The new Medicare legislation, the Medicare Prescription Drug, Improvement, andModernization Act ( P.L. 108-173 ), addresses the importation of prescription drugs for all U.S.consumers, not just for Medicare-eligible individuals. (1) These provisions are rooted in consumer and congressional concernwith the high cost of prescription drugs in the United States. International comparisons of drugprices have confirmed that American consumers, particularly the elderly and uninsured, often paymore for prescription drugs than do citizens in other countries. (2) The importation oflower-priced prescription drugs is one strategy to reduce U.S. consumer spending. The new Act, despite being structured as a replacement to the importation provisions in theMedicine Equity and Drug Safety (MEDS) Act of 2000, does not effectively change U.S.prescription drug importation policy. The details it adds will not be implemented unless theSecretary of Health and Human Services (hereafter referred to as the Secretary) certifies to Congressthat such imports would not threaten the health and safety of the American public and would providecost savings. That certification requirement, continued from prior law, has effectively haltedimplementation of import provisions because no Secretary has been willing to provide the requiredcertification, a stance outlined in testimony from the Food and Drug Administration (FDA). (3) Although earlier laws restricted the importation of a prescription drug to its manufacturer,the FDA has maintained a lenient enforcement policy that lets individuals bring a small amount ofnon-FDA approved drugs into this country for their own use. (4) Called a "personal-use" or"compassionate-use" policy, this FDA discretion has made it easier for patients with life-threateningdiseases (such as cancer and AIDS) to bring medicines into the country and be treated by their owndoctors. The policy, as described on the FDA website, does not cover commercial imports, nor doesit cover individual imports of FDA-approved drugs available in the United States. (5) The new Medicare legislation (6) entirely replaces the language in Section 804 of the Federal Food,Drug, and Cosmetic Act (FFDCA) that had been inserted by the MEDS Act of 2000. The followingsummarizes the prescription drug import provisions in the new Act. Provisions Definitions. [Section 804(a)] "Importer" isdefined to mean a pharmacist or a wholesaler; "pharmacist" to mean a person licensed by a state topractice pharmacy, including the dispensing and selling of prescription drugs; and "wholesaler" tomean a person licensed as a wholesaler or distributor of prescription drugs in the United States, notincluding the manufacturer of the drug being imported. A "prescription drug" is defined as a drugsubject to Section 503(b) (7) excluding, however, a controlled substance, a biological product, an infused drug, an intravenouslyinjected drug, a drug that is inhaled during surgery, or a parenteral drug whose importation theSecretary determines poses a threat to the public health. "Qualifying laboratory" is defined as a U.S.laboratory that has been approved by the Secretary for the purposes of this section. Regulations. [Section 804(b)] The Secretary,after consultation with the United States Trade Representative and the Commissioner of Customs,must promulgate regulations permitting pharmacists and wholesalers to import prescription drugsfrom Canada into the United States. Limitation. [Section 804(c)] The regulationsmust ensure that all imported prescription drugs meet the same safety and efficacy standards as drugsapproved in the United States and that the importer comply with all information and reportingrequirements. The Secretary is permitted to adopt such rules as necessary to safeguard public healthor as a means to facilitate the importation of prescription drugs. Information and Records. [Section 804(d)] Drugimporters must provide information that includes the name and amount of the active ingredient ofthe drug, the dosage form of the drug, the date the drug is shipped, the quantity shipped, andinformation about its origin and destination. The importer must also supply the price paid by theimporter; the importer's name, address, and license number; the original source of the drug and theamount of each lot received from that source; and the manufacturer's lot or control number. Also,the importer or manufacturer must certify that the drug is FDA-approved, properly labeled, notadulterated, and not misbranded; and provide laboratory records of authenticity testing, includingdata, and evidence that testing was conducted in an approved U.S. laboratory. The importer isrequired to provide any other information that the Secretary determines is necessary to ensure thepublic health. Records regarding imported prescription drugs must be provided to the Secretary, andthen kept for such time as the Secretary determines to be appropriate. For a prescription drug imported directly from the first foreign recipient from themanufacturer, there must be documentation indicating that the drug came directly from themanufacturer, that the amount being