A recent development with the Food and Drug Administration made us think of a song lyric from Florida native and Rock and Roll Hall of Famer, Tom Petty, “What lies ahead, [we] have no way of knowing.” As a kick-off to 2024, FDA authorized its first section 804 importation program (“SIP”), a program allowing Florida to import certain prescription products from Canada. FDA may authorize an SIP as a pathway to reduce costs to consumers if it does not impose additional risk to public health and safety. As the first program of its kind, many eyes will be on Florida’s enactment of this plan, as other states consider how or whether to adopt a similar program. There are many open questions about Florida’s operation of the program, which has met much opposition from industry, including reports of a potential lawsuit from the Pharmaceutical Research and Manufacturers of America (“PhRMA”).

In this Bulletin, AGG will give a general overview of SIP requirements, provide some further detail surrounding Florida’s approved SIP, and offer our observations on this development.

What Is the SIP Pathway?

• Section 804 (21 U.S.C. 384) of the Federal Food, Drug, and Cosmetic Act provides a pathway for states and Indian tribes to allow importation of “eligible prescription drugs” from Canada.
• Programs under this pathway must significantly reduce the cost of these drugs to the American consumer, without imposing additional risk to public health and safety.
• An “eligible prescription drug” is defined, in part, as:
  • “[A] drug subject to section 503(b) of the Federal Food, Drug, and Cosmetic Act that has been approved and has received a Notice of Compliance and a Drug Identification Number (DIN) from the Health Products and Food Branch of Health Canada (HPFB) and, but for the fact that it deviates from the required U.S. labeling, also meets the conditions in an FDA–approved new drug application (NDA) or abbreviated new drug application (ANDA) for a drug that is currently commercially marketed in the United States, including those relating to the drug substance, drug product, production process, quality controls, equipment, and facilities.”¹
  • This term does not include controlled substances, biological products, infused drugs, intravenously injected drugs, drugs inhaled during surgery, intrathecally or intraocularly injected drugs, drugs subject to a risk evaluation and mitigation strategy, or drugs that are not “products” for purposes of the Pharmaceutical Distribution Supply Chain statute.
• This pathway has been available for some time, but Florida is the first state to obtain approval from FDA for its program.

What Does This Mean for Florida, and How Has Industry Responded?

• FDA’s approval covers Florida’s SIP for two years from the date FDA is notified of the first shipment of drugs to be imported.
• Before drugs can be imported, Florida’s Agency for Health Care Administration must:
  • provide additional drug-specific information for FDA review and approval;
  • ensure that the drugs have been tested for, among other things, authenticity and compliance with the FDA-approved drugs’ specifications and standards;
  • relabel the drugs to be consistent with the FDA-approved labeling; and
  • submit a quarterly report to FDA that includes information about the imported drugs, cost savings, and any potential safety and quality issues.
• Florida’s proposed SIP still raises several questions about the practical implementation of the program.
• Many in the pharmaceutical industry have expressed concerns regarding the potential risk that unapproved products may have for consumers and the quality of these imported products.²
• Notably, several pharmaceutical and health organizations filed a supplement to a prior Citizen Petition, outlining why FDA should refrain from authorizing FDA’s SIP proposal, which was denied by FDA.
  • In its denial letter, FDA defended its review of the program, outlining how it found that Florida’s proposal met regulatory requirements and acknowledging related concerns raised by the organization, often referencing amendments the state made to its original proposal.³
  • FDA further provided that certain information in the proposal could be protected from disclosure requirements as confidential business information.
• PhRMA, one of the organizations involved with the Citizen Petition, is reportedly planning to file suit against this program.

AGG Observations

• At this time, we do not know when the first imported drugs may arrive in Florida or which drugs products may be included in the SIP.
• Several other states are considering this pathway. They will be keeping an eye on Florida’s implementation and whether this could be a viable option for them.
• The U.S. has often been criticized for having higher drug prices as compared to other countries, but industry is not so sure that these programs will meet the goal of offering more cost-effective options.
• The importation of unapproved products raises several safety and quality concerns, which we can expect will be litigated by interested industry groups.
• To bring it back to Mr. Petty’s song lyric, “What lies ahead, [we] have no way of knowing,” as we track this development to see if Florida sets the trend, for better or for worse.

[1] 21 C.F.R. § 251.2.

[2] For example, PhRMA has published an item expressing its concerns, available here: https://phrma.org/Blog/Floridas-importation-plan-puts-patients-in-danger.

[3] The full denial letter, as well as the Citizen Petition and its supplement, can be found at the following docket: FDA-2021-P-0034, https://www.regulations.gov/docket/FDA-2021-P-0034.