importation will not provide an effective solution to the problem of high drug prices in the U.S.”6
No Legal Pathway for Importation of Drugs for Employer Benefit Plans
Because neither of the 2 legal pathways defined by the FDA are currently importing drugs and importation of drugs for individual personal use does not apply to employer health benefit plans, how are drugs being imported into the United States for these employers?
When I directly asked these vendors or their clients about the legality of this importation, I received 3 disturbing messages: first, that it doesn’t matter if it is illegal—no one is prosecuting them and they are saving money; second, that they are importing from Tier 1 countries and thus the drugs are safe; and third, that they have been importing for a while and have not seen any reasons to be concerned about the safety of the drugs. None of these excuses justifies the risk that patients and employers take when drugs are imported into the United States under an employer health benefit plan.
Fallacy—No One Is Prosecuting for Drug Importation
The FDA does not look favorably on illegal drug importation when it discovers it. Some importers and their vendors claim to their clients that they believe they are using pathways appropriately by using pharmacy partners in Canada to fulfill US patient prescriptions.7 Often a Canadian pharmacist will reissue a Canadian prescription based upon a US prescription they have received. However, questions arise as to the legality of those transfers and the lack of actual communication with the treating physician or direct knowledge of the patients and their medical history.
Just because a drug is purported to come from a supposedly safe country does not mean that the medicine itself was manufactured or inspected for safety in that country.
In February 2019, the FDA sent a warning letter to CanaRx Services, Inc, for engaging in activities that caused the introduction of unapproved new drugs from foreign sources into the United States in violation of the FD&C Act.8 These products are new drugs because they are not generally recognized as safe and effective for their labeled uses. CanaRx was described as acting as a broker between foreign pharmacies and the employer-sponsored health insurance plan to provide enrolled employees with prescription drugs, including reissuing an employee’s US prescription under the direction of a foreign physician and then filling the drug from a pharmacy in that foreign physician’s jurisdiction. The foreign pharmacy directly shipped drugs to the employee. CanaRx used a disclaimer on each invoice that stated “depending on your country, our medications may appear to be different in size, shape, or color.” That demonstrated that CanaRx could be substituting the FDA-approved drugs prescribed by the US healthcare practitioner with unapproved drugs. As stated in the letter, “This distribution scheme is particularly concerning, as employees are likely inclined to trust that they will receive safe and effective drugs through their employer’s ‘insurance’ plan and may not question their legitimacy.”8
Some of the cancer drugs specifically identified in this FDA warning letter were Gilotrif, Gleevec, Inlyta, and Stivarga. The FDA identified approximately 165 websites affiliated with CanaRx, many of which included towns or locales that made them seem based in the United States, for example, www.schenectadymeds.com.8
The physician still holds medical liability for drugs prescribed for the patient, and no practice wants to think that its patients may be at risk of receiving unsafe drugs for serious medical conditions.
Fallacy—Importation From Tier 1 Countries Is Legal and Safe
Some vendors claim that importation is safe if it comes from countries designated as Tier 1 by the FD&C Act, including Australia, Canada, Israel, Japan, New Zealand Switzerland, South Africa, and countries in the European Union. Tier 1 countries regulate their pharmaceutical industry and have clear procedures for reporting and drug management. The Partnership for Safe Medicines, a group of organizations seeking to protect consumers from counterfeit or contraband medicines and represented by a majority of state pharmacy associations, warns that just because a drug is purported to come from a supposedly safe country does not mean that the medicine itself was manufactured or inspected for safety in that country.9 Medicines with an unknown or questionable provenance have been transshipped through countries without ever having been opened or evaluated. The Partnership for Safe Medicines also reminds consumers and employers that the FDA has warned that medicines bought over the internet from foreign sources may not be safe or effective.9
Drug Sourcing and Importation: Patients and Employers Do Not Know the Extent of the Risk
When a state announces that it is planning to import drugs, patients have a reasonable expectation that the state will take appropriate precautions to guarantee the safety of those drugs. When an employer offers drug importation to its insured employees, those employees have a reasonable expectation that the employer will not offer them a health benefit that is risky or could endanger their health. Yet, the fine print in some of the drug importation contracts I have seen places all the risk of the safety of an imported drug on the patients and their treating provider, stating that if patients should develop adverse symptoms while taking the imported drug, they should go to their treating physician for care.
Employers may not understand that the FDA generally maintains that importing prescription drugs into the United States by anyone other than the manufacturer or by states/Indian tribes under the SIP program is a violation of federal law. The FDA cannot adequately assure the public that imported drugs meet FDA standards or are the same products approved by the FDA. Therefore, plan sponsors that facilitate access to imported medications for group health plan enrollees have some risk of violating the law.
