What a state has to file before it can import a drug

One seller, one importer, one proposal

The application for a drug importation program begins with a constraint on its own size.

A sponsor "must only designate one Foreign Seller and one Importer per initial proposal." More can be added later, but only through a supplemental proposal.

A sponsor may delegate implementation work to a co-sponsor, and stays responsible for overseeing implementation either way.

The proposal is filed electronically and has four parts: a cover sheet, a table of contents, an introductory overview, and the importation plan itself.

One requirement on the cover sheet is easy to miss and hard to work around. "The signatory must reside or have a place of business within the United States", and the cover sheet has to carry that person's name, title and business address.

The overview names every link before anything moves

The overview is a roster of the entire chain, written before a single package exists.

It names the program and the sponsor and co-sponsors, the responsible individuals with contact details, and each drug with its Canadian drug identification number.

It names the holder of the approved United States application for each drug's counterpart, with the application number.

It names the manufacturer of the finished dosage form, and the manufacturer of the active ingredients, in each case if known or reasonably known.

It names the foreign seller and attaches a copy of that seller's Canadian establishment license, and names the importer.

Where a separate registered repackager or relabeler will do the relabeling, it is named too, with evidence of registration and of satisfactory resolution of any objectionable conditions found at its most recent inspection.

Then a summary of how the sponsor will ensure five things. The testing requirements are met, the supply chain is secure, the labeling requirements are met, and the post-importation duties are met. The fifth is that "The SIP will result in a significant reduction in the cost to the American consumer".

The disclosures a sponsor cannot decline to make

The importation plan carries three background disclosures, and they reach further than most licensing paperwork does.

The first is an attestation and information statement containing "a complete disclosure of any past criminal convictions or violations of State, Federal, or Canadian laws regarding drugs or devices". It covers convictions against or by the responsible individuals, the foreign seller or the importer, or an attestation that there have been none.

The people covered are listed. Principals, directors, officers, any facility manager or designated representative, and "any shareholder who owns 10 percent or more of outstanding stock in any non-publicly held corporation".

The second is a list of all disciplinary actions imposed by state, federal or Canadian regulators, with dates and parties. It covers the same set of people plus owners and the quality unit, "for the previous 7 years prior to submission of the SIP Proposal."

The third is inspection history. Five years of Canadian inspection history for the foreign seller, and five years of state and federal inspection history for the importer. Where either has been licensed for less time, the full period of licensure applies.

Read together, that is a documented seven-year discipline record and a five-year inspection record on every named participant, filed before authorization.

Proving the drug is the same drug

The plan has to identify each drug by proprietary name where there is one, established name, and approved application numbers. Both the Canadian and United States product codes go in, for the imported drug and its approved counterpart.

It has to provide adequate evidence that the counterpart drug is currently commercially marketed in the United States. A discontinued product cannot anchor an import.

It has to describe, as far as possible, the testing that will establish the Canadian drug meets the conditions in the approved counterpart's application. Where the importer is responsible for that testing, the plan identifies the qualifying laboratory doing it.

And it has to do a labeling exercise that is the clearest test in the whole filing.

The plan includes the approved labeling for the counterpart and the proposed labeling for the imported drug. It also includes "a side-by-side comparison of the FDA-approved labeling and the proposed labeling", covering prescribing information, carton and container labeling, and patient labeling.

The comparison is not a formality. It has to be presented "with all differences annotated and explained." The Canadian approved labeling goes in as well.

The cost claim has to be falsifiable

The last element of the plan is an explanation of how the program will produce a significant reduction in cost to the American consumer.

What makes it unusual is the standard attached. "The explanation must include any assumptions and uncertainty, and it must be sufficiently detailed to allow for a meaningful evaluation."

That is a rule against an unsupported saving claim, written into a federal regulation.

It is worth holding next to how savings are described in consumer-facing marketing generally. Here the assumptions have to be stated and the uncertainty has to be stated, because someone else is going to check.

