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March 17, 2006

Steven M. Saxe
Director, Washington State Board of Pharmacy
State of Washington Department of Health
Olympia, WA 98504

Dear Mr. Saxe:

I have been asked to respond to your August 31 letters to Secretary Leavitt requesting a waiver under the Medicare Prescription Drug Improvement and Modernization Act (MMA) to allow licensure of Canadian pharmacies and foreign wholesalers by the Washington Board of Pharmacy. We have thoroughly reviewed your request and for the reasons stated below, we must deny your request for a waiver.

FDA is very concerned about the safety risks associated with the importation of prescription drugs from foreign countries. In our experience, many drugs obtained from foreign sources that are represented as U.S. approved prescription drugs are of unknown origin and quality. In examining imported drugs sent through the mail, FDA has identified counterfeit drugs, so-called "foreign versions" of FDA-approved drugs, improperly labeled drugs, drugs that failed to meet special storage conditions, and drugs requiring physician monitoring. Such findings illustrate the types of risks posed by the illegal importation of prescription drugs. The December 2004 HHS Task Force on Drug Importation has found that the unregulated importation of prescription drugs poses serious health risks. The agency cannot provide adequate assurance that the drug products delivered to consumers in the United States from any foreign country, including Canada, U.K., Ireland, or others are the same as products we have approved. In fact, many drugs that U.S. consumers purchase from Canada and believe were made in Canada in fact originate from other countries such as India and Costa Rica.

These safety concerns are reflected in Congress' enactment of the new drug and import provisions of the Federal Food, Drug, and Cosmetic Act (the Act), 21 U.S.C. § 301 et. seq., which strictly limit the types of drugs that may be sold within and imported into the United States and who may import them. Congress enacted these provisions to create a relatively "closed" drug distribution system, which helps ensure that the domestic drug supply is safe and effective.

General Legal Framework

Virtually all prescription drugs imported for personal use into the United States from Canada violate the Act because they are unapproved new drugs (21 U.S.C. § 355), labeled incorrectly (21 U.S.C. §§ 352, 353)), or dispensed without a valid prescription (21 U.S.C. § 353(b)(1)). Importing a drug into the United States that is unapproved and/or does not comply with the labeling requirements and dispensing requirements in the Act is a prohibited act under 21 U.S.C. §§ 331(d), and/or (a) that may be enjoined or prosecuted. See also 21 U.S.C. §332(a), 333(a).

FDA approvals are manufacturer-specific, product-specific, manufacturing site-specific, and include many requirements relating to the product, such as formulation, source and specifications of active ingredients, processing methods, manufacturing controls, packaging location, container/closure system, and appearance. (21 C.F.R. § 314.50) Frequently, drugs sold outside of the United States are not manufactured or packaged by a firm that has FDA approval for that drug. Moreover, even if the manufacturer has FDA approval for a drug, the version produced for foreign markets and shipped to Canada or other foreign countries may not meet all of the specific requirements of the FDA approval, and thus it is unapproved (21 U.S.C. § 355). The version also may be misbranded because it may lack certain information that is required under 21 U.S.C. §§ 352 or 353(b) but is not required in the foreign country, or it may be labeled in a language other than English (21 C.F.R. § 201.15(c)).

Furthermore, if a prescription drug is originally manufactured in this country and exported, only the United States manufacturer may import the drug back into the United States (21 U.S.C. §381(d)(1)). This is true even if the drug complies in all other respects with the Act. Importing a drug into the United States in violation of section 381(d)(1) is a prohibited act under Section 331(t) of the Act.

In light of the above, it is virtually certain that a foreign wholesaler or pharmacy would fail to comply with all of these applicable requirements, and therefore virtually every importation of prescription drugs for personal use would violate federal law. Consistent with this analysis, on November 6, 2003, following an evidentiary hearing, U.S. District Court Judge Claire V. Eagan entered an order of preliminary injunction to prevent RxDepot, Inc. from causing the importation of unapproved and misbranded drugs into the United States from Canada. See United States v. Rx Depot, Inc., 290 F. Supp. 2d 1238 (N.D. Okla. 2003). On August 20, 2004, Judge Eagan entered a consent decree of permanent injunction in which Rx Depot, Inc. agreed to obey permanently the import prohibitions ordered earlier by Judge Eagan.

Rx Depot was a domestic "storefront pharmacy" that was engaged in the business of helping individuals procure prescription medications from pharmacies in Canada. Rx Depot would accept prescriptions from U.S. customers and then transmit these prescriptions and the customers' credit card numbers to a cooperating pharmacy in Canada. The Canadian pharmacy would then fill the prescriptions, bill the customers' credit cards, and mail the prescription drugs directly to the U.S. citizens.

Judge Eagan held that, although Rx Depot never took possession of the imported drugs, its facilitation of the transactions caused the importation of unapproved new drugs into the United States in violation of sections 505 and 801(d)(1) of the Act (21 USC §§ 355 and 381(d)(1)). The Court explained that "unapproved prescription drugs and drugs imported from foreign countries by someone other than the U. S. manufacturer do not have the same assurance of safety and efficacy as drugs regulated by the FDA." Id. The Court also observed that, "because the drugs are not subject to FDA oversight and are not continuously under the custody of a U.S. manufacturer or authorized distributor, their quality is less predictable than drugs obtained in the United States." Id.

