President Barack Obama said during his election campaign he would ‘allow Americans to buy their medicines from other developed countries if the drugs are safe and prices are lower outside the US’. He began delivering on this promise with a fiscal 2010 budget request for funds ‘to allow the FDA to begin developing policies for drug importation’.
 
 Earlier in 2009, with strong bipartisan support, Senator Bryon Dorgan (D-ND) re-tabled a bill to allow both personal and commercial drug importation. Obama himself, new White House Chief of Staff Rahm Emanuel and the influential Senator Edward Kennedy were co-sponsors of the identical 2007 version. The new HHS Secretary, Kathleen Sebelius, signed up to a state importation programme when Kansas governor, and has now committed to implementing one at the federal level should the law change.
 
 With public and private payers across the country seeking to save every healthcare dollar to get through the economic recession, Dorgan senses a ‘bit of a tailwind’ behind his proposal this time. His supporters are tackling their critics head on with claims that rather than it being dangerous the measure will actually improve drug safety. Through a legislative manoeuvre, and the help of former presidential hopeful Senator John McCain (R-AZ), Dorgan has obtained a commitment from the Senate Majority Leader to bring his bill to the Senate floor for a vote later in 2009. Drug importation is back on the front burner. Is your company prepared?
 
 The report addresses:
 
 • What is proposed in the Pharmaceutical Market Access and Drug Safety Act of 2009.
 
 • Personal and commercial importation in perspective.
 
 • Answers to the key questions: Will the bill pass and when? If it passes, will it work and how soon? Where might supplies come from and how? Who would buy and use imported drugs in the US? What are the risks? What would be the savings?
 
 • How Canada’s international pharmacy business developed.
 
 • Comparison with parallel trade in Europe
 
 You’ve heard the sound bites, get the facts and analysis from an acknowledged expert on cross-border trade and international online pharmacy. Whether you want to protect your business in the US, assess the potential for becoming a player in what could be a new channel or a supplier to it, or are concerned about the knock-on effects in the 20 countries initially named as potential sources (inc. Australia, Canada, France, Germany, Italy, Japan, Spain and the UK) this report is essential reading. 
 

 Executive Summary
 1. Background to Importation
 1.1 Healthcare Coverage in US
 1.1.1 Employers
 1.1.2 Medicare
 1.1.3 Medicaid
 1.2 US Drug Prices
 1.3 Cost Burden
 1.4 Why Importation?
 1.5. Current Legal Situation with Importation
 1.5.1 Importation by Manufacturers
 1.5.2 Enforcement Discretion with Personal Importation
 
 2. The Rise, Fall and Partial Recovery of International Pharmacies
 2.1 Channel Development in Canada
 2.1.1 Standards
 2.1.2 Customers
 2.1.3 Products
 2.1.4 Savings
 2.1.5 International Pharmacies in Other Countries
 2.1.6 Canadian Backlash
 2.2 Canadian-Foreign Pharmacy Partnership
 2.3 Preventing Seizures at US Border
 2.4 Sales Evolution
 2.5 Factors Contributing to Decline
 2.5.1 Strengthening Canadian Dollar
 2.5.2 Patient Assistance/Drug Discount Programmes
 2.5.3 Non-reimbursement in US
 2.5.4 Manufacturers’ Supply Limitations
 2.5.5 Increased Safety Warnings
 2.5.6 Failure of State-sponsored Importation Schemes
 2.5.7 Greater Generic Use
 2.5.8 Introduction of Medicare Part D
 2.5.9 Stepped-up Seizures at US Entry Ports
 2.6 Current Situation
 
 3. Protagonists in the Importation Debate and their Arguments
 3.1 Views of the Various Stakeholders
 3.2 Arguments
 3.2.1 For Importation
 3.2.2 Against Importation
 3.3 HHS Importation Task Force
 3.4. Congressional Budget Office
 3.5 Miscellaneous Comment
 3.6 Access by Counterfeits
 
 4. Past Legislative and Other Importation Initiatives
 4.1 Initiatives by Members of Congress
 4.1.1 Bills Tabled by Senator Dorgan
 4.1.2 Amendments to Appropriation Bills
 4.2 Initiatives by States and Municipalities
 4.2.1 FDA Reaction
 4.2.2 Response by States
 4.2.3 Patient Uptake
 4.3 Initiatives by Seniors Groups
 
 5. Pharmaceutical Market Access and Drug Safety Act of 2009
 5.1 Principles
 5.2 Main Features
 5.2.1 Qualifying Products
 5.2.2 Permitted Countries
 5.2.3 Relationship to FDA Approval
 5.2.4 Registration
 5.2.5 Exporters
 5.2.6 Importers
 5.2.7 Chain of Custody/Anti-counterfeit Measures
 5.2.8 Labelling
 5.2.9 User Fees
 5.2.10 Information to Consumers/Transparency
 5.2.11 Preventing Countermeasures by Manufacturers
 5.2.12 Patent Exhaustion
 5.2.13 Internet Sales
 5.2.14 Savings
 
 6. Prospects
 6.1 Position of Administration and Legislature
 6.2 Legislative Hurdles
 6.3 Current Status of Dorgan Bill
 6.4 Opposition Strategy
 6.5 If Passed, Would the Act Work?
 6.5.1 Lower Price Opportunity Overseas?
 6.5.2 Where Might Supplies Come From?
 6.5.2.1 Canada
 6.5.2.2 Europe
 6.5.2.3 Japan
 6.5.2.4 Australia/New Zealand
 6.5.3 Who Might Supply the US?
 6.5.4 Regulatory Issues
 6.5.4.1 Manufacturer Notices
 6.5.4.2 User Fees
 6.5.4.3 Chain of Custody
 6.5.4.4 Preventing Countermeasures
 6.5.4.5 IP Rights Exhaustion
 6.6 Who Would Use Commercial Imports?
 6.7 Will Savings Reach Patients?
 6.8 Conclusion
 
 List of tables
 
 1.1 Average foreign-to-Canadian MSP ratios
 1.2 International comparison of basket of MSPs in UK
 1.3 US formulary tiered drug plans
 2.1 Top-10 drug classes sold by Canadian international pharmacies
 2.2 Declared drug sources offered by Canadian international pharmacies
 2.3 Sales into Canadian international pharmacies by province
 2.4 Sales into Canadian international pharmacies by quarter, 2002-08
 2.5 Value of $US in $CDN, 2002-09
 2.6 Drugs not genericized in US sold as generic versions from Canada
 2.7 Consumer costs for 3-months’ supply of common drugs, Q4 2008
 6.1 Canadian MSPs as % of US prices
 6.2 Specimen WAC differentials between US and EU countries, 2009
 6.3 Specimen WAC evolution US vs Europe, 2002-09
 6.4 Drug sales through retail pharmacies in US and permitted countries
 6.5 Examples of European variability of originator brand names
 6.6 Examples of variability of European pack sizes
 
 Glossary of Acronyms and Abbreviations
 
 References
 
 Appendix 1: Bills tabled in US Congress since 1999 relating to drug importation
 
 Appendix 2: House and Senate co-sponsors of the Pharmaceutical Market
 Access and Drug Safety Act of 2009