February 12, 2003

Via Facsimile (504-524-4162) and U. S. Mail
Robert P. Lombardi, Esq.
The Kullman Firm
P. O. Box 60118
New Orleans, L A 70160

Dear Mr. Lombardi:

I write in response to your letter to Mr. Harold Davis of this agency, dated November 8, 2002. In your letter, you state that your firm represents a number of sponsors and/or administrators of employer-sponsored health plans. You raise many questions about potential civil and criminal liability of various parties involved in importing prescription drugs from Canada.

For public health reasons, F D A is very concerned about the importation of prescription drugs from Canada. In our experience, many drugs obtained from foreign sources that purport and appear to be the same as U.S.- approved prescription drugs have been of unknown quality. We cannot provide adequate assurance to the American public that the drug products delivered to consumers in the United States from foreign countries are the same products approved by F D A.

From a legal standpoint, businesses and individuals that are involved in shipping prescription drugs to consumers in the U.S. must take many steps to ensure compliance with the Federal Food, Drug, and Cosmetic Act (the Act). Practically speaking, it is extremely unlikely that a pharmacy could ensure that all of the applicable legal requirements are met.

If parties are involved in violations of the Act, there are many potential avenues of liability. A court can enjoin violations of the Act. A person who violates the Act can also be held criminally liable. Those who can be found civilly and criminally liable under the Act include all who cause a prohibited act. Those who aid and abet a criminal violation of the Act, or conspire to violate the Act, can also be found criminally liable.

Factual Scenario
You ask us about the potential liability of various participants in the following factual scenario:

• A health plan's sponsor amends a health plan to include coverage for prescription drugs purchased outside of the United States.
• The health plan's administrator publicizes this change to plan members.
• A health plan member in the United States obtains a valid prescription from a licensed U.S. physician and forwards the prescription to Expedite-R x, a company that performs technological services for S P C Global Technologies, Ltd. ("S P C"), a claims processing company.
• Expedite-R x receives the prescription, performs certain data entry services and forwards the prescription, along with ancillary patient-protective information, to a licensed pharmacy in Canada.
• In Canada, a Canadian doctor rewrites the prescription.
• A Canadian pharmacy then fills the prescription and ships the drugs directly to the patient in the United States.
• Neither the employer, S P C, nor Expedite-R x handles the drugs.
• Expedite-R x consolidates the plan and patient co-pays and forwards the payment to the Canadian pharmacy.
• The plan will not cover Cipro, "quack" drugs, or controlled substances from a source outside of the United States.

General Legal Framework
The starting point for our analysis is the legal framework applicable to imports of prescription drugs from Canada.[1] First, as your letter notes, even if a prescription drug is approved in the U.S., if the drug is also originally manufactured in the U.S., it is a violation of the Act for anyone other than the U.S. manufacturer to import the drug into the United States (21 U.S.C. § 381(d)(1)). We believe that virtually all drugs imported to the U.S. from Canada by or for individual U.S. consumers also violate U.S. law for other reasons. Generally, such drugs are unapproved (21 U.S.C. § 355), labeled incorrectly (21 U.S.C. § 353(b)(2)), and/or dispensed without a valid prescription (21 U.S.C. § 353(b)(1)). Thus, their shipment into the U.S. from Canada violates the Act. See, e.g., 21 U.S.C. 331(a), (d), (t). [2]

The reason that Canadian or other foreign versions of U.S.-approved drugs are generally considered unapproved in the U.S. is that F D A approvals are manufacturer-specific, product-specific, and include many requirements relating to the product, such as manufacturing location, formulation, source and specifications of active ingredients, processing methods, manufacturing controls, container/closure system, and appearance. 21 C.F.R. ' 314.50. Frequently, drugs sold outside of the U.S. are not manufactured by a firm that has F D A approval for that drug. Moreover, even if the manufacturer has F D A approval for a drug, the version produced for foreign markets usually does not meet all of the requirements of the U.S. approval, and thus it is considered to be unapproved. 21 U.S.C. ' 355.

Virtually all shipments of prescription drugs imported from a Canadian pharmacy will run afoul of the Act, although it is a theoretical possibility that an occasional shipment will not do so. Put differently, in order to ensure compliance with the Act when they are involved in shipping prescription drugs to consumers in the U.S., businesses and individuals must ensure, among other things, that they only sell F D A-approved drugs that are made outside of the U.S. and that comply with the F D A approval in all respects, including manufacturing location, formulation, source and specifications of active ingredients, processing methods, manufacturing controls, container/closure system, and appearance. 21 C.F.R. ' 314.50. They must also ensure that each drug meets all U.S. labeling requirements, including that it bears the F D A-approved labeling. 21 C.F.R. ' 201.100(c)(2). The drug must also be dispensed by a pharmacist pursuant to a valid prescription. 21 U.S.C. ' 353(b)(1).

