Importation of Prescription Drugs Provisions in P.L. 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003

Publication Date: March 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health; Trade

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Abstract:

The new Medicare legislation, the Medicare Prescription Drug, Improvement, and Modernization Act (P.L. 108-173), addresses the importation of prescription drugs for all U .S. consumers, not just for Medicare-eligible individuals. These provisions are rooted in consumer and congressional concern with the high cost of prescription drugs in the United States. International comparisons of drug prices have confirmed that American consumers, particularly the elderly and uninsured, often pay more for prescription drugs than do citizens in other countries. The importation of lower-priced prescription drugs is one strategy to reduce U.S. consumer spending.

The new Act, despite being structured as a replacement to the importation provisions in the Medicine Equity and Drug Safety (MEDS) Act of 2000, does not effectively change U.S. prescription drug importation policy. The details it adds will not be implemented unless the Secretary of Health and Human Services (hereafter referred to as the Secretary) certifies to Congress that such imports do not threaten the health and safety of the American public and do provide cost savings. That certification requirement, continued from prior law, has effectively halted implementation of existing import provisions because no Secretary has been willing to provide the required certification.

The Act changes the law in four basic ways: it (1) directs the Secretary to allow imports from Canada only (the MEDS Act had allowed imports from a specific list of industrialized countries, including Canada); (2) includes a shift in approach to the importation of prescription drugs by individuals, by codifying the discretion in enforcement that the Food and Drug Administration (FDA) has exercised to allow the "personal use" imports of prescription drugs; (3) eliminates the prohibition against a manufacturer's entering into agreements to prevent the sale or distribution of imported products; and (4) includes a mechanism, based on evidence, by which the Secretary can terminate the import program.


Following enactment of the Medicare bill in December 2003, some Members of Congress have moved to amend the importation of prescription drugs provisions. Some states and localities have set up websites to facilitate individuals' purchase of prescription drugs from Canadian pharmacies. FDA has responded. In letters to state officials, FDA has warned that states could face tort liability suits and charges of assisting in criminal activity if citizens suffer injury from these drugs. FDA, via the Department of Justice, has gone to the courts to stop the Canadian and U.S. distributors of drugs imported from Canada.