Review, and the many ways it ends in no

The agency may authorize, modify or extend a program that meets the requirements. A phased review exists for a proposal that has not yet identified a foreign seller.

That path has a deadline. Importer, relabeler and repackager information still has to be in the initial submission, and "the SIP Proposal will be denied if a Foreign Seller is not identified within 6 months of the initial submission date".

The denial provision then says something worth reading carefully. Even where a proposal meets the requirements of the part, "FDA may nonetheless decide not to authorize the SIP Proposal".

The examples given include potential safety concerns and the degree of uncertainty about protecting public health. They also include the relative likelihood that the program would not produce significant savings, and the potential for conflicts of interest. The last is limiting the number of authorized programs so the agency can carry out its responsibilities within the resources allocated.

The agency acknowledges receipt in writing, makes a reasonable effort to flag missing required information promptly, may ask for more, and notifies the sponsor in writing of the decision either way.

Every shipment needs its own permission

Authorization of the program is not authorization to import. A drug may not be imported unless the importer has filed a pre-import request for it and the agency has granted that request.

The filing window is fixed: "at least 30 calendar days prior to the scheduled date of arrival or entry for consumption, whichever occurs first".

The request identifies the importer, including business type as wholesale distributor or pharmacist, its state licences, and its facility identifier.

It identifies the program and the foreign seller, with the seller's Canadian license numbers.

For each drug it gives both names, the Canadian identification number and a complete product description. It also gives the active ingredient with its manufacturer and facility identifier and the amount per unit, and the approved counterpart with its application number.

It attaches the invoice and other documents from the manufacturer's sale to the foreign seller, in both the versions the importer received.

And it reconciles quantities. The amount being imported, by dosage form, strength and lot, is compared against the quantity of each lot the foreign seller originally received from the manufacturer. The date of that receipt goes in, plus expiration dates by lot.

The seller has to be registered, and stay registered

A foreign seller named in a proposal has to be registered with the agency before the proposal can be authorized.

Registration gathers ownership and identity. The owner or operator, each partner or each corporate officer and director with the place of incorporation, and every name the seller trades or is known under. Then the physical address and telephone numbers, a unique facility identifier, and all types of operations performed.

It also names the official contact, the United States agent, the importer the seller plans to sell to, and each program sponsor the seller works with.

Changes are not annual. A seller must update registration "no later than 30 calendar days after" closing or being sold, changing its name or physical address, or changing the contact details of the official contact or the agent.

A control sits inside that: anyone may notify a change of details for those roles, but only the seller may designate a new official contact or agent.

There is also an annual review in the last quarter of each calendar year. If nothing changed, "a Foreign Seller must certify that no changes have occurred."

The agent cannot be a mailbox

Two named roles carry the communication burden, and the rules on them are specific.

The official contact is responsible for the accuracy of the registration information, and for reviewing, disseminating, routing and responding to all agency communications, including emergency ones.

The United States agent has to reside or maintain a place of business in the country. The agent "may not be a mailbox, answering machine or service, or other place where a person acting as the U.S. agent is not physically present."

That agent handles all agency communications, answers questions about the drugs imported or offered for import, and has a third duty stated on its own: "Assisting FDA in scheduling inspections."

And service on the agent counts. Providing information or documents to the agent "is equivalent to providing the same information and/or documents to the Foreign Seller."

Inspection consent, suspension, and the nine grounds for revocation

Participation is conditioned on being inspectable. Sponsors and other participants "must agree to submit to audits of their books and records and inspections of their facilities as a condition of participation".

Refusing has an immediate consequence. Where any participant delays, denies or limits an inspection, or refuses entry, inspection or audit, the agency may suspend the program in whole or in part immediately.

While suspended or revoked, a drug cannot be shipped in under the program and is subject to refusal of admission.

Nine grounds support revocation, in whole or in part, at any time. The first two go to the filing itself: "The SIP Proposal contained an untrue statement of material fact", and that it omitted material information.

