Cross Border Sales of Prescription Drugs

April 26, 2019

The sale of Canadian prescription drugs to US citizens continues to garner attention from the FDA, US Senators, the media and American patients. In the last couple of years we have seen a number of U.S. Bills introduced to support the importation of pharmaceuticals from Canada. Last year, eight states introduced legislation for wholesale drug importation and Vermont became the first state to pass a bill allowing importation from Canada. (1) A forum of nonpartisan policymakers in the US called, the National Academy for State Health Policy (NASHP), helps states move through the necessary steps to implement such a program through an easy-to-follow pictorial website that recommends contracts with fully-licensed and regulated suppliers in Canada, a state-licensed distributor to handle the importation and assurance for regular drug testing. (2)

The only glitch remains approval from the US Secretary of Health and Human Services (HSS). While Alex Azar, the HHS Secretary, has not approved Vermont’s request, he has asked the FDA to establish a working group to investigate how to guarantee the safe importation of drugs from other countries and avoid counterfeit products from entering the supply. However, this importation would only apply to single source drugs unprotected by patents. (3)

In addition to state attempts to bring in Canadian supply, a company called CanaRx, in operation since 2004, has been arranging drug purchases for an estimated 500 cities, counties, school districts and private employers in the United States. Operating out of Windsor Ontario, CanaRx acts as a broker between pharmacies in Canada, Australia and Great Britain and US employer-sponsored health insurance plans. They facilitate the whole process from reissuing the US prescription by a foreign physician, filling the script and then shipping the drugs directly to the employee in United States. While the FDA has sent the company a warning letter to immediately cease their activities as well as a public warning to Americans, it appears as though many current customers (municipalities) have no concerns with CanaRx and plan to continue using them. (4)

Aside from US Bills trying to legalize the process, and companies like CanadRx, brokering the supply, individual internet pharmacies remain a constant threat to cross border sales, taking precious Canadian supply out of the country.

The FDA does have the Personal Importation Policy (PIP), to address circumstances where a US citizen requires treatment with an unapproved drug that is not available in the US. The PIP provides very strict guidelines for allowing importation for personal use (e.g. a serious medical condition for which there is no effective treatment domestically available). However, the above stated activities do not pertain to these PIP guidelines.

It is quite likely the flow of product into the US will intensify if the PMPRB amendments result in lower drug prices for Canada. The greater differential in price between our two countries will only strengthen the appetite of private companies, government and US citizens to import from Canada – whether illegal or not. If you have an oral drug product that has not been genericized in the US, do you know whether supply has been slipping through the border? A typical list of unusual purchase reports may catch larger abnormal purchasing patterns but may not reveal small blips from specific pharmacies.

For more information on how Cross Border Sales of Prescription Drugs, please contact Ben Parry or Marla Weingarten.

Footnotes

  1. Twenty-Eight States Passed 45 Bills to Curb Rising Rx Drug Costs in the Short 2018 Legislative Session
  2. Is It Safe and Cost-Effective to Import Drugs from Canada?
  3. HHS Secretary Azar Directs FDA to Establish Working Group on Drug Importation to Address Price Spikes
  4. U.S. Cities Skeptical Of FDA Warnings Against Medicine Imports From Canadian Firm