FDA Cracks Down on Drug Reimportation

Published May 1, 2003

Seniors who have been buying cheap drugs over the Internet from Canada soon are likely to be searching for new suppliers.

The U.S. Food and Drug Administration (FDA) issued a letter threatening criminal and civil action against any companies that aid the illegal practice. That would target insurance companies like UnitedHealth Group that pay for drugs purchased abroad. The FDA is quick to point out enforcement priorities will not be against consumers.

It’s the Law

In cracking down on imports, the FDA is only doing its job. Under U.S. law, it is illegal to import prescription drugs from other countries, including through Internet sites, without explicit FDA approval. The law was passed in 1988 to protect U.S. citizens from fake and contaminated imported medicines.

Congress attempted in 2000 to legalize reimportation, but met a firestorm of opposition from former FDA commissioners and Health and Human Services secretaries. They warned imported drugs raise serious safety concerns since they could be counterfeit, contaminated, expired, or mislabeled. Black market rings inevitably spring up with swindlers and imposters entering the market.

A Florida grand jury says that’s already happening along the southern borders of the U.S., where the state’s wholesale pharmaceutical industry has been “corrupted by the infiltration of a criminal element which is making a fortune while tainting our drug supply.” Sale and resale of counterfeit drugs through the state’s Medicaid program is costing taxpayers millions of dollars.

Senior Protest

The FDA crackdown is the latest move in the international drug battles over importing drugs from Canada, where price controls and exchange rates can mean lower prices.

Recently, angry seniors organized a boycott of over-the-counter medicines and braved a knee-deep snowstorm to protest a decision by the British pharmaceutical company, GlaxoSmithKline, to stop selling its prescription drug products to Canadian pharmacies that export the medicines outside Canada.

Glaxo says it made its decision because it can’t guarantee the safety of its products sold by Canadian mail-order pharmacies to the U.S. The Vermont legislature also joined the fray, passing a resolution condemning Glaxo. In an effort to shift the market to other companies, legislators voted to subject all of Glaxo’s prescriptions to a review process before they could be prescribed through state-funded health programs like Medicaid.

No Legal Recourse

The U.S. FDA does not have jurisdiction in Canada and doesn’t begin to have the personnel necessary to monitor every package of pills coming into the U.S. The agency suggests seniors should worry that no one is making certain they are getting the drugs they ordered, much less ensuring the safety of those drugs.

Canadian law doesn’t protect them either. Article 37 of the Canadian Food and Drug Act says drugs imported into Canada but not intended for sale in Canada do not have to meet the same safety inspection standards. The president of the Canadian Medical Association, Dana Hanson, praised the FDA decision. “We feel Internet pharmacies could jeopardize patient safety, and we’re against them.”

The Canadian pharmacy board, which recognizes its pharmacists are breaking U.S. law, has begun to help, punishing Internet pharmacies that fail to have a Canadian pharmacist “rubber stamp” a prescription by a U.S. doctor before it is filled.

If a U.S. citizen were to be injured by reimported drugs, pharmaceutical companies have no doubt trial lawyers would quickly file a class-action suit against them, saying they knew the drugs were being sold back to the U.S. illegally and therefore are responsible. Deaths already have occurred with drugs reimported from Mexico, and it is only a matter of time for Canada, they say.

Follow the Money

Nonetheless, Canadian pharmacies have found that exploiting price controls and breaking U.S. law can be lucrative. At least 80 Internet enterprises are operating in the country, employing about 2,500 people and grossing $500 million a year. They soon may have to find other customers.

Health policy experts agree drug reimportation is not the best way for U.S. seniors to get access to affordable medications. Congress has the issue on the front burner this year, with the leadership hoping to pass by this summer a bill providing a Medicare drug benefit.

What seniors need, they say, is a modernized Medicare plan that includes prescription drug coverage so they don’t have to resort to boycotts and illegal activity.

Grace-Marie Turner is president of the Galen Institute, a not-for-profit research organization that studies the health care marketplace, and contributing editor to Health Care News. Her email address is [email protected].