The facts in the Rx Depot case are also instructive. FDA investigators made two undercover purchases of drugs from Rx Depot. Judge Eagan found that in one case the investigator had ordered FDA-approved Serzone (to treat depression) but received instead an unapproved version of that product (APO-Nefazodone). The investigator was allowed to purchase 100 pills (but received only 99 pills), even though his prescription called for dispensing of only 60 pills; the labeling accompanying his order did not, as did his prescription, limit the duration of treatment to 30 days (a potential safety concern); nor did the labeling warn the purchaser of all side effects that were listed in US-approved labeling. The second undercover purchase resulted in shipment of a drug illegally reimported into the US. See Rx Depot, supra, at 1242-43 (findings 22-31).

Another federal court reached a similar conclusion in Vermont v. Leavitt, 405 F.Supp.2d 466 (D. Vt. 2005). The case arose from a Citizen Petition that the Vermont Agency of Administration ("VAA") submitted to FDA in December 2003. The VAA requested that the agency allow the Vermont State Employee Medical Benefit Plan to establish a program for the individual importation of prescription drugs from Canada. FDA denied the Petition explaining, among other things, that drugs imported into Vermont under the proposed program would violate 21 USC §§ 355 and 381(d). The VAA and the State of Vermont subsequently filed a lawsuit in August 2004 challenging FDA's denial on several grounds.

On September 19, 2005, the federal district court ruled in favor of the government and dismissed the state's complaint. The court's opinion specifically addressed the legality of the state's proposed importation plan. Citing Rx Depot, the court concluded, "[t]here is no question that Vermont's proposed program would violate the FDCA." Id. at 13. The court explained that, "as Vermont's proposed plan would be highly likely to include drugs manufactured in the United States, it would lead to violations of section [301(t)]." Id. In addition, the court explained that the plan would likely lead to violations of section 331(a) because "[m]any Canadian drugs will have packaging and labeling that is not approved by FDA" and "many Canadian drugs have not been manufactured according to GMP (even if these drugs are pharmacologically identical to drugs approved by FDA)." Id.

On March 31, 2005, in yet another case, a couple from Chicago claimed that the provisions of the Act that restrict the importation and reimportation of prescription drugs violated their Constitutional substantive due process rights. The United States District Court for the District of Columbia found: "The FDA's interest in ensuring the safety of prescription medications is a legitimate governmental interest. The statutory scheme of which plaintiffs complain reasonably furthers this legitimate interest by shielding the public from reimported drugs that may be adulterated or otherwise unsafe." Andrews v. HHS, No. 04-0307, 2005 U.S. Dist. LEXIS 5710, at *8-*9 (D.D.C. Mar. 31, 2005).

Conclusion

I hope that the preceding discussion is helpful to you. You request that FDA grant a waiver under the MMA to permit the licensure of Canadian pharmacies and foreign wholesalers by the Washington State Board of Pharmacy. The MMA retains the requirement, originally included in the Medicine Equity and Drug Safety Act of 2000, that FDA may make effective a program for the importation of drugs by pharmacists and wholesalers only if the Secretary of Health and Human Services (HHS) (Secretary) first certifies that implementing the program would (1) pose no additional risk to the public health and safety and (2) result in a significant reduction in the cost of drugs to the American consumer. Both former Secretary Thompson and Secretary Shalala concluded (separately) in the past that such products may pose additional risks to safety and therefore declined to make the certification necessary to authorize importation.

The certification requirement in the MMA does not authorize a specific waiver for a discrete state pilot program. This was confirmed recently in Vermont v. Leavitt. As noted above, the state of Vermont sued FDA on several grounds when the agency denied the state's December 2003 petition. One of Vermont's allegations was that the certification requirement applied only to some of the importation provisions in the MMA. Thus, Vermont argued, its program was actually legal under the MMA despite the fact that there had been no certification from the Secretary of HHS. The court rejected this argument. "Overall," said the court, "the only sensible way to read the statute is to assume that Congress intended the certification provision to apply to the whole of section 384." Vermont, supra. at 16.

Granting a waiver that permits the importation of prescription drugs from Canada, U.K., Ireland, and other foreign countries will not only result in violations of federal law, but could also put Washington State citizens at risk. FDA approves a drug based on scientific data submitted by the drug sponsor to demonstrate that the drug is safe and effective. We cannot provide adequate assurance to your constituents that the drug products delivered to them from foreign countries are the same products approved by FDA.

FDA is well aware that the high cost of some prescription drugs is a serious public health issue, and we have taken several steps during the last year to help reduce the cost of drugs in the United States without opening our borders to the risks of foreign unapproved pharmaceuticals. These steps include changing our regulations to reduce litigation that unnecessarily delays access to more affordable generic drugs, and doubling the annual number of generic drug approvals over the last five years.

We understand your desire to provide safe and effective prescription drugs at lower cost to the citizens of Washington State. We are doing all we can to lower the cost of drugs in the United States without exposing consumers to unapproved pharmaceuticals. However, for the reasons stated above, we must deny your waiver request.

If you need additional information, please feel free to contact me.

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