Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 1 of 70
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
`
`
`
`
`
`PHARMACEUTICAL RESEARCH AND
`MANUFACTURERS OF AMERICA, 950 F
`Street NW, Suite 300, Washington, DC 20004;
`PARTNERSHIP FOR SAFE MEDICINES, 315
`Montgomery St, Suite 900, San Francisco, CA
`94104; and THE COUNCIL FOR
`AFFORDABLE HEALTH COVERAGE, 440
`First Street NW, Suite 430, Washington, DC
`20001,
`
`
`Plaintiffs,
`
`
`v.
`
`
`U.S. DEPARTMENT OF HEALTH AND
`HUMAN SERVICES, et al., 200 Independence
`Avenue SW, Washington, DC 20201; ALEX M.
`AZAR II, Secretary of Health and Human
`Services, 200 Independence Avenue SW,
`Washington, DC 20201, in his official capacity
`only; U.S. FOOD AND DRUG
`ADMINISTRATION, 10903 New Hampshire
`Avenue, Silver Spring, MD 20993; and
`STEPHEN M. HAHN, Commissioner of Food
`and Drugs, 10903 New Hampshire Avenue,
`Silver Spring, MD 20993, in his official capacity
`only,
`
`
`Defendants.
`
`
`
`
`Case No._____________
`
`
`
`
`
`
`COMPLAINT
`
`Plaintiffs Pharmaceutical Research and Manufacturers of America (“PhRMA”), an
`
`association representing the country’s leading innovative pharmaceutical research companies; the
`
`Partnership for Safe Medicines (“PSM”), an association of organizations and individuals with
`
`interests in protecting consumers from counterfeit, substandard, or otherwise unsafe medicines;
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`
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`

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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 2 of 70
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`and the Council for Affordable Health Coverage (“CAHC”), a broad-based advocacy alliance with
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`a focus on increasing competition, bringing down the cost of health care for all Americans, and
`
`expanding private, affordable health insurance coverage, bring this action for declaratory and
`
`injunctive relief. At issue are actions by the Department of Health and Human Services (“HHS”)
`
`and Food and Drug Administration (“FDA”) that would permit pharmacists and wholesalers to
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`import certain prescription drugs from Canada into the United States without drug manufacturers’
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`authorization or oversight, presenting significant safety risks. See 85 Fed. Reg. 62,094 (Oct. 1,
`
`2020) (the “Final Rule”); Alex M. Azar, II, Sec’y, HHS, Letter to Kevin McCarthy, Minority
`
`Leader, U.S. House of Representatives (Sept. 23, 2020) (the “Certification”).1
`
`To ensure the safety of the U.S. drug supply, the Federal Food, Drug, and Cosmetic Act,
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`21 U.S.C. § 301 et seq. (“FDCA”), prohibits entities other than a drug’s manufacturer and entities
`
`authorized by that manufacturer from importing into the United States a drug that is labeled for
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`and exported to another country, with narrow exceptions. Section 804 of the FDCA, 21 U.S.C.
`
`§ 384, authorizes HHS to permit both the importation of drugs by pharmacists and wholesalers for
`
`commercial distribution (“commercial importation”) and the importation of drugs by individual
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`patients (“personal importation”). Section 804 is effective, however, only if the HHS Secretary
`
`certifies to Congress “that the implementation of this section will—(A) pose no additional risk to
`
`the public’s health and safety; and (B) result in a significant reduction in the cost of covered
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`products [(i.e., certain prescription drugs)] to the American consumer.” § 384(l)(1).
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`In light of the risks inherent in importation outside the drug manufacturer’s control and the
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`likelihood that such importation would yield little to no savings for American consumers, HHS
`
`
`1 Available at https://www.safemedicines.org/2020/09/hhs-secretary-sent-congress-the-
`certification-to-allow-canadian-drug-importation.html.
