April 9, 2004
Sen. Charles Grassley (R-Iowa) has introduced a bill to immediately remove federal barriers to the reimportation of lower-cost, U.S.-made prescription drugs from Canada.

Grassley said his legislation reflects consumer demand for the lower-priced pharmaceuticals available in Canada and responds to the fact that the U.S. Food and Drug Administration (FDA) has declined to take action that could lead to certification of prescription drugs from Canada.

"Free trade principles argue for allowing importation of drugs from Canada and other countries as long as those drugs are safe," Grassley said. "The FDA has been unresponsive for years, and U.S. consumers have been going around the FDA. Congress needs to take action to make sure that prescription drug imports are both safe and available to U.S. consumers."

The legislation would give the Food and Drug Administration (FDA) 90 days to develop a system to register and inspect Canadian suppliers. After that, U.S. consumers would be able to purchase prescription drugs only from Canadian companies that have been inspected and registered by FDA.

After two years, the bill would allow the reimportation of prescription drugs from other countries, including Australia, Japan and members of the European Union.

"Imports create competition and keep domestic industry more responsive to consumers," Grassley said. "Americans are tired of waiting for the federal government to address this issue. My bill lights a fire under the FDA and gives it the directive and resources it needs to fulfill its obligations to U.S. consumers."

To reimport prescription drugs, U.S. consumers would need prescriptions from U.S. doctors, and the consumers would only be permitted to purchase treatments approved by FDA. In addition, the bill would not allow the reimportation of some types of prescription drugs, including potentially addictive painkillers.

Grassley said that the cost of setting up an FDA inspection and registration system would be covered by fees paid by the Canadian exporters. He added that FDA's estimates that the agency would need $100 million per year to ensure the safety of reimported drugs are "outrageous" and that the true cost of safety inspections would be much lower.

Grassley's bill would eliminate the tax deduction for advertising costs of any drug companies that cut off supplies to Canada. It would reward drug makers that conform to the reimportation program with increased federal funds for research.

FDA Associate Commissioner William Hubbard said the agency is reviewing the legislation but added that it "raised several concerns."

The bill's formal name is the Reliable Entry for Medicines at Everyday Discounts through Importation with Effective Safeguards Act of 2004 (S.2307), or the REMEDIES Act.

FAQs about the REMEDIES Act of 2004
Provided by Grassley's Office

Q: What are the goals of the legislation?
A: The legislation has two objectives. First, it would put an immediate end to the unregulated and unsafe situation with drug imports that exists today. Second, the legislation would provide the Food and Drug Administration (FDA) with the resources and authority to ensure the safety of imported drugs.

Q: How does the bill work?
A: Current law prohibits the importation of prescription drugs until the Secretary of Health and Human Services (HHS) certifies that importation can be done safely. Using current resources and authority, the FDA has not been able to provide an assurance of safety of imported drugs.

The bill immediately halts unsafe importation but permits individuals to obtain prescriptions from Canadian pharmacies on an interim basis while FDA gets the new drug importation system up and running.

Under the bill, the FDA is required to issue final regulations for the new system within 90 days of enactment. Under the new importation system, individuals, pharmacies, and drug wholesalers could purchase qualified drugs for import into the U.S. from foreign exporters that register with the FDA. To obtain a registration, a foreign exporter must demonstrate compliance with safety measures, must submit to jurisdiction of U.S. courts, and take other steps to assure safety of imported drugs. A user fee charged to registered exporters would provide the financing needed for FDA to register and oversee foreign drug exporters and ensure the safety of imported drugs.

Q: How will patients get their prescriptions filled at an overseas drug exporter?
A: First of all, consumers that want to have their prescriptions filled at an overseas prescription drug exporter will be able to go to the FDA website and find a list of companies that have passed FDA's requirements to become a registered exporter. Just as for filling a prescription in the U.S. today, the patient must have a valid prescription written by a health care professional licensed in a state to prescribe drugs. The patient will then compare drug prices at the different registered exporters to find the best price available. To get the prescription filled, the patient will have to contact that exporter and either mail or fax the prescription to them.

Alternatively, the registered exporter could call the patient's prescriber and get the prescription over the phone. This is the same process as mail order pharmacies in the U.S. use today.