Whether the drug importation programs offered to employers for the purpose of getting drugs cheaper than through US channels are temporarily flying under the radar from notice by the FDA or are not fully compliant with the law, and especially not compliant with FDA requirements for importation (legal or not), employers are putting themselves and their employees at risk. The requirements for safety, effectiveness, accurate relabeling, screening, supply chain oversight, adverse event reporting, and testing for authenticity, stability, and compliance with specifications and standards under a legal SIP program are onerous. The costs of the infrastructure to support those requirements, if they are legally met, may well offset any cost reductions achieved by importation. Knowing that US patients are receiving drugs directly shipped to them from countries outside of the United States makes it very difficult to believe that those requirements are being met. By endorsing an importation program for group health plan enrollees, those plan sponsors, who hold a high fiduciary responsibility under the Consolidated Appropriations Act of 2021, are likely putting their standing under the Employee Retirement Income Security Act at risk, as well as creating health and safety risks for their employees (see October 2023 OPM editorial Massive CAA Shake-up Looming for Health Benefits, Empowering Patients).
Mandated Domestic Drug Sourcing (White and Brown Bagging) Is Equally Risky for Patients
Most physician practices and hospital systems will not accept drugs shipped from a pharmacy they do not consider part of their normal supply chain to either the practice (white bagging) or their patients (brown bagging). State laws prohibiting or restricting mandated domestic sourcing have been passed in Delaware, Florida, Georgia, Louisiana, New Mexico, North Dakota, Ohio, Texas, Utah, Vermont, and Virginia.10 When treating providers do not know the source of drugs shipped from an external pharmacy, they are justified in trying to protect their patients from the same risks that could apply with an imported drug. When physicians do not know where a drug is coming from, how it has been handled, where it was made, or if it has been properly inspected and protected, they should be able to refuse those drugs for their patients. If you wish to support legislation in your state to protect your patients against mandated domestic drug sourcing (white bagging or brown bagging), a good resource for suggested legislative language is the American Society of Health-System Pharmacists.
What Can Practices Do?
We need to connect the dots now. If we discover that patients are being affected by a mandated drug sourcing program, we need to stand up for them. Identifying white- or brown-bagging programs is easy, but learning whether patients are subject to a drug importation program through their employer benefit is not easy. When you look at the 165 or so names of drug source websites associated with CanaRx in the FDA Warning Letter, they look like normal US-based names. For the safety of their patients, practices may need to start investigating drug sources that their patients are being pushed to use. The physician still holds medical liability for drugs prescribed for the patient, and no practice wants to think that its patients may be at risk of receiving unsafe drugs for serious medical conditions.
Questions to consider:
- Have your insured, employed patients been told that their drug can be obtained for free or at sharply discounted rates through a specific vendor?
- Have patients been told to enroll with a specific vendor and provide an unfilled copy of their prescription and/or private health and financial information to them, including copies of identification cards and authorization for the vendor to represent them?
- Have your patients been told that their drugs will be shipped from outside the country or from a specific pharmacy working only with this vendor?
- Are you aware of the sources (websites) to which patients are directed or to which your practice is directed to work with a mandated specialty pharmacy? Do you maintain a list of questionable or suspicious sites?
When we see patients paying good money for premiums that are not delivering sufficient value for their needs or are putting them at risk for unsafe drugs, we need to track, aggregate, and engage. We can use this information to approach employers with problematic coverage and offer them support and guidance.
Many employers may not yet be aware of the implications of these programs on their vulnerable employees or the risks to which they are being exposed as employers.
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References
- US Food and Drug Administration. Human drug imports. Updated September 21, 2023. www.fda.gov/drugs/guidance-compliance-regulatory-information/human-drug-imports
- US Food and Drug Administration. Personal importation. Updated December 7, 2023. www.fda.gov/industry/import-basics/personal-importation#UScitizen
- US Food and Drug Administration. Importation of Certain FDA-Approved Human Prescription Drugs, Including Biological Products, and Combination Products under Section 801(d)(1)(B) of the Federal Food, Drug, and Cosmetic Act. Guidance for Industry. September 2020. www.fda.gov/media/133646/download?attachment
- US Food and Drug Administration. Importation program under Section 804 of the FD&C Act. Updated January 5, 2024. www.fda.gov/about-fda/reports/importation-program-under-section-804-fdc-act
- Sklamberg H, Scandalios TM. FDA authorizes Florida’s plan under FD&C Act Section 804 to import prescription drugs from Canada. Arnold & Porter Advisory. January 8, 2024. www.arnoldporter.com/en/perspectives/advisories/2024/01/fda-authorizes-florida-plan-to-import-prescription-drugs-from-canada
- Health Canada. Statement from Health Canada on FDA decision on Florida bulk drug importation. Accessed June 24, 2024. www.canada.ca/en/health-canada/news/2024/01/statement-from-health-canada-on-fda-decision-on-florida-bulk-drug-importation-plan.html
- Young S. How some US employers are already accessing drugs imported from Canada. Healthcare Brew. January 11, 2024. www.healthcare-brew.com/stories/2024/01/11/how-some-us-employers-are-already-accessing-drugs-imported-from-canada
- US Food and Drug Administration. Warning Letter. CanaRx Services Inc, MARCS-CMS 554740. February 26, 2019. www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/canarx-services-inc-554740-02262019
- Are Tier One countries safe to import medicine from? The Partnership for Safe Medicines. Accessed May 15, 2024. www.safemedicines.org/are-tier-one-countries-safe-to-import-medicine-from
- State law chart: brown & white bagging. AHIP. Updated January 11, 2024. https://ahiporg-production.s3.amazonaws.com/documents/AHIP-BW-Bagging-State-Law-Chart-1-11-24.pdf