Importing Prescription Drugs: Objectives, Options, and Outlook

Publication Date: December 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health; Trade

Type:

Abstract:

Can purchases from abroad lower the cost of prescription drugs to U.S. consumers? Current law allows pharmacists and wholesalers to import prescription drugs from Canada commercially, and codifies the Food and Drug Administration's (FDA) current practice of allowing imports of prescription drugs by individuals under certain defined circumstances. There is, however, one proviso. The Secretary of Health and Human Services (HHS) must first certify that the drugs to be imported under the program would "pose no additional risk to the public's health and safety; and result in a significant reduction in the cost of covered products to the American consumer" -- a step no Secretary has been willing to take.

FDA has argued that with the likely exponential increase in imports -- right now it tolerates some imports for personal use -- it is impossible to monitor and guarantee that these drugs would be safe. Meanwhile, some states and municipalities, looking at ways to control their expenditures for prescription drugs, have created websites to direct U.S. consumers to Canadian sources; and several state Governors have proposed pilot import programs.

This issue is addressed in elements of three pairs of pending bills: S. 109 (introduced by Senator Vitter) and H.R. 328 (introduced by Representative Gutknecht); S. 184 (introduced by Senator Gregg) and H.R. 753 (introduced by Representative Bradley); and S. 334 (introduced by Senator Dorgan) and H.R. 700 (introduced by Representative Emerson). All would allow commercial and personaluse imports and replace the need for HHS Secretary certification with different ways to assure safety and effectiveness, among them requiring tamper-resistant and anticounterfeit packaging; inspecting samples of imported drugs; requiring registration of importers, exporters, and Internet pharmacies; and enforcing extensive chain-ofcustody monitoring and documentation. They also present different approaches for influencing industry response.

Opponents of the legislation raise concerns about safety, added costs, the feasibility of imports as a long-term solution to high domestic prices, and whether, beyond the short term, U.S. consumers would pay less for their prescription drugs. Other points of contention include issues of patent law and international trade agreements.

The report examines these issues, spells out how they are treated from bill to bill, and refers to alternatives to importation to ease the burden of prescription drug costs on consumers: use of generics and disease management techniques; research and development incentives to industry; studying the drugs' comparative effectiveness and then judiciously applying the findings in benefit package and prescribing decisions; and assuming some of the consumers' cost.