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PhRMA questions the cost savings and says the rule leaves safety considerations to state governments

The Pharmaceutical Research and Manufacturers of America, Partnership for Safe Medicines and Council for Affordable Health Coverage is suing the Department of Health and Human Services and the Food and Drug Administration for allowing the importation of certain prescription drugs from Canada.

The three organizations have initiated litigation in the U.S. District Court for the District of Columbia, challenging action by HHS and the FDA to permit pharmacists and wholesalers, pursuant to state-sponsored programs, to import the drugs into the United States without drug manufacturers’ authorization or oversight.

The lawsuit is based on an HHS final rule, released this fall, that had the aim of passing discounts onto consumers.

The complaint alleges the final rule disregards key protections of the Federal Food, Drug, and Cosmetic Act designed to ensure patient safety.

Section 804 of the Act authorizes HHS to permit both the importation of drugs by pharmacists and wholesalers for commercial distribution and the importation of drugs by individual patients. Section 804 is effective, however, PhRMA said, only if the HHS Secretary certifies to Congress “that the implementation of this section will–(A) pose no additional risk to the public’s health and safety; and (B) result in a significant reduction in the cost of covered products (i.e., certain prescription drugs) to the American consumer.”

HHS Secretary Alex Azar has made no conclusory statements as to safety and cost savings of the rule and has no supporting evidence, while punting the responsibility for safety and cost savings to state governments, PhRMA said.

The complaint, therefore, alleges that Azar’s certification is contrary to Section 804 and unsupported by the record.

In addition, there is no indication that the final rule would reduce costs to patients. In the preamble to both the proposed and final rule, HHS has acknowledged that it cannot quantify the savings, if any, that would result from its rule, even classifying it as “not economically significant” for purposes of review by the Office of Management and Budget.

In the budget document released with the rule, the cost savings chart was left blank, suggesting cost savings could not be calculated, PhRMA said.

Under the rule, the FDA is to oversee the importation of prescription medications from Canada that are labeled for use in the U.S. The drugs are to undergo testing for authenticity and signs of potential degradation and to ensure they meet specifications and standards before receiving official FDA-approved labeling.

The final rule would create large gaps in track-and-trace requirements, said Partnership for Safe Medicines executive director Shabbir J. Safdar.

PhRMA and the other groups want the court to hold unlawful, set aside and permanently enjoin implementation of the Certification and Final Rule.

WHY THIS MATTERS

If not legally blocked, the rule becomes effective 60 days after its publication in the Federal Register, near the end of November, according to Health Affairs.
Implementation goes through states.

The Florida Agency for Health Care Administration announced Monday that it had submitted a proposal to the federal government to allow Florida to establish a program to import prescription drugs from Canada, according to CBS Miami. The Florida plan to import drugs from Canada was designed by Gov. Ron DeSantis.

One logistical challenge is the needed cooperation from manufacturers and Canada. The rule has neither.

THE LARGER TREND

Lowering the price of drugs has been a goal of the Trump Administration.

In September, the president issued an executive order on favored nation status, which would mandate that Medicare pay no more for certain drugs in Medicare that the ‘most favored nation price.’

That order became an interim rule on Friday. The American Hospital Association objected, saying it would cut reimbursement to hospitals by an average of 65%. PhRMA indicated the rule was illegal.

On Friday, HHS also released a final rule on drug rebates and finalized changes to physician referrals under the Stark Law.

ON THE RECORD

PhRMA executive vice president and general counsel James C. Stansel said, “It is alarming that the administration chose to pursue a policy that threatens public health at the same time that we are fighting a global pandemic. FDA has noted it is struggling to keep up with approving medicines while working around the clock to support COVID-19 therapeutics and vaccine development. Despite this, the administration is willing to divert precious FDA resources away from these efforts and to expose Americans to the risks that come with drug importation schemes.”

PSM executive director Shabbir J. Safdar stated: “Since the start of the COVID-19 pandemic, the key role of FDA in ensuring the availability of safe and effective medicines and the integrity of the American pharmaceutical supply chain has become even more clear. Once we weaken the long-standing defenses in place for our drug supply, as this Final Rule does, we open floodgates that cannot be closed. This makes absolutely no sense from a policy standpoint, which is why HHS and the FDA have long opposed and refused to effectuate importation measures like those in the Final Rule from ever seeing the light of day.”

CAHC president Joel White stated: “The importation scheme envisioned in this final rule brings a false promise to Americans that it will result in lower cost. Providers, pharmacists and the patients they serve may no longer trust the medicines they prescribe and dispense are safe and effective. There are better ways to lower costs through increased competition, paying for outcomes, and price transparency for consumers.”

Sandesh Ilhe
Sandesh Ilhe
With an Engineers degree in Advanced Database Management and Information Security, Sandesh brings the deep understanding of the digital world to the table. His articles reflect the challenges and the complexities that come along with every disruption in the industry. He carries over six years of experience on working with websites and ensuring that the right article reaches the right reader.