A pharmacist at the registered exporter would fill the prescription according to the prescriber's instructions. The registered exporter may only fill the prescription with brand-name drugs, meaning these are the same drugs as those approved by the FDA and manufactured by the same company as approved by the FDA for sale in the U.S.

Individuals can also have a prescription filled that is technically not an FDA-approved drug, but the drug must have the same active ingredients, dosage form, strength, and route of administration as the FDA-approved drug and is made by the same manufacturer as the FDA-approved drug. These drugs are manufactured by the same brand-name manufacturer and are made for sale in the market of the approved country.

The registered exporter is required to verify that the drug can be traced back to the original manufacturer and the drug must have been stored and handled properly. The FDA, through its on-site inspectors, will also be verifying that the prescription drugs being dispensed to patients meet FDA's criteria.

Once the prescription is filled, the registered exporter will place a label or other markings on the package for shipping that identify the shipment as being in compliance with FDA's safety requirements and all registration conditions. These markings will be designed by FDA and may include track-and-trace technologies and anti-counterfeiting measures. When the package enters the U.S., that marking will signify to Customs officials that the product was dispensed from a registered exporter and can therefore be permitted to enter the country. Packages with drugs that lack this marking will be seized by Customs and destroyed.

Q: Can the importation of prescription drugs from other countries be expanded?
A: Yes. In the second year of the importation program, HHS would be required to submit a report to Congress on the safety of the program and its impact on trade. Unless Congress acted, the program would be expanded in year three to include importation from the European Union, the European Free Trade Association, Japan, Australia and New Zealand. Other countries that meet specific statutory criteria may also be added to the list.

Q: What is the complete list of countries that would be permitted in the third year of the program?
A: There are currently 15 members of the European Union: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, The Netherlands, and the United Kingdom. Beginning on May 1, 2004, there will be 10 new member states in the European Union: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. There are 4 member countries in the European Free Trade Association: Iceland, Liechtenstein, Norway, and Switzerland.

Q: How much does this program cost?
A: The infrastructure needed to guarantee the safety of the imported prescriptions would be financed through user fees. User fees would be paid by registered exporters, which could be the overseas pharmacies or prescription drug wholesalers, for example. The Congressional Budget Office has not yet officially scored the bill.

Q: Now that the bill is introduced, what comes next?
A: Because the bill contains tax provisions, it has been referred to the Finance Committee. Senate leadership has expressed an interest in developing legislation this year to allow the importation of prescription drugs. Because the bulk of the legislation falls within the jurisdiction of the Health, Education, Labor & Pensions (HELP) Committee, it is expected that HELP will take the lead in reporting any legislation.

Q: How is this bill different than other legislation on importation?
A: While the idea of importation of prescription drugs from foreign countries enjoys broad bipartisan support, the issue of safety continues to remain a major barrier to allowing importation to move forward. Secretaries of HHS from both the Clinton and Bush Administrations have determined that safe importation of prescription drugs cannot be guaranteed with the authority and resources the FDA has today. Many bills presume that importation is safe and that FDA and the public should not be overly alarmed. However, there is a legitimate concern about unsafe pharmaceuticals entering the U.S. every day. Hundreds of thousands of packages enter our country on a daily basis, with little or no ability for the U.S. Customs Service or the FDA to guarantee these drugs are safe and effective. Rather than ignore the safety issue, this bill responds to the concerns raised by FDA and others and creates a way to ensure safe access to lower cost prescriptions.

Q: How does this bill lower the costs of prescription drugs Americans have to pay?
A: United States consumers pay 30 to 300 percent more for their prescriptions drugs than those in other countries. Drug manufacturers are forced to sell their products at lower prices in other countries and try to re-coup their profits by making Americans pay higher prices for the same products. This bill recognizes that competition in the global marketplace can work to lower prescription drug costs. If lower cost pharmaceuticals are made available to Americans, drug companies will be forced to re-think their pricing strategy and won't be able to gouge consumers in the United States.

Q: What mechanisms does the bill propose to guarantee safety?
A: The bill would allow importation of qualified drugs only from registered exporters, whose actions will be held accountable in U.S. federal courts.