Buyer Beware: Re-imported and Foreign-sourced Prescription Drugs

Posted By American Med Spa Association, Friday, November 20, 2015

By Benjamin L. England, Esq.
Similar to prescription medical devices, imported and reimported prescription drugs frequently present an attractive alternative to the domestic product because of the much lower price points. For instance, drugs such as Botox and Dysport are regulated by the U.S. Food and Drug Administration (FDA) as combination prescription drugs and cosmetics. The FDA's drug regulatory authority requires the drugs be approved prior to sale or distribution in the United States.

The analysis for importing or reimporting prescription drugs is much simpler than prescription devices. To begin, it is illegal to reimport a U.S.-made prescription drug. In 1988, Congress passed the Prescription Drug Marketing Act, which expressly prohibits reimportation of a prescription drug by anyone other than the U.S. manufacturer. Although through the MEDS Act of 2000, Congress attempted to permit importation of prescription drugs, it was never implemented because of a "poison pill" added to the language just before the final vote, which gutted the legislation. The conditions established by the amended language have never come to fruition, so the permission to import prescription drugs died on the vine.

Importing foreign-sourced prescription drugs is legal, but very difficult to do correctly if the drug was originally intended for a foreign market, such as Canada, Mexico or the European Union. In most cases, the due diligence necessary to make certain you do not run afoul of the intense statutory and regulatory controls is so expensive, it consumes the savings you might have enjoyed from the price arbitrage. As a result, in our experience, no one does it correctly, and many are prosecuted criminally for doing it incorrectly.

Buyers of imported foreign-sourced prescription drugs must be extremely careful and exercise rigorous due diligence prior to the transaction. The products may be counterfeit versions of FDA-approved drugs, or they may be legitimate-but-unapproved versions that are not allowed for sale in the United States. They also may have been improperly stored or handled while moving through third party international supply chains. In these instances, FDA and/or Customs could take a series of enforcement actions against the importer, the drug manufacturer, or later purchasers and marketers of the drugs.

The FDA evaluates many imported drugs to make sure they are permissible for sale in the United States. But just because a drug gets through the FDA or Customs does not mean that the drug can be legally received, sold, distributed or used in the United States. The burden for ensuring a drug is legal always falls on the persons selling, buying, importing and using it. An FDA import release will not shield anyone from an enforcement action.

What to be concerned about.

1. Is the drug legitimate or is it counterfeit? (Counterfeit in the case of drugs can mean it was made, processed, packed, repacked, or labeled by someone different than what is declared on the drug's label - it could be authentic product but counterfeit because of the label). 
2. Is the drug formulated the same as the FDA-approved version? 
3. Is the drug from an FDA-approved (and registered) facility? 
4. Did the facility list the drug correctly? 
5. Does the drug bear the proper labeling approved for the United States?

So the first rule is to NOT reimport a prescription drug made in the United States. That is illegal. The second is to not import foreign-sourced prescription drugs without getting help, because the degree of necessary due diligence is extremely high.