Here We Go Again. Florida Flirts With Opening Door To Counterfeits

Earlier this month, the state of Florida (population:  21 million) passed a law that seeks to enable the importation of drugs from Canada (population:  37 million).  The goal is to carve out some way for Florida residents to take advantage of the lower drug prices that Canadian citizens enjoy.  Canada is a “single payer” healthcare country, except for prescription drugs, which are not covered by the Canadian universal public health insurance system.  The reason some drugs are cheaper in Canada than they are here in the US is because the government is allowed to negotiate with drug companies to set pricing for their citizens.  But in the US, Congress has specifically denied that option for itself, except for Medicare.

So the Florida legislature passed HB 19 and Governor Ron DeSantis signed it into law, Chapter 2019-99 (see article in Tampa Bay Times).  The law seeks to make Florida the first state to trigger a federal law that has been on the books since 2003, although they are not the first to try.  That federal law is 21 U.S. Code § 384, “Importation of prescription drugs”.  The core provision of the federal law says:

“The Secretary, after consultation with the United States Trade Representative and the Commissioner of U.S. Customs and Border Protection, shall promulgate regulations permitting pharmacists and wholesalers to import prescription drugs from Canada into the United States.”

But in the details, the law requires the Secretary of the FDA to first certify that the implementation 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 to the American consumer.”

So far, no state has been successful in convincing the Secretary of the FDA that there is a way to accomplish both things, so the law has never been triggered.  The law sets a high bar for any commissioner to be able to make those certifications.  According to the federal law, drugs from Canada must be relabeled to US standards, which means they must be assigned a new National Drug Code and the relabeling facility must be licensed by the FDA and must follow current Good Manufacturing Practices (cGMP) to reduce the possibility of errors. 

WHAT EFFECT DOES THE DSCSA HAVE ON THE FLORIDA LAW?

As hard as it was to trigger when it was originally passed in 2003, the passage of the federal Drug Supply Chain Security Act (DSCSA) in 2013 makes it even harder.  Under the DSCSA since last November, all non-exempt drugs entering the US supply chain from manufacturers and repackagers must have a serialized product identifier on them.  When a repackager produces serialized drug packages under the DSCSA, those serial numbers must be linked to the serial numbers applied by the original manufacturer.  As of this coming November, US wholesale distributors cannot buy or sell non-exempt drugs without that serialized product identifier applied by the manufacturer or repackager. 

The problem is, the new Florida law combined with the 2003 federal law only works if drugs, originally labeled for distribution in Canada by the manufacturers, can be repackaged/relabeled for distribution in the United States.  Because drugs distributed in Canada do not require serialization, drug manufacturers are generally not applying any to packages distributed there.  So when the importer buys drugs in Canada and repackages them for distribution in Florida, they will have no manufacturer-applied serial number to link to.  Which means there is no way to transform a drug packaged for the Canadian market into a drug that meets the requirements of the DSCSA.

But even if a drug is serialized for the Canadian market—whether voluntarily, or perhaps under some future Canadian serialization mandate—you still won’t be able to transform it into something that would be legal under the DSCSA.  That’s because when we use the term “serial number”, it’s just a lazy way of referring to the requirement for drugs under the DSCSA to be marked with a Standardized Numerical Identifier (SNI) (see “DSCSA ‘Serial Numbers’”).  An SNI must be composed of the FDA-registered National Drug Code (NDC) of the drug package plus a unique serial number, where the serial number is only unique in its association with that NDC.  Despite being composed of two data elements, the SNI must be treated as a single identifier (see “The DSCSA Product Identifier On Drug Packages”).  So even when a Canadian drug is “serialized”, that will never be accomplished by the manufacturer applying a true “SNI”—a US DSCSA-only concept.  And so, to be accurate, the actual rule under the DSCSA is that a repackager can only repackage drugs that have a manufacturer-applied SNI, not just any “serial number”.

And there’s more.  Not just anyone can be a repackager of drugs for the US market.  The DSCSA mandates that every drug have a complete transaction history that extends back to the first sale by the original manufacturer or a repackager who bought directly from the original manufacturer.  And every seller in the supply chain must provide the buyer with three DSCSA-specific documents, including Transaction Information, Transaction History and a Transaction Statement which asserts compliance with a list of DSCSA requirements.  A manufacturer selling a drug packaged for the Canadian market to a Canadian repackager would have no reason to provide those documents along with the sale, which means the necessary DSCSA documentation history would be broken irreparably, again, rendering these drugs permanently unsellable in the US market.

The reason for these requirements runs to the very reason the DSCSA exists, which, by the way, has its origins in a number of supply chain crimes that occurred, ironically, in the state of Florida and which then afflicted the supply chain nationwide back in the early 2000s (see “Dangerous Doses”).  Drugs from Canada—or anywhere else outside the regulatory authority of the FDA—will already be at an elevated risk to patients in the US, so it certainly doesn’t make sense to lessen the protections below the level the DSCSA imposes on drugs that never leave the US regulatory system.  No Secretary of the FDA can ever say that such drugs “…pose no additional risk to the public’s health and safety…”, because without the protections built into the DSCSA, there would be no way to fully investigate them, and therefore the risks would always be greater.

For these reasons, the new Florida law—and any others that rely on the federal “Importation of prescription drugs” law—cannot be implemented.

Dirk.

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