Importing
and Re-Importing Prescription Drugs
What
NEA Members and State Affiliates Need to Know
National Education Association
NEA Member Benefits Corporation
June 2003
Introduction
In recent months, Canadian prescription drug distributors
and pharmacies have contacted a number of NEA state affiliates.
The companies have asked the affiliates to recommend their
prescription drug dispensing services to NEA active and
retired members. This paper reviews certain issues associated
with purchasing prescription drugs that are manufactured
outside the United States and prescription drugs manufactured
inside the U.S. and re-imported through a foreign country.
Despite the fact that importation and re-importation of
prescription drugs offers considerable cost savings to consumers,
NEA affiliates and individual members should be wary of
using such channels. The U.S. Food and Drug Administration
has recently begun to enforce laws prohibiting the distribution
of imported and re-imported drugs.1
Importation and Re-Importation Concerns
for NEA Members and Affiliates
An increasing number of U.S. residents have been buying
prescription drugs from Canada. In recent years, the number
of distribution sources has increased as well. Because the
Canadian government maintains price controls for prescription
drugs and there has been a favorable exchange rate, Americans
can save between 20% and 80% of the cost of prescription
drugs by purchasing them in Canada or through Canadian suppliers.
U.S. residents bought about $1 billion (Canadian dollars)
in prescription medications from Canadian pharmacies in
2002
.
On February 12, 2003, William Hubbard, the Associate Commissioner
for Policy and Planning at the U.S. Food and Drug Administration
(FDA), issued a letter which stated that it is illegal for
third parties to assist U.S. residents in obtaining drugs
from abroad. The letter was in response to an inquiry from
an attorney for health plans in Louisiana. The letter to
the health plans said that third parties, such as health
insurers or claims processors that help facilitate the purchase
of prescription drugs from Canada, could face civil and
criminal charges under the federal Food, Drug and Cosmetics
Act (FD&C). The federal government had not previously
enforced the FD&C Act with regard to prescription drug
importation and re-importation.
While the FD&C Act does not appear to be directed at
consumers, NEA affiliates and members should understand
the implications of the FDA's recent directive. One of the
purposes of the FD&C Act is to set up a regulatory framework
to protect American consumers from poor-quality manufacturing
or shipping of prescription drugs. This framework necessitates
that the vendors of prescription drugs and the sponsors
of health plans that provide prescription drugs take some
responsibility for the safety of consumers. The FDA's recent
directives are an attempt to enforce this framework.
As a practical matter, it is unlikely that an employee's
health plan or an NEA local or state affiliate endorsing
drugs that retail through an importation channel could ensure
that all of the applicable legal requirements are met. And,
it is possible that civil and criminal liability could exist
for entities that fail to comply with the FD&C Act.
Response to Enforcement of the FD&C
Act
While NEA members and affiliates are cautioned that importation
or re-importation drugs is currently suspect, and may well
be technically illegal, there is considerable interest in
Congress and by some state governments in broadening the
availability of safe and inexpensive importation channels.
The following background information on
the response to the FDA's recent enforcement efforts may
be useful in understanding the current debate.
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Response
of Some Health Plans
Prior to the February 2003 letter, the FDA had been
hesitant to interfere or stop citizens from obtaining
necessary medications at a less expensive cost in
Canada. In fact, UnitedHealth, the largest commercial
health insurer in the United States, has been reimbursing
members for drugs purchased in Canada. However, Blue
Cross and Blue Shield of North Dakota announced that
they would no longer reimburse plan members for drugs
purchased in Canada.
In a somewhat surprising turn on May 23, 2003, FDA
Commissioner Mark McClellan told a U.S. Senate Committee
that the February 2003 letter was not intended to
prohibit coverage of prescription drugs plan members
purchase from Canada for their personal use. When
questioned by Sen. Byron Dorgan (D-ND) specifically
about the BCBS issue McClellan said, "I don't
think that there is anything in our letter that expressly
and in general prohibits BCBS of North Dakota from
covering a prescription that one of their members
may have purchased in Canada on a personal use basis"
(Fargo Forum, 5/23).
How BCBS of North Dakota or other health plans respond
at this point remains to be seen.
FDA's First Warning Letter
Since the February 2003 letter was released, the FDA
issued its first warning letter to an Oklahoma-based
storefront pharmacy (Rx Depot) in March 2003. Rx Depot
operates 12 storefronts in Arkansas, California, Colorado,
Florida, Oklahoma and Texas. The FDA told the company
that it is violating federal drug importation laws
and is falsely claiming on its web site that the FDA
approved its prescription drugs. Rx Depot is challenging
the FDA in court. RxDepot's President Carl Moore notes
that RxDepot's customers are shipped drugs from a
licensed Canadian pharmacy in the same packages in
which the U.S. manufacturers sell them, eliminating
safety concerns.
