FDA Takes Actions to Help Lower U.S. Prescription Drug Prices

GUIDANCE FOR INDUSTRY | FINAL RULE

September 24, 2020 - The U.S. Department of Health and Human Services and the U.S. Food and Drug Administration took actions to help provide safe, effective, and more affordable drugs to American patients as part of the Safe Importation Action Plan, fulfilling the aspect of the July Executive Order on drug pricing to complete the rulemaking to allow states to import certain prescription drugs from Canada.

The final rule implements a provision of federal law that allows FDA-authorized programs to import certain prescription drugs from Canada under specific conditions that ensure the importation poses no additional risk to the public’s health and safety while achieving a significant reduction in the cost of covered products to the American consumer. The final guidance for industry describes procedures drug manufacturers can follow to facilitate importation of prescription drugs, including biological products, that are FDA-approved, manufactured abroad, authorized for sale in any foreign country, and originally intended for sale in that foreign country.

“Today’s action is an important part of FDA’s priorities to promote choice and competition. The Safe Importation Action Plan aims to clearly describe procedures to import drugs that would lower prices and improve access while also maintaining the high quality and safety Americans expect and deserve,” said FDA Commissioner Stephen M. Hahn, M.D. “The FDA will continue to assess and act on opportunities to increase competition in the prescription drug market and help reduce the cost of medicines.”

The rule allows states (including the District of Columbia and territories), Indian tribes and — in certain future circumstances — pharmacists and wholesalers, to submit importation program proposals to the FDA for review and authorization. An importation program can be co-sponsored by a state, Indian tribe, pharmacist or wholesaler. Referred to as Section 804 Importation Programs, these programs will be managed by the respective sponsor and any co-sponsors and authorized by the FDA to facilitate the importation of certain prescription drugs that are approved in Canada and, with appropriate labeling, meet the conditions of an FDA-approved drug application. Eligible prescription drugs would have to be relabeled with the required U.S. labeling and undergo testing for authenticity, degradation and to ensure that the drugs meet established specifications and standards. These programs will also have to demonstrate significant cost reductions of the covered products to the American consumer.

The final guidance issued today describes procedures for a drug manufacturer to obtain a National Drug Code (NDC) for certain FDA-approved prescription drugs, including biological products and combination products, that were originally manufactured and intended for sale in that foreign country. The use of an additional NDC for these products may allow greater flexibility for drug companies to offer these products at a lower price than what their current distribution contracts require. Prescription drugs, including biological products, imported under the pathway described in the final guidance could be available to patients in a variety of settings, including hospitals, health care providers’ offices or licensed pharmacies, and would include the FDA-approved labeling (including prescribing information).

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of our nation’s food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.