Others cover the program no longer meeting the requirements, including a participant being found noncompliant with the manufacturing quality provisions of the statute. Another is continued implementation being reasonably likely to pose additional risk to public health and safety. Another is confidential manufacturer information having been disclosed in violation of the rules.

Several are practical. No longer reasonably likely to produce significant cost reduction. Monitoring imposing too much burden on agency resources, or conflicting with resource prioritization. Continued implementation otherwise being inappropriate, or grounds for suspension existing.

Changing anything, extending anything, reporting everything

Modification and extension run through supplemental proposals, reviewed under the same part, and the agency may take account of what it learned after the original authorization.

Additional sellers or importers can be added where the sponsor adequately demonstrates consistent compliant importing. But the structural limit does not move: "Each supply chain under a SIP must be limited to one manufacturer, one Foreign Seller, and one Importer."

Authorized changes reset the shipment paperwork. The importer has to file a new pre-import request.

And unilateral change is barred outright. "A SIP Sponsor must not make any changes or permit any changes to be made to a SIP without first securing FDA's authorization."

Extensions are requested "at least 90 calendar days before the SIP's authorization period will expire". They are available only to a program up to date on all information and records requirements, and may run for up to two years at a time.

Once importing has begun, the sponsor files a quarterly report electronically. Where that report says it is transmitted on the importer's behalf to satisfy the importer's own duty, the importer need not file the same information separately.

What a reader should take from all this

The filing described here is the closest thing in American drug regulation to a full disclosure of a supply chain before it operates.

Named participants. Seven years of discipline. Five years of inspections. Criminal history including significant private shareholders. An annotated label comparison. A savings case with its assumptions and uncertainty written down.

That is the benchmark worth carrying into any claim about cheaper imported medicine. Where none of that paperwork exists, the comparison is not to this program.

One limit on this article. Nine sections of part 251 were read in full for this piece, and the definitions section was not re-read. The statute behind the program, and the testing and labeling sections covered elsewhere, were not examined here.

No view is stated here on whether any importation program has been authorized, is operating, or has been suspended. It describes what the regulation requires of one.

Sources

Each document below is named as it names itself, with the date printed on that document rather than the day it was read.

1. Title 21 Code of Federal Regulations section 251.3, SIP proposal submission requirements, read in full for the one-seller-one-importer limit, the cover sheet signatory rule, the overview contents, the criminal and disciplinary disclosures, the inspection histories, the annotated label comparison and the cost-saving explanation standard — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
2. Title 21 Code of Federal Regulations section 251.4, Review and authorization of importation program proposals, read in full for the phased review, the six month seller deadline and the discretionary denial grounds — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
3. Title 21 Code of Federal Regulations section 251.5, Pre-Import Request, read in full for the thirty day filing window and the identification, documentation and quantity reconciliation requirements — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
4. Title 21 Code of Federal Regulations section 251.7, Suspension and revocation of authorized importation programs, read in full for the inspection consent condition, immediate suspension and the nine revocation grounds — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
5. Title 21 Code of Federal Regulations section 251.8, Modification or extension of authorized importation programs, read in full for the supply chain limit, the no-unilateral-change rule, the ninety day extension request and the two year extension period — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
6. Title 21 Code of Federal Regulations section 251.9, Registration of Foreign Sellers, read in full for the pre-authorization registration requirement and the eight categories of registration information — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
7. Title 21 Code of Federal Regulations section 251.10, Reviewing and updating registration information for Foreign Sellers, read in full for the thirty day expedited updates and the annual review and certification — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
8. Title 21 Code of Federal Regulations section 251.11, Official contact and U.S. agent for Foreign Sellers, read in full for both roles, the physical presence requirement and the equivalence of service — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
9. Title 21 Code of Federal Regulations section 251.19, Reports to FDA, read for the quarterly reporting duty and the substitution for the importer's separate obligation — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020