What a State Drug Importation Program Actually Requires

Answer first: a state applies, and the program is time-limited

The regulation sets out the procedures a sponsor must follow when submitting plans to implement time-limited programs to begin importation of drugs from Canada. It also sets out the requirements a program has to meet to be authorized.

The sponsor is not a company by default. It means a state or Indian Tribe that regulates wholesale drug distribution and the practice of pharmacy, submits a proposal describing such a program, and is responsible for oversight of its implementation.

The rule contemplates that changing later. There is an initial two-year period, beginning on the date of the first import entry under any authorized program. After it, the Secretary may determine there is a sufficient likelihood that a proposal without a state or tribal sponsor could provide the same level of assurance of safety.

Only after that determination could a pharmacist or wholesaler propose a program on its own. Even then the sponsor would have to demonstrate the same level of assurance, with the agency evaluating whether it has sufficient relevant experience.

This is not a route for an individual and it is not a route for a telehealth company. It is a state program with an importer inside it.

What counts as an eligible drug, and eight things that do not

The definition is narrow and it starts from a Canadian approval.

An eligible prescription drug is one that has been approved and has received a Notice of Compliance and a Drug Identification Number from Health Canada's Health Products and Food Branch. But for deviating from required United States labeling, it must also meet the conditions in an approved United States application for a drug currently commercially marketed here.

The conditions it must meet are listed. Those relating to the drug substance, the drug product, the production process, quality controls, equipment and facilities.

Then eight exclusions. A controlled substance. A biological product. An infused drug, including a peritoneal dialysis solution. An intravenously injected drug. A drug inhaled during surgery. An intrathecally or intraocularly injected drug.

The last two are regulatory rather than anatomical. A drug subject to a risk evaluation and mitigation strategy, and a drug that is not a product for purposes of the supply chain security provisions.

Nothing here decides whether any particular medication is eligible. That determination belongs to the agency reviewing a specific proposal, and the list above is printed so a reader can see what the definition actually turns on.

Who the two named parties have to be

Two roles carry hard licensing requirements, and both are worth reading closely.

A foreign seller is an establishment within Canada engaged in the distribution of an eligible prescription drug. It must have an active drug establishment license to wholesale drugs from Health Canada, and must be registered with provincial regulatory authorities to distribute Health Canada approved drugs.

Then a prohibition that closes the loophole people worry about. A foreign seller must not hold a particular kind of provincial license. That is an international pharmacy license allowing it to distribute drugs approved by countries other than Canada and not approved for distribution in Canada.

It must also register with the agency here under the importation section.

An importer means a pharmacist or wholesaler, and specifically a state-licensed pharmacist or a state- or federally-licensed wholesale distributor who is the United States owner of the drug at the time of entry.

The license has to come from the right place. An importer's state-issued license must be issued by a state that is a sponsor or co-sponsor of the program, must be in effect, and must be in good standing with the licensor.

What the proposal has to contain

The submission list is long, and reading it explains the gap between announcing a program and running one.

A cover sheet identifying the sponsor and co-sponsors and a point of contact, signed by someone who resides or has a place of business in the United States.

An overview naming each eligible drug and its Canadian identification number. The applicant holding the approved United States application for its counterpart, and that application's number. The manufacturer of the finished dosage form and the manufacturer of the active ingredient. The foreign seller with a copy of its Health Canada establishment license, the importer, and any separate relabeler or repackager.

A sponsor may designate only one foreign seller and one importer per initial proposal. Additional ones are added later through a supplemental proposal.

The importation plan itself has to include a disclosure of any past criminal convictions or violations of state, federal or Canadian drug or device laws. That covers the responsible individuals, the foreign seller and the importer, or an attestation that there have been none. It reaches principals, any shareholder owning ten percent or more of a non-publicly held corporation, directors, officers, and facility managers.

It also requires a list of all disciplinary actions imposed by state, federal or Canadian regulators for the previous seven years. Add the foreign seller's Health Canada inspectional history for five years, and the importer's state and federal inspectional history for five years.

The labeling comparison, and the sentence that goes on the box

One requirement in the proposal turns into something a patient could actually see.

The plan must include the approved United States labeling for the counterpart drug and the proposed labeling for the imported drug. It must also include a side-by-side comparison covering prescribing information, carton and container labeling and patient labeling, with all differences annotated and explained. The Canadian labeling goes in too.

At the point of sale, the labeling must be the same as the approved United States labeling, with specific additions.

The importer's own national drug code, replacing any other code on the label. The lot number assigned by the manufacturer, on both carton and container. The name and place of business of the importer.

And a printed sentence. This drug was imported from Canada without the authorization of the named applicant under the named sponsor's importation program.

That statement has to appear in the how supplied section and also on the immediate container label and outside package. It is the plainest signal in the whole scheme, and it says out loud that the original manufacturer did not agree to this.

There is also an adverse reaction reporting requirement for certain products, giving the importer's name and a telephone number to provide a structured process for reporting suspected adverse events.

The manufacturer is pulled in, whether or not it wants to be

Several obligations fall on a company that is not a party to the program.

