American Insurance

HHS releases plan for lower drug costs

Jul 31, 2019

The U.S. Department of Health and Human Services (HHS) announced today that HHS and the U.S. Food and Drug Administration (FDA) are publishing a  Safe Importation Action Plan  that outlines two potential pathways that would lay the foundation for the safe importation of certain drugs originally intended for foreign markets.  The plan is in response to the Trump Administration’s goal of cutting prescription drug costs for US consumers and removing barriers to importation from less expensive foreign markets.  

Under Pathway 1, a Notice of Proposed Rulemaking (“NPRM”) would rely on the authority in the Federal Food, Drug, and Cosmetic Act (“FD&C Act”) section 804 to authorize demonstration projects to allow importation of drugs from Canada. The NPRM would include conditions to ensure the importation poses no additional risk to the public’s health and safety and that it will achieve significant cost savings to the American consumer. Under this pathway, States, wholesalers, or pharmacists could submit plans for demonstration projects for HHS to review outlining how they would import Health-Canada approved drugs that are in compliance with section 505 of the FD&C Act.   

Under Pathway 2, manufacturers could import versions of FDA-approved drug products that they sell in foreign countries that are the same as the U.S. versions. Under this pathway, manufacturers would use a new National Drug Code (NDC) for those products, potentially allowing them to offer a lower price than what their current distribution contracts require.

 The Administration has reason to believe that manufacturers might use this pathway as an opportunity to offer Americans lower cost versions of their own drugs. In recent years, multiple manufacturers have stated (either publicly or in statements to the Administration) that they wanted to offer lower cost versions but could not readily do so because they were locked into contracts with other parties in the supply chain. This pathway would highlight an opportunity for manufacturers to use importation to offer lower-cost versions of their drugs.

The Safe Importation Action Plan is just the beginning of a process to identify and approve certain drugs and how those drugs can be made available to U.S. consumers. The plans will be followed by a rulemaking process which includes conditions to ensure the importation poses no additional risk to the public’s health and safety and that it will achieve significant cost savings to the American consumer.

 Source: Health and Human Services, News Release 07/31/19, HHS Announces New Action Plan

View full site   © 2019 American Insurance