Prescription drug importing is when prescription medications are transported into one country from another. One of the main reasons prescription drug importing sparks patients’ interest is the potential for savings. According to a study by the RAND Corporation, for all prescription drugs, U.S. drug prices were 256 percent of the prices in other countries.¹ Drug importing may allow patients to find prescription drugs at a lower price. Some state and federal policymakers also believe importing prescription drugs could increase price competition and improve the functionality of the U.S. market. However, the risks and challenges of drug importation could outweigh the potential benefits.
Potential Risks and Challenges
Manufacturing Standards in Each Country Can Vary
The U.S. Food and Drug Administration (FDA) does not evaluate drugs purchased outside of the U.S. for safety or effectiveness. There may be changes to the ingredients, quality, or handling standards established by the FDA. According to the FDA, it is difficult to identify and stop the production of counterfeit drugs. Imported prescription drugs could contain dangerous substances as well as addictive substances.
The Lack of Medical Evaluation and Supervision
Imported prescription drugs could have unexpected or life-threatening side effects. Medical supervision is necessary to ensure the medication is appropriate for patients and their condition. The language barrier can also be dangerous. If the medication’s labeling is in a different language, instructions and possible side effects may not be clear. ²
There has been an uptick of pharmacy impersonators. Impersonators disguise themselves as Canadian pharmacies and are looking to cash in on those considering international prescription drug sourcing.
Stop Loss Vendor Reimbursement
Considering the above risks, stop loss vendors may not reimburse for prescriptions outside of the U.S. Therefore, employers could face financial risks.
Savings May Not Be Significant
For patients, finding cheaper prescription medications online can happen from U.S. pharmacies and international pharmacies. In this dynamic market, these situations are drug specific, can be timing specific, and may not be the lowest cost for the payor, depending on discount and rebate dynamics. To date, we have not seen an international sourcing program add up to substantial savings for employers.
U.S. Drug Importation Pathways
According to a report by the Congressional Research Service (CRS), current U.S. laws state the importation of unapproved new drugs, including foreign-made versions of FDA-approved drugs, is generally prohibited, but there are exceptions. An exception is made when medically necessary drugs are in short supply domestically. The FDA can temporarily import and distribute unapproved drugs until there is no longer a shortage. Additionally, an exception is made on a case-by-case basis if personal importation is necessary for a drug that is not commercially available in the U.S. for a serious medical condition. The FDA has generally allowed for a 90-day supply of the unapproved drug.
There are also two drug importation pathway proposals from the U.S. Department of Health and Human Services (HHS) and the FDA. The first pathway is a state importation program (SIPs). In 2020, a rule was finalized that permits states and tribal entities to submit a proposal to the FDA to allow for the importation of certain prescription drugs from Canada. This proposal must state the purpose of the importation is to reduce the cost of covered products and that it poses no additional risk to public health and safety. If approved by the FDA, the imported drugs would need to go through an extensive safety and effectiveness process. Several states have passed laws establishing SIPs programs in accordance with this rule, but the FDA has yet to authorize any program.
The second drug importation pathway applies to drug manufacturers, offering the option to import drugs to U.S. consumers that may provide lower-cost alternatives. Unlike the first pathway, it applies to small molecule drugs and biologics and is not limited to sourcing from Canada. The CRS states drug manufacturers have yet to display their interest in importing drugs intended for markets outside of the U.S.
There have been proposed expansions to these pathways, but no additional rules have been implemented. Some stakeholders have expressed support, while former FDA Commissioners, HHS Secretaries, and those in the pharmaceutical industry have opposed drug importing due to safety concerns. The CRS believes countries outside of the U.S. could be reluctant to support U.S. importation policies citing it could affect their domestic supply chain of prescription drugs. The Canadian government has expressed concerns about drug supply shortages. In 2020, they announced certain drugs intended for the Canadian market may not be sold outside of Canada if the sale would cause or worsen drug shortages.³
Prescription drug importation is not as straightforward as it sounds. There are many barriers to jump for it to be a long-term solution for the price of prescription drugs. If you are considering prescription drug importation, please evaluate the potential pros and cons. For a recap of the potential risks of international prescription drug sourcing, please watch our short video.
Our expert team at National CooperativeRx can help review perceived savings, advise you, and identify a more viable solution for your pharmacy benefit needs. Please reach out to your National CooperativeRx contact for more information or contact us here.
1. Mulcahy, A., Whaley, C., Tebeka, M., Schwam, D., Edenfield, N., & Becerra-Ornelas, A. (2021). (rep.). International Prescription Drug Price Comparisons. RAND Corporation. Retrieved January 26, 2023, from https://www.rand.org/content/dam/rand/pubs/research_reports/RR2900/RR2956/RAND_RR2956.pdf.
2. Center for Drug Evaluation and Research. (n.d.). Imported Drugs Raise Safety Concerns. U.S. Food and Drug Administration. Retrieved January 26, 2023, from https://www.fda.gov/drugs/information-consumers-and-patients-drugs/imported-drugs-raise-safety-concerns
3. Prescription Drug Importation. Congressional Research Service. (2022, December 8). Retrieved January 26, 2023, from https://crsreports.congress.gov/product/pdf/IF/IF11056#:~:text=FDA%20has%20generally%20allowed%20individuals,the%20drug%20to%20U.S.%20residents