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Reimporting Cheaper US-Made Drugs Is Illegal

Marilyn Serafini November 15, 2017

Drug safety concerns make it a problematic fix for high prices.

This is part of Tarbell’s first series of stories. We won’t be able to tell more without your help.

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If prescription drugs are cheaper in other countries, why not allow Americans to import them? In many cases we’re talking about bringing back drugs that U.S. companies made in the first place.

To be sure, re-importation has long been a popular idea with individuals and some policy makers. But no matter how much politicians promote it, allowing drug imports on any grand scale is unlikely. The reasons? Authorities warn that it just isn’t safe, drug makers have the power to stop it, and experts say it’s a band-aid that would barely put a dent in drug costs.

To be sure, polls show that the public is angry about drug prices, and politicians get political mileage out of proposing re-importation as an easy fix.

More than 15 years ago politicians first began sponsoring bus trips into Canada for seniors and others to buy cheaper drugs. And policy makers continue to pursue this approach. In an August editorial in U.S. News & World Report, Sen. Bernie Sanders, I-Vt., promoted his legislation to allow individuals, pharmacists and wholesalers to import drugs from Canada. He cited the Congressional Budget Office estimate that more than $6 billion in government savings could be achieved over the next decade if the bill were to pass.

It’s no secret that manufacturers often price drugs lower in other countries. Seven of the top eight leading drugs cost more in the United States than overseas, even after rebates, according to Bloomberg News.

In 2004, then-GOP House Speaker Dennis Hastert attempted to level the international playing field by encouraging the U.S. Trade Representative to negotiate higher drug prices overseas. The thought was that getting foreign governments to accept higher prices would enable drug makers to sell their products in the U.S. at lower prices. That effort, however, didn’t have a major or lasting effect.

The Food Drug and Cosmetics Act of 1938 provides that no prescription drug manufactured in the United States and exported can be re-imported into the United States unless the medicine is brought back in by its original manufacturer.

The law stipulates that the Secretary of Health and Human Services (HHS) can re-import a drug if it is deemed necessary for emergency medical care. The secretary must certify that such imports are safe, and none has been willing to do so, beginning with Donna Shalala, the first to have authority under President Bill Clinton.

The primary reason for resistance has been the inability to guarantee safety. When she first announced her decision, Shalala said that it would simply be too costly to build a U.S. system for monitoring the safety of imports – or re-imports - from other countries. Therefore, she indicated, she could not guarantee that the drugs coming in were genuine and safe.

The FDA posts a warning on its website: “Counterfeit medicine is fake medicine. It may be contaminated or contain the wrong or no active ingredient. They could have the right active ingredient but at the wrong dose.”

Like others in the health care industry, big drug companies regularly raise these fears. “Counterfeit drug trafficking is a multibillion dollar business that threatens the health and well-being of patients, says PhRMA on its website. “The World Health Organization estimates 10 percent of medicines worldwide are counterfeit, including up to half of the drugs consumed in developing nations.”

All witnesses at an October 18 hearing of the Senate Health, Education, Labor and Pensions Committee, representing brand drugs, generic drugs, and pharmacists, said they opposed allowing imports, citing safety risks.

The government doesn’t stop individuals from importing personal prescriptions, but imports on a larger scale are prohibited. Most Americans who import drugs drive across the border to Canada or Mexico to get personal prescriptions filled, and then drive back again.

While the FDA is staunchly against drug re-importation, not everyone agrees. AARP is supportive and backed unsuccessful 2011 bipartisan legislation to make cheaper foreign drugs available.

Gil Gutnecht, a former Republican member of Congress from Minnesota, pushed the Pharmaceutical Market Access Act through the House in 2003 to allow imports, but the measure died in the Senate. “Everything pharma says about importation is either grossly exaggerated or patently false,” he says.

Gutknecht fell into the issue by accident at a town hall meeting in his district in 1998 when a constituent asked why she had to drive to Canada to get reasonably priced meds. He didn’t have an answer but started to investigate.

Gutknecht became outspoken on the issue, giving speeches on the House floor and making television appearances. Soon, people from around the world sent him information on the lower prices they paid for medicines. He’s convinced current track-and-trace technology, which most shippers use, could ensure the quality of reimported medications.

“Pharmaceutical companies have used market power to buy political power, and political power to buy more market power, he says. “They hide behind the notion that it’s a free market. It’s not a free market. Markets require real competition and transparency in pricing.”

Polls show solid public support for re-importation, and a strong understanding that the U.S. pays higher prices than other countries. Moreover, politicians get good mileage out of supporting such proposals, said John Rother, president and CEO of the National Coalition on Healthcare. “This is one of the few things you can say about drug pricing that the public gets, because the other things are pretty complicated,” he said. “Allowing importation is a clear and understandable approach.”

Read the rest of Tarbell’s series on Big Pharma and high drug costs.