Your letter mentions that 21 U.S.C. ' 384 would allow drug wholesalers and pharmacists to import prescription drugs from certain countries under certain circumstances. As noted in your letter, however, that section is not in effect. That section would only become effective if the Secretary of Health and Human Services were to certify to Congress that the section's implementation will "pose no additional risk to the public's health and safety" and will "result in a significant reduction in the cost of covered products to the American consumer." 21 U.S.C. ' 384(l). HHS Secretary Tommy Thompson and former HHS Secretary Donna Shalala both declined to make such findings.

F D A's Personal Importation Policy
There has been some confusion about whether F D A's Personal Importation policy changes the law with respect to personal imports of pharmaceuticals. This confusion is reflected in your letter. The Personal Importation policy is used to guide the agency's enforcement discretion with respect to imports by individuals of drugs for their personal use. Under certain defined circumstances, as a matter of enforcement discretion, F D A allows consumers to import otherwise illegal drugs. Under this policy, F D A permits individuals and their physicians to bring into the United States small quantities of drugs sold abroad for a patient's treatment of a serious condition for which effective treatment may not be available domestically. This approach has been applied to products that do not present an unreasonable risk and for which there is no known commercialization and promotion to persons residing in the U.S. A patient seeking to import such a product must also provide the name of the licensed physician in the U.S. responsible for his or her treatment with the unapproved drug product. See F D A Regulatory Procedures Manual, Chapter 9, Subchapter: Coverage of Personal Importations.

However, this policy is not intended to allow importation of foreign versions of drugs that are approved in the U.S., particularly when the foreign versions of such drugs are being "commercialized" to U.S. citizens. (Foreign versions are often what Canadian pharmacies offer to sell to U.S. consumers.) Moreover, the policy simply describes the agency's enforcement priorities. It does not change the law, and it does not give a license to persons to import or export illegal drugs into the United States. Although we must concede that F D A has not often prosecuted those importing illegal drugs into the United States from Canada, F D A reserves the right to do so in the appropriate circumstance.

Potential Liability
As noted in your letter, there are many potential avenues of civil and criminal liability for parties involved in violations of the Act. A court can enjoin violations of the Act. 21 U.S.C. ' 332. A person who violates the Act can also be held criminally liable. 21 U.S.C. ' 333. A misdemeanor violation of the Act is a strict liability offense. See United States v. Dotterweich, 320 U.S. 277, 284 (1943); 21 U.S.C. ' 333(a)(1). A violation that is committed with intent to defraud or mislead or after a prior conviction for violating the Act is a felony. 21 U.S.C. ' 333(a)(2). Separately, it is a felony to knowingly import a drug in violation of the reimport prohibition. 21 U.S.C. '' 333(b)(1)(A), 381(d)(1).

Those who can be found civilly and criminally liable include all who cause a prohibited act. 21 U.S.C. ' 331 ("The following acts and the causing thereof are hereby prohibited"). Those who aid and abet a criminal violation of the Act, or conspire to violate the Act, can also be found criminally liable. 18 U.S.C. '' 2, 371.
Beyond articulating these general principles, we are unable to advise you as to whether, in the factual scenario that you set forth in your letter, Expedite R x, the plan sponsor, the plan administrator, the plan member, SPC, the Canadian pharmacy, or the Canadian doctor could be found liable under one or more of these avenues. We are reluctant to give an advisory opinion, especially because potential liability is a very fact-specific inquiry. However, any party participating in this kind of import plan does so at its own legal risk. Of course, if F D A were to take enforcement action in this scenario, our highest enforcement priority would not be actions against consumers.

Conclusion
I hope that the above discussion is helpful to you. From a public health standpoint, F D A is very concerned about the kind of scenario described in your letter. In our experience, many drugs obtained from foreign sources that purport and appear to be the same as U.S.- approved prescription drugs have been of unknown quality. F D A approves a drug based on scientific data submitted by the drug sponsor to demonstrate that the drug is safe and effective. We cannot provide adequate assurance to the American public that the drug products delivered to consumers in the United States from foreign countries are the same products approved by F D A.

Thank you for your interest in this matter. If you need additional information, please feel free to contact me.

Sincerely yours,
William K. Hubbard
Associate Commissioner for Policy and Planning

Enclosures: Personal Import Policy (Here linked to F D A Regulatory Procedures Manual, Chapter 9, Subchapter: Coverage of Personal Importations)

Footnotes:
[1] We will limit our discussion to drugs imported from Canada because your request is so limited. The legal analysis is the same for drugs imported from any foreign country.
[2] Shipping prescription drugs to consumers in the U.S. may also violate state law because, among other things, many U.S. states require that a pharmacy that ships drugs to a consumer within that state be registered with, or licensed by, the state. Obviously, we cannot analyze state law issues for you.

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