Authors analyzed Section 804 of the Food, Drug, and Cosmetic Act (FDCA) allowing state-sponsored programs to bring Canadian drugs onto US soil.
The importation of prescription drugs from Canada into the United States weakens the pharmaceutical supply chain and poses increased risks to the safety of patients receiving these medications, according to an article published in the AMA Journal of Ethics.1
The Section 804 Importation Program (SIP) under the Food, Drug, and Cosmetic Act (FDCA), enacted in 2003, was designed to allow Canadian drug importation through FDA approval. The aim of SIPs was to “achieve a significant reduction in the cost of covered products to the American consumer with no additional risk to the public’s health and safety,” wrote the authors.1
As a direct response to rising prescription drug costs in the US well before his election, President Biden “pledged to address the ever-escalating US prescription drug costs and to do so through the importation of more affordable Canadian counterparts,” wrote Adashi et al.2
But with the increased risk of counterfeit drugs entering the pharmaceutical market, ongoing drug shortages in Canada, and steep cost demands to facilitate SIPs, many experts interpret Canadian drug importation as much more costly than beneficial.
The Section 804 Importation Program (SIP) under the FDCA, enacted in 2003, was designed to allow Canadian drug importation through FDA approval. | image credit:
As of now, 9 states—Vermont, Colorado, Florida, Maine, New Hampshire, New Mexico, North Dakota, Texas, and Wisconsin—have enacted drug importation laws, with 6 awaiting FDA approval. Florida has since been the only state to receive approval.1
And it might be easy to understand why so few states have successfully implemented SIPs.
“Designing a state-operated program that can guarantee adherence to FDA standards regarding authenticity, purity, potency, and lack of adulteration while still achieving cost savings for consumers is a challenge. Despite its intent to reduce drug costs without compromising public safety, [Canadian drug importation] has aroused concerns about potential risks to public health that have been repeatedly emphasized by the FDA and public health leaders from both political parties,” wrote the authors.1
Several people argue that savings from Canadian drug importation are offset by the steep costs of running an SIP.
“The idea of accessing cheaper drugs from Canada might seem straightforward, but the actual importation process incurs additional costs such as packaging, testing, shipping, and compensation for intermediaries, which ultimately add to the price,” wrote the authors.1
Starting as a basis for drug importation in the US, Section 804 of the FDCA specifically states that importation must come from Canada alone and no other industrialized country. But even since its inception in the early 2000s, the drug importation rule has failed to break through the US pharmaceutical industry because of several imposed public health risks.
READ MORE: Florida Drug Importation Program Faces Nationwide Opposition From Pharmacy Organizations
One condition of the drug importation rule has placed the duty of monitoring counterfeit drugs in the hands of US law enforcement, much to their dismay.
“US law enforcement has already come out in opposition to drug importation, highlighting that the influx of drugs from other countries would only shift costs and burden to law enforcement while simultaneously increasing the risk of illegitimate products entering the country,” wrote the authors.1
At the inception of Section 804 of the FDCA, counterfeit drug distribution became a leading concern in the pharmaceutical supply chain. While the rule only allows drug importation from Canada to the US, officials are concerned about where the Canadian drugs are coming from because of a practice referred to as “transshipment.”
“Canadian law permits the ‘transshipment’ of drugs from many countries, including from those with lower regulatory standards. These countries might not have a Mutual Recognition Agreement with Canada to ensure reliance on its regulatory system for prescription medicines,” the authors said.1
Canada has recently experienced severe nationwide drug shortages. In 2019, about 33% of all medications were affected by shortages, and in 2022, the country experienced shortages for 2700 drugs.1 With pharmaceutical supply chain issues at home, it is no surprise that Canada is passing off regulatory duties to the US.
Secondly, the drug importation rule is leading patients in the US to seek out Canadian prescription drugs from the internet, further reinforcing the risks posed by counterfeit drugs.
“The IQVIA Institute for Human Data Science estimated that 12.6% of adverse events from 2017 to 2022 could have been avoided had all drugs purchased from illegal online pharmacies instead been purchased legally. These adverse events contributed an additional $67 billion in costs to the US health system and resulted in an estimated loss of $34 billion for legitimate pharmaceutical businesses in 2022,” the authors wrote.1
Despite US law enforcement’s ability to monitor and track online pharmacies, they only have jurisdiction over those conducted within US borders.
During a time of increasing drug prices around the country, on the surface, Canadian drug importation seems like a simple way of combating rising costs. But as the authors of these studies tell us, the costs and risks simply outweigh the benefits.
“An importation program from Canada is not a sustainable recipe for capping the homegrown prescription drug costs…Four former FDA commissioners said it best when they urged ‘Congress and the many others concerned about the cost of drugs to deal directly with the issues driving the cost of medicines and not to place false hope in measures that will place patients who need treatment at risk and jeopardize public health,’” concluded the authors.2
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