Can Trump/Azar/Sharpless Eliminate Parts of the DSCSA to Enable Importation?

Can President Trump, HHS Secretary Azar and Acting FDA Commissioner Sharpless eliminate/adjust/reinterpret any part of the Drug Supply Chain Security Act (DSCSA) to allow Florida, Colorado, Vermont, Maine or any other US state or territory to import drugs from foreign markets?  Let’s take a closer look at what’s been going on recently with the idea of importing drugs from other markets in an attempt to help American citizens buy them at a lower cost. 

In the last year or so those states have passed legislation that authorizes them to try invoking section 21 U.S. Code § 384, “Importation of prescription drugs” in the US Code of Federal Regulations (CFR) (Section 804 of the Food, Drug and Cosmetics Act, FD&C).  That section, enables the development of pilot programs that test importation of drugs from Canada to compete with higher cost versions of the same drugs here.  President Trump has instructed Secretary Azar and Acting Commissioner Sharpless to help these states develop their programs so that they meet the requirements of federal law. 

Last week the FDA released their “Safe Importation Action Plan”.  That plan has two pathways to the type of importation that apparently fulfill those instructions (see RAPS “Two New FDA, HHS Plans to Allow Drug Importation From Canada, Overseas”).  Pathway 1 is a notice of public rulemaking that would invoke the section referenced above to help, not only states, but wholesale distributors and pharmacists implement these pilot programs.  According to the plan, a lot of expensive drugs would be excluded from this pathway.

Drugs under pathway 1 will need to meet the requirements of the DSCSA…but they can’t.  The law requires specific labeling and transaction documentation for every change of ownership back to the original manufacturer, or the repackager who bought directly from the original manufacturer.  Drugs made, packaged and sold under the target of a non-FDA regulatory regime will not have that labeling and documentation, and you cannot make it up after-the-fact (see “Here We Go Again. Florida Flirts With Opening Door To Counterfeits” and STAT Health “State drug importation laws undermine the process that keeps our supply chain safe”).

Pathway 2 imagines drug manufacturers and foreign governments cooperating in an unlikely, contorted, drug “laundering” operation.  In this “cost-saving” scheme, drug manufacturers would willingly buy back their own drugs they just sold to buyers in foreign countries, relabel them with NDCs that differ from their own US-targeted drugs and market them in the US at a lower cost than their own US-versions of the same drugs.  This classic “laundering” scheme would supposedly allow the manufacturer to escape contracts that ‘force’ them to charge high prices for their US-versions.

It is possible that pathway 2 would not have such negative DSCSA impacts as pathway 1, but only because it would be the original manufacturer who is doing the relabeling.  The DSCSA does not appear to require drug manufacturers to document previous supply chain history of drugs that they sell into the US market.  The obvious assumption is that drug manufacturers would never sell products that have an even remotely suspicious history.  But drugs that were outside of their control, even for a few hours, and outside the jurisdiction of FDA regulations and US laws, should automatically be “suspicious” and not worth risking their corporate reputation and the health of their customers.  I’m skeptical any company will voluntarily follow this pathway.

Those who are promoting these pathways in the FDA, HHS and the Administration may be only reading section 804 and no other sections of the FD&C—particularly failing to read the sections added by the DSCSA, like Section 581-585 and others modified by that law.  If you only read Section 804, you might assume it is self-contained and spells out all of the documentation and steps you will need to go through to market drugs from foreign markets here.  But the DSCSA was enacted more recently than the law that installed Section 804 and the reasons those newer provisions were deemed necessary were related to crimes in the supply chain that increased significantly in number after the earlier law was passed—those that Katherine Eban documented in her 2006 book “Dangerous Doses” (see “Dangerous Doses”).

Couldn’t Trump/Azar/Sharpless just eliminate parts of the DSCSA?  The answer is, No, they cannot.  And the reason is really quite simple.

President Trump has been fairly successful in eliminating/adjusting/reinterpreting regulations in other sectors and departments (see Brookings:  “Tracking deregulation in the Trump era”), but all of that success has dealt with regulations, rules, policies and guidance.  The DSCSA is a law, passed by Congress and signed by President Obama in 2013.  It carries a lot more weight than mere FDA rules, guidances or policies.  Not only that, but it contains a provision that makes any delay in guidance or policy by the FDA ineffective in changing the ultimate outcome.  Section 582 (a)(4) states:

“SELF-EXECUTING REQUIREMENTS.—Except where otherwise specified, the requirements of this section may be enforced without further regulations or guidance from the Secretary.”

I’ve mentioned this section before in a slightly different context (see “InBrief: Why The DSCSA Will Be Enforced Even Without FDA Guidance”). 

The FDA is part of the department of Health and Human Services (HHS), which is part of the “Administration”, which is lead by the President.  So is the Justice Department.  What happens if one of those actors—Acting Commissioner Sharpless, Secretary Azar, or President Trump—instructs the FDA to stop all work on the DSCSA, including enforcement?  According to Section 582 (a)(4), the DSCSA may still be enforced.  But who would enforce it?  Probably not the federal Justice Department, who would likely also be instructed not to enforce it.  The law allows the states themselves to enforce provisions of the DSCSA (see Section 585 [b][4]), but what state would self-enforce the requirements of the DSCSA that blocks their own importation plans?  That will leave enforcement up to the courts, perhaps with the Justice department in opposition to any lawsuit filed by advocacy groups.

This is going to be interesting to watch.  Are Americans willing to trade a measure of safety for lower prices on some drugs?  Would you?

Dirk.

4 thoughts on “Can Trump/Azar/Sharpless Eliminate Parts of the DSCSA to Enable Importation?”

  1. Interesting analysis.
    Glad to see you very much on top of your game here.
    We are loving life here in florida. I’m very involved in trying to save the Indian River Lagoon (HelpTheLagoon.org)
    We just returned from a trip to the Galapagos and Peru.
    Be well my friend, Lew

  2. Great analysis. Thanks for sharing. This continues to be a bad idea. First of all what will Canada do for its citizens when the US drains their legitimate drug supply? Here’s an idea – I believe there 180+ US drug manufacturers; why not start there and urge them to lower their drug prices and review the multi-million dollar compensation packages for their CEOs? This continues to be out of whack. The Valeant Pharmaceuticals business comes to mind. JR

    1. JR,
      Exactly. Thanks for your comment. I normally don’t even bother with the point you raise about the US importation of Canadian drugs resulting in shortages there because I want to put my effort into showing how it doesn’t work from a DSCSA perspective. But that argument is the first thing that should come to mind for most people, and I understand that Canadian elected officials are on top of that prospect. I believe our population is more than 3 times theirs. I’m sure they will try to plug the drain with some kind of regulation. It’s no surprise that Canadian’s will follow the lead of our leaders with a “Canada First” philosophy. But all of that is secondary to the problems the idea has with our own laws.
      Dirk.

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