Introduction

On January 5, 2024, the U.S. Food and Drug Administration ("FDA") approved Florida's Section 804 Importation Program ("SIP"), pursuant to FDA's authority under Section 804 of the Federal Food, Drug, and Cosmetic Act ("FDCA") and the final importation rule the agency promulgated in September 2020 (the "Final Rule"). The approval of Florida's SIP marks the first time that the FDA has approved a program that would enable the importation of Canadian prescription drugs under Section 804.1 The state of Florida is, therefore, closer to implementing a Canadian drug importation program than any state has been before, although there are a series of hurdles yet to surmount before drug importation would commence, including requisite buy-in from the Canadian government.2 In this article, we summarize the remaining steps that will need to be completed before importation can begin under the Florida SIP, the likelihood of renewed litigation challenging both the Final Rule as well as FDA's determination that the Florida SIP meets the requirements of Section 804, and the larger legal, policy and market-based implications of Florida's authorized importation program, assuming importation does indeed begin.

Background

Section 804 of the FDCA (21 U.S.C. § 384), enacted in its current form in 2003, requires the U.S. Department of Health and Human Services ("HHS") Secretary to certify to Congress that drug importation will result in both "no additional risk to the public's health and safety" and "significant cost savings" to the American people in order for statutorily permitted importation to take effect.3 For 17 years, no HHS Secretary was willing to make that certification. However, on September 24, 2020, HHS released the Final Rule, which enables states and Indian tribes to develop and seek FDA approval of programs that facilitate the importation of certain prescription drugs from Canada.4 This rulemaking reflected the culmination of efforts by the Trump administration to produce an importation program as detailed in the Safe Importation Action Plan unveiled in July 2019.5 As discussed in a prior Ropes & Gray alert, the Final Rule raised various legal questions, including questions regarding whether the agency could make the statutorily required showing that the rule would result in significant cost savings, when the agency itself admitted that it could not estimate the amount of any cost savings. As we anticipated, the Final Rule was quickly challenged by three associations, Pharmaceutical Research and Manufacturers of America, the Partnership for Safe Medicines, and the Council for Affordable Health Coverage, although the case was ultimately dismissed by the U.S. District Court for the District of Columbia in February 2023 for lack of standing.6 In dismissing the case, the court said that the plaintiffs could not demonstrate a concrete risk of harm at a time when no state importation program had yet been approved.7 FDA's recent authorization of Florida's importation program fundamentally changes the status of state drug importation programs in this regard. In its Letter of Authorization dated January 5, 2024, FDA determined that Florida's SIP Proposal met the statutory obligation of ensuring that importation would reduce consumer costs without posing additional risk to public health and safety.8 Several other states have submitted similar proposals but those have yet to be approved. The approval of Florida's SIP Proposal provides one benchmark of a proposal that the agency viewed as meeting the requisite criteria.9

The Final Rule Provisions on Importation

While FDA has long taken the position that foreign market versions of FDA-approved drugs cannot be distributed in the United States, the Final Rule provides a pathway for importation of "eligible prescription drugs" through an authorized SIP.10 Eligible prescription drugs are those that have been approved and have received a Notice of Compliance and Drug Identification Number ("DIN") from the Health Products and Food Branch of Health Canada ("HPFB") and, but for their labeling, meet the conditions in an FDA-approved new drug application ("NDA") or abbreviated new drug application ("ANDA") for a currently marketed prescription drug, including requirements relating to the "drug substance, drug product, production process, quality controls, equipment and facilities," and that are not otherwise excluded from the definition under the Final Rule.11 The Final Rule explicitly excludes the following categories of prescription drugs from eligibility for import under an authorized SIP:12

  • controlled substances, as defined by 21 U.S.C. § 802.
  • biological products, as defined by 42 U.S.C. § 262(i)(1).
  • drugs that are infused, intravenously injected, inhaled during surgery, or injected intrathecally or intraocularly.
  • drugs subject to a risk evaluation and mitigation strategy ("REMS") under 21 U.S.C. § 355-1.
  • drugs that are not prescription drugs in a finished dosage form that meet the definition of a "product" under 21 U.S.C. § 360eee(13).

A state or Indian Tribe that wishes to serve as a SIP Sponsor and thereby import eligible prescription drugs under the Final Rule must submit a proposal for its importation program to FDA for authorization.13 The proposal must include all of the information laid out in the Final Rule, including a description of how the SIP Sponsor will ensure that (1) the imported eligible drugs meet the Statutory Testing requirements (described further below), (2) the supply chain will be secure, (3) the applicable labeling requirements will be met, (4) pharmacovigilance and other FDCA requirements will be met following importation, and (5) the SIP will result in a significant reduction in the cost to the American consumer of the eligible prescription drugs that the SIP Sponsor seeks to import.14 Authorized SIPs are valid for two years unless an extension is granted.15

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Footnotes

1. Letter of Authorization for Florida's Section 804 Importation Program, U.S. FOOD & DRUG ADMIN. (Jan. 5, 2024), https://www.fda.gov/media/175237/download?attachment.