Patient Advocacy Groups Respond
Many advocates for the elderly, the uninsured and
others without adequate prescription drug coverage
say recent action by the pharmaceutical industry as
well as the FDA is intended to "choke off "
the supply of re-imported drugs before it hurts drug
maker's profits. In response to a survey sponsored
by the National Association Chain Drug Stores (NACDS),
senior groups such as the Minnesota Senior Federation
Metropolitan Region (MSFMR), which re-imports drugs
from Canada, say that the NACDS is trying to scare
people into prices that are twice as high in the States.
According to MSFMR, the issue should be whether the
person is buying from a regulated and licensed pharmacy
in Canada.
U.S. Congress and the Department of Health and
Human Services (HHS) Activities
Houses of Congress have, on at least two occasions,
passed bills that would make it legal for people to
re-import U.S.-made drugs from Canada. However, HHS
has countered consistently that the medicine's safety
could not be guaranteed - effectively blocking enactment.
Congressional interest in re-importation continues.
The House Government Reform Subcommittee on Human
Rights and Wellness held a hearing in April 2003 where
several subcommittee members said the FDA should find
a way to allow safe importation of drugs from Canada.
Senator Debbie Stabenow (D-MI) recently issued a statement
that the FDA "is going in exactly the wrong direction,"
and that the agency should instead "be working
to open the border to Canada in a safe way."
Reaction of Certain States
States have entered the fray as well. The Florida
Department of Health recently visited two Florida-based
stores, Discount Drugs of Canada, and threatened to
close them. Another of the store's chains in New York
has also been warned that criminal charges could be
filed against it.
In Rhode Island, however, lawmakers proposed a measure
earlier this year that would make it legal for Canadian
pharmacies to export prescription drugs to their state.
Canadian Government's Response
In early May 2003, Canadian health ministry officials
posted an official document clarifying that they will
take full responsibility to ensure the safety and
quality of prescription drugs exported to the United
States. The policy clarification, reached after numerous
discussions with the FDA, stipulated that all medications
that Canada imports must be safe and effective, regardless
of whether sold domestically or exported. The statement,
in effect, clarified safety standards for U.S. residents
who purchase medications from Canadian web sites or
storefronts. Canadian health officials say that all
drugs that enter their country must meet all of the
same regulations that U.S. law imposes.
In
late May 2003, the FDA clarified that the Canadian
statement issued earlier did not expand Canadian oversight
of the millions of prescriptions being re-imported
into the U.S. Furthermore, Canadian officials went
on record in late May confirming that while it regulates
all drugs imported into their country-whether for
internal consumption or export-they cannot vouch for
the safety of medications exported back to the States.
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Internet Drug Sales - Safety Concerns
for Members
Internet sites that provide prescription drugs by having
consumers fill out a questionnaire rather than seeing a
doctor can pose serious health risks. A questionnaire generally
does not provide sufficient information for a healthcare
professional to determine if that drug is appropriate or
safe to use, if another treatment is more appropriate, or
if the consumer has an underlying medical condition where
using that drug may be harmful. Finally, it must be noted
that in the case of foreign-based websites, if consumers
have an adverse drug reaction or any other problem, they
have little or no recourse because the physical location
or operator of the "pharmacy" often is not known
or the seller is beyond the consumers' reach. The FDA indicates
it has no ability to take effective action against foreign
operators on behalf of U.S. citizens.
Some websites based outside the U.S. offer to dispense prescription
drugs without a prescription by a licensed practitioner
or a physical examination, bypassing the traditional doctor-patient
relationship. As a result, patients may receive inappropriate
medications due to misdiagnoses, they may fail to receive
appropriate medications or other medical care, or they may
take a product that could be harmful, or fatal, if taken
in combination with other medicines they might be taking.
A number of Canadian drug websites and U.S. ordering services
indicate that the Canadian drugs are dispensed pursuant
to existing prescriptions that are rewritten by a Canadian
doctor in order to comply with Canadian law. However, the
dispensing of medication on a prescription written by a
physician who has not seen the patient or conducted a physical
exam is generally contrary to any state's medical practice
standards. Additionally, Dr. Henry Haddad of the Canadian
Medical Association has said that under the Canadian Code
of Ethics, physicians have a responsibility to do a history,
physical exam and discuss the risks and benefits of the
medication with the patient.
Summary and Conclusion
Importation and re-importation of prescription drugs will
remain a subject of substantial controversy as long as Americans
rely on prescription drug therapies to treat medical conditions,
and there exists a substantial price differential between
the cost of comparable products in the U.S. and abroad (particularly
Canada).
In the current regulatory environment, NEA affiliates and
members are discouraged from using drug distribution channels,
(e.g., health plans or direct-to-consumer websites) which
rely on imported or re-imported prescription drugs. NEA
encourages members and affiliates to support public policy
that would ensure that importers and wholesalers are not
shipping counterfeit medication, and that makes it possible
for the FDA to better monitor how drugs are stored and transported
so that these lower-cost medications can be made available
safely to American consumers.
NEA and NEA Member Benefits will continue to monitor prescription
drug distribution issues on behalf of members and affiliates.
1Information
for this paper was obtained from public reports contained
at the U.S. Food and Drug Administration's (FDA) Internet
site (www.fda.gov) and other sources (noted in the paper).
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