On request from a sponsor or importer, the manufacturer of an eligible drug must give the importer written authorization to use the approved United States labeling at no cost. If it fails to do so within 30 calendar days, the agency may deem that authorization to have been given.

The manufacturer must also provide an attestation and information statement, within 30 calendar days of the importer's request. It confirms that the Canadian drug, but for its labeling, meets the conditions in the approved United States application.

That attestation is specific. Confirmation of the same active ingredients and active ingredient sources including manufacturing facilities, the same inactive ingredients, dosage form, strengths and routes of administration. Conformance to the application's specifications for drug substance, drug product, intermediates, raw materials, container closure systems and other production materials.

It must also confirm manufacture in accordance with the conditions in the application, including the facilities and manufacturing lines used, and in compliance with current good manufacturing practice requirements.

If the manufacturer cannot provide it, there is a defined exit. It must notify the agency and the importer of its inability and articulate with specificity the reasons why.

Separately, the manufacturer must provide executed batch records including certificates of analysis for a recent commercial-scale batch of each version, for each manufacturing line used, again within 30 calendar days of the request.

Testing, and the laboratory that has to do it

Every shipment is sampled, and the sampling method is prescribed.

Take the arrival of an initial shipment containing a batch identified in a granted pre-import request. The importer must select a statistically valid sample of that batch to send to a qualifying laboratory for the required testing, unless the manufacturer conducts it.

Subsequent shipments are not exempt. Where a shipment consists entirely of a batch already tested, a statistically valid sample of that shipment is still selected and sent.

Three further sets of the same samples go to a designated agency field laboratory.

A qualifying laboratory has three requirements. It must hold ISO 17025 accreditation. It must have an inspection history with the agency, and must have satisfactorily addressed any objectionable conditions or practices identified at its most recent inspection. And it must comply with applicable good manufacturing practice requirements including the provisions on laboratory controls and laboratory records.

The testing itself is defined by what it has to establish. Authenticity, degradation, and compliance with established specifications and standards.

Relabeling comes after, not before. Once the agency reviews the testing results and determines they are acceptable, it notifies the importer, and only then must the importer cause the drug to be relabeled with the required United States labeling.

Getting the shipment into the country

The border steps are unusually prescriptive for a consumer-facing subject, and they explain the operational cost.

Each shipment must be accompanied by an entry for consumption filed electronically as a formal entry and designated in the system as a drug imported under this part.

Entry is allowed only at a port the agency has authorized for this purpose.

The product then has to sit still. The importer must keep it at a secured warehouse, a location within a specific foreign trade zone, or another secure distribution facility it controls or contracts with. It stays there under appropriate environmental conditions until the agency issues an admissibility decision.

There is even a distance rule. That secured facility must be within 30 miles of the authorized port of entry for examination.

A pre-import request must be filed at least 30 calendar days before the scheduled arrival or entry for consumption, whichever comes first, and the drug may not be imported unless that request has been granted.

The cost test, and the discretion to say no anyway

One requirement runs through the whole proposal and is the reason the program exists.

The sponsor must explain how it will ensure the program will result in a significant reduction in the cost to the American consumer of the drugs it seeks to import. The explanation must include any assumptions and uncertainty and be sufficiently detailed to allow a meaningful evaluation.

Meeting every requirement is not the end of it. The regulation says that where a proposal meets the requirements, the agency may nonetheless decide not to authorize it.

The reasons it gives as examples are worth reading. Potential safety concerns. A foreign seller not identified within six months of the initial submission. The degree of uncertainty that the proposal would adequately ensure protection of public health.

It also names the cost question again, as a reason to decline. That is the relative likelihood, based on a recommendation from another department component, that the proposal would not result in significant cost savings to the American consumer.

And it names two administrative grounds. The potential for conflicts of interest, and limiting the number of authorized programs so the agency can carry out its responsibilities effectively in light of the resources allocated to them.

Why this rarely reaches a pharmacy counter

Put the requirements end to end and the shape becomes clear.

A state has to sponsor it and stay responsible for oversight. A specific Canadian wholesaler with a specific license, and a specific pharmacist or wholesaler licensed by that state, have to be named up front.

The original manufacturer has to hand over labeling authorization, an attestation about its own production process, and batch records — or explain in specific terms why it will not.

Every batch has to be sampled statistically, tested at an accredited laboratory with a clean inspection posture, and cleared before relabeling, at a designated port with a secure facility within 30 miles.

And every package has to carry a sentence saying it was imported without the authorization of the company whose drug it is.

None of that makes importation impossible. It does explain why an announcement about importing a medication and a medication actually arriving are separated by a very long list.

What this page does not tell you

Three boundaries, stated where you can see them.

Everything above is drawn from the text of the federal importation program regulation. No state's program status, application or outcome is reported, and no seller is named.

Nothing here decides whether any particular medication is an eligible prescription drug. The definition and its eight exclusions are printed so a reader can see the test; applying it to a product is the agency's job on a specific proposal.

And this is not the personal importation question. An individual bringing a medication in for personal use runs into a different instrument entirely, which is covered separately.