2. On November 27, 2020, the Canadian Minister of Health put out an interim order, intending to address and curtail an impending risk to public health and safety of a drug shortage. The order prohibits a person from distributing drugs for use outside of Canada unless that person has "reasonable grounds" to believe that the distribution of the drug will not cause or worsen a shortage of a drug. Interim Order Respecting Drug Shortages (Safeguarding the Drug Supply), HEALTH CANADA (Nov. 27, 2020) https://www.canada.ca/en/health-canada/services/drugs-health-products/compliance-enforcement/importation-exportation/interimorder-drug-shortages-protecting-supply.html.

3. Pub. L. 108-173 (2003).

4. 85 Fed. Reg. 62094 (Oct. 1, 2020), available at https://www.federalregister.gov/documents/2020/10/01/2020-21522/importation-ofprescription-drugs.

5. Safe Importation Action Plan, U.S. FOOD & DRUG ADMIN., available at https://www.hhs.gov/sites/default/files/safe-importationaction-plan.pdf. The plan references two "pathways" to provide lower-cost drugs to the U.S. public. Pathway 1 involves a Notice of Proposed Rulemaking that would rely on Section 804 to authorize programs to allow importation of Canadian drugs. Pathway 2 would allow manufacturers to import versions of FDA-approved drug products that they sell in foreign countries that are the same as the U.S. versions.

6. Pharmaceutical Research & Manufacturers of America et al. v. Dept. of Health & Human Svcs., Complaint, Docket number 1:20- cv-03402, (D.D.C. Nov. 23, 2020), https://phrma.org/-/media/Project/PhRMA/PhRMA-Org/PhRMA-Org/PDF/P-R/PhRMACommercial-Importation-Complaint.pdf; Pharmaceutical Research & Manufacturers of America et al. v. Dept. of Health & Human Svcs., Memorandum Opinion, Docket number 1:20-cv-03402, (D.D.C. Feb. 6, 2023).

7. PhRMA et al. v. HHS Memorandum Opinion, supra note 6.

8. Letter of Authorization, supra note 1.

9. At the time of publication, Maine and New Mexico are awaiting response from FDA on their proposals, which were submitted in 2020. See Application to Operate a Section 804 Prescription Drug Importation Program, Maine Department of Health and Human Services (May 1, 2020), available at https://www1.maine.gov/dhhs/sites/maine.gov.dhhs/files/inlinefiles/Maine%20Section%20804%20Importation%20Program%20Application_0.pdf; Section 804 Drug Importation Program Application, New Mexico Department of Health, available at https://www.nmhealth.org/publication/view/meeting/6418/. FDA rejected New Hampshire's SIP proposal because it failed to identify the foreign seller in Canada that would buy the eligible prescription drug that would ultimately be imported from the relevant manufacturer as required by the Final Rule. See Letter, State of New Hampshire Department of Health and Human Services Section 804 Importation Program Proposal, U.S. Food & Drug Admin. (Nov. 16, 2022), https://khn.org/wp-content/uploads/sites/2/2022/12/New-Hampshire-Denial-Letter.pdf. FDA requested more information about Colorado's proposal, and the state indicated it would submit a revised proposal in early 2024 that would include a new cost savings analysis and a significant update to the program's compliance plan. The plan was submitted on February 27, 2024 and identifies 24 drugs and dosages. Colorado's Drug Importation Program, Annual Report to the Colorado General Assembly, Colorado Department of Health Care Policy & Financing (Dec. 1, 2023) https://hcpf.colorado.gov/sites/hcpf/files/HCPF%20Drug%20Importation%20Annual%20Report%202023.pdf; Saving People Money on Healthcare: Polis-Primavera Administration Submits Updated Canadian Drug Importation Plan to the FDA, Colorado Department of Health Care Policy & Financing (Feb. 27, 2024), https://hcpf.colorado.gov/press-release/updated-canadian-importation-plan.

10. See, e.g., In re Canadian Imp. Antitrust Litig., 470 F.3d 785, 790 (8th Cir. 2006) ("Because foreign labeling differs from domestic labeling, approval granted to a particular manufacturer for a particular product to be distributed in the United States does not constitute approval of another drug - even one with the same chemical composition - to be distributed in Canada with different labeling, and then imported into the United States.").

11. 21 C.F.R. § 251.2.

12. Id.

13. Id. § 251.

14. Id. § 251.3(d)(11).

15. 85 Fed. Reg. at 62132; 21 C.F.R. § 251.6. FDA may also specify a shorter period of time in the authorization of the SIP.

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