imported is not greater than the quantity that was originallyreceived, that the drug was subsequently shipped by that recipient to the U.S. importer, andverification that each batch of the drug has been statistically sampled and tested for authenticity anddegradation prior to importation. Samples of subsequent shipments of these drugs must also betested for authenticity and degradation. For a prescription drug not imported directly from the firstrecipient in the foreign country, there must be documentation demonstrating that each batch of thedrug has been statistically sampled and tested for authenticity and degradation prior to importation. Testing. [Section 804(e)] The importer or themanufacturer must conduct the required authenticity testing at a qualified U.S. laboratory. If theimporter conducts these tests, the manufacturer must give the importing pharmacist or wholesalerthe information needed to authenticate the product and confirm its labeling. Also, testinginformation must be kept in confidence and used only for this required import testing or to otherwisecomply with this Act. The Secretary may adopt rules to protect trade secrets and commercial orfinancial information that is privileged or confidential. Registration of Foreign Sellers. [Section 804(f)] Any Canadian establishment engaged in the distribution of a prescription drug imported or offeredfor importation into the United States must register its name and place of business with the Secretary. The Canadian establishment also must register the name of its U.S. agent. Suspension of Importation. [Section 804(g)] Ifthe Secretary discovers a pattern of counterfeit or violative products, the agency must suspendimportation of that specific prescription drug or that specific importer. The suspension must stayin effect until the FDA investigates and determines whether the public is being adequately protectedfrom counterfeit and violative drug products under existing regulations. Approved Labeling. [Section 804(h)] A drugmanufacturer must give the importer written authorization to use, at no cost, the approved labelingfor the prescription drug. Charitable Contributions. [Section 804(i)] Section 801(d)(1) of the FFDCA, which allows only the U.S. manufacturer of a drug to import it intothe United States, will continue to apply to a product donated by a manufacturer of a drug to acharitable organization or foreign government. (8) Waiver Authority for Importation by Individuals. [Section 804(j)] Congress declares that the Secretary should use discretion when enforcing thecurrent legal prohibition against persons importing drugs or devices. The Secretary should focusenforcement on cases where the importing may pose a significant threat to public health. When theimportation is clearly for personal use and the prescription drug or device does not appear to presentan unreasonable risk to the individual, the Secretary should exercise discretion to permit theimportation by the individual. The new law specifies two waiver procedures to allow individuals-- other than pharmacists and wholesalers -- to bring prescription drugs into the United States fortheir personal use. The first deals with drugs from Canada. The Secretary is required to publish regulations thatgrant waivers for an individual to import for personal up to a 90-day supply of a drug from a licensedCanadian pharmacy. The drug must also be in final dosage form, be made in an FDA-registeredfacility, come from a registered Canadian seller, be accompanied by a valid prescription, and beimported under conditions the Secretary determines are necessary to ensure public safety. The second addresses drug imports from any other country. Here, the law gives the Secretarythe option, rather than a requirement, to issue regulations allowing imports from countries other thanCanada. If the Secretary were to publish such regulations, the law requires the Secretary to alsopublish guidance specifying the conditions under which individuals would be able to import drugsfor personal use. Construction. [Section 804(k)] Nothing in thissection shall be construed to limit the Secretary's authority relating to the importation of prescriptiondrugs, other than with respect to Section 801(d)(1), which allows only the manufacturer to importa prescription drug. Commencement of Program. [Section 804(l)] The drug import program described above can begin only if the Secretary first certifies to Congressthat its implementation would pose no additional risk to public health and safety, and would resultin a significant reduction in the cost of covered products (prescription drugs) to Americanconsumers. Termination of Program. [Section 804(l)] Oncean importation program is implemented, the Secretary can move to terminate it under specifiedconditions. If the Secretary certifies to Congress, between 12 and 18 months after the regulationsare implemented, that, based on substantial evidence, in the opinion of the Secretary, the benefits ofthe implementation of the import program do not outweigh any detriment, drug imports under thesection would cease 30 days after the certification is submitted.