Question Period Note: U.S. PROPOSAL TO ALLOW BULK IMPORTS OF PRESCRIPTION DRUGS FROM CANADA

• What is the Government doing to safeguard Canada’s drug supply from U.S. bulk importation schemes?

• Ensuring that Canadians have access to the medicines they need is a top priority for our Government.

• Canada’s drug market is too small to meet the demand for prescription drugs of both Canadian and American consumers.

• Our government will employ necessary measures to safeguard the drug supply, preserving access to needed drugs for Canadians.

U.S. Rule on the Importation of Prescription Drugs

On October 1, 2020, the final rule for the U.S. regulatory proposal on the Importation of Prescription Drugs was published. When the rule comes into effect on November 30, 2020, it will create a pathway for licensed U.S. pharmacists or wholesalers, working within a state-sponsored program approved by the U.S. Food and Drug Administration (US FDA), to import in bulk certain prescription drugs intended for the Canadian market. Under this plan, eligible drugs must be FDA- and HPFB-approved drugs labeled for sale in Canada, with exclusions for higher risk drugs. The Canadian seller must be licensed by Health Canada for wholesaling, be registered with a provincial authority, and must also be registered with the FDA. The importer must submit a pre-import request to the FDA at least 30 days in advance of product entry and arrival into the U.S. The program allows only a direct supply chain of one manufacturer, one Canadian seller and one importer for each imported drug.

If prescription drugs intended for the Canadian market were to be imported into the U.S. in bulk, it could further exacerbate the existing problem of drug shortages in Canada, putting the health of Canadians at risk.

On March 9, 2020, the Government of Canada submitted comments during the U.S. consultation process to publicly document Canada’s opposition to the proposed rule, given that it is not deemed to be an effective solution to high drug prices in the U.S. and that it could exacerbate drug shortages in Canada. The comments also made it clear that the Government of Canada will take the necessary measures to safeguard Canada’s drug supply.

Importation programs have been heavily promoted by President Trump as a solution to high drug pricing in the U.S. The Biden campaign has also indicated support for importation programs. States are at various stages of readiness to implement bulk importation programs of prescription drugs from Canada. Florida, Colorado, Maine, Vermont, New Hampshire and New Mexico have already enacted legislation to authorize such a program, and 18 other states have similar legislation in progress. [REDACTED]

There are two key limitations to prescription drug importation in the U.S. rule. First, the U.S. legislation excludes certain categories of drugs from importation under these programs (e.g., controlled substances, biologics, infused drugs, intravenously injected drugs, and drugs inhaled during surgery). Second, the legislation only allows drugs to be imported if there will be a cost savings to U.S. consumers. The variance in price differences between both countries, as well as between states in the U.S., makes it difficult to predict which drugs would be imported until individual states propose their pilot programs.

Industry and patient advocacy groups are calling on the Government to “act swiftly, firmly and publicly” in response to U.S. plans. Large industry players, representing 90-95% of pharmaceutical distribution in Canada, have indicated that they do not intend to participate when the U.S. proposal is in place. However, there is the potential for smaller players in the market to participate, and any industry uptake could have an impact on the Canadian drug supply.

SYNOPSIS
• On October 1, 2020, the United States published the final rule on the Importation of Prescription Drugs. The rule comes into effect on November 30, 2020, and creates a pathway for licensed U.S. pharmacists or wholesalers to import in bulk certain prescription drugs intended for the Canadian market. The rule could worsen the existing problem of drug shortages in Canada and put the health of Canadians at risk.
IF PRESSED ON POSSIBLE INCREASED DRUG PRICES FOR CANADIANS DUE TO THE U.S. RULE

• We do not expect that the U.S. rule will lead to increased drug prices for Canadians. The Government of Canada is committed to improving Canadians’ access to, and the affordability of, necessary prescription medicines.

• Canadians are protected from excessive prices for patented medicines through the Patented Medicine Prices Review Board. This protection will remain in place and we will continue to work with key partners to ensure all Canadians have access to the medicines they need.