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`
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`2
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 3 of 70
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`Secretaries of both political parties have consistently declined for nearly two decades to certify
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`importation. As recently as May 2018, current HHS Secretary Alex Azar II derided importation
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`as a “gimmick” that would have “no meaningful effect” on drug prices and could not “be safely
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`achieved.” Alex M. Azar II, Remarks on Drug Pricing Blueprint (May 14, 2018).2
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`On the eve of an election, the Secretary has written to Congress to certify that
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`implementation of Section 804’s commercial-importation provisions “poses no additional risk to
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`the public’s health and safety and will result in a significant reduction in the cost of covered
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`products to the American consumer.” Certification at 1. And HHS and FDA (together, the
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`“Agencies”) have promulgated a Final Rule to implement the commercial-importation provisions
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`of Section 804 through “Section 804 Importation Programs” (“SIPs”) sponsored and overseen by
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`States and Tribes. 85 Fed. Reg. 62,094. For the reasons that follow, the HHS Secretary’s
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`Certification is contrary to Section 804 and unsupported by the record, and the Final Rule
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`disregards key protections of the FDCA that are designed to ensure patient safety. In addition,
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`there is no indication that the Final Rule will reduce costs to actual American patients.
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`Furthermore, aspects of the Final Rule are contrary to the FDCA, violate manufacturers’ First
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`Amendment rights, and raise serious questions under the Fifth Amendment Takings Clause.
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`Accordingly, Plaintiffs ask this Court to hold unlawful, set aside, and permanently enjoin
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`implementation of the Certification and Final Rule.
`
`PARTIES
`
`1.
`
`PhRMA is a voluntary, nonprofit association representing the nation’s leading
`
`research-based pharmaceutical and biotechnology companies. PhRMA’s mission is to advocate
`
`
`2
`Available at https://www.hhs.gov/about/leadership/secretary/speeches/2018-speeches/
`remarks-on-drug-pricing-blueprint.html.
`
`
`
`3
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 4 of 70
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`public policies that encourage the discovery of life-saving and life-enhancing medicines. PhRMA
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`serves as the pharmaceutical industry’s principal policy advocate and represents its members’
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`interests before Congress, the Executive Branch, state regulatory agencies and legislatures, and the
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`courts. PhRMA’s members account for approximately 70 percent of the sales of the prescription
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`drugs
`
`in
`
`the United States.
`
` A full
`
`list of PhRMA’s members
`
`is available at
`
`http://www.phrma.org/about/members.
`
`2.
`
`PhRMA’s members are dedicated to discovering medicines that help patients lead
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`longer, healthier, and more productive lives. As explained further below, the Certification and
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`Final Rule directly and adversely affect PhRMA’s members in multiple ways.
`
`3.
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`PSM is a voluntary, nonprofit association made up of associations representing the
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`nation’s leading health care supply chain participants that handle pharmaceuticals from the factory
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`floor to the patient. Representing patients, pharmacists, wholesalers, manufacturers, and families
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`victimized by counterfeit drugs, these associations are committed to the accessibility of safe
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`prescription drugs, and protecting consumers against counterfeit, substandard, or otherwise unsafe
`
`medicines. PSM represents its members’ interests before Congress, state regulatory agencies and
`
`legislatures,
`
`and
`
`the
`
`courts. A
`
`list
`
`of PSM’s members
`
`is
`
`available
`
`at
`
`https://www.safemedicines.org/about-us/members, and includes PhRMA. In addition, PSM
`
`teaches patients and medical professionals how to buy medication safely, and how to avoid
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`criminals’ attempts to infiltrate the closed, secure U.S. drug supply chain.
`
`4.
`
`PSM
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`supports quality assurance programs and establishment of an
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`uncompromising drug distribution system in the hope of reducing the number of counterfeit drugs
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`that render ineffective therapies for alleviating suffering and saving lives. PSM’s unique and
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`groundbreaking research on the spread of counterfeit medicines in America has been cited by U.S.
`
`
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`4
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 5 of 70
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`government agencies, including the Drug Enforcement Administration. Many PSM members are
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`directly involved in procuring, distributing, and selling medications to persons and entities in the
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`United States, and thus stand to be directly and adversely affected by the Final Rule. Indeed, PSM
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`advocates on behalf of individual families that have suffered death due to counterfeit medicines.
`
`5.
`
`Plaintiff CAHC is a broad-based advocacy alliance with a focus on expanding
`
`competition, bringing down the cost of health care for all Americans, and expanding private,
`
`affordable health insurance. Its members include medical providers, patient groups, insurers, retail
`
`pharmacies, pharmaceutical manufacturers, and employers, many of whom will be adversely
`
`affected by the Final Rule. CAHC members believe that the cost of health coverage is too high
`
`and growing too fast. CAHC promotes policies that lower health costs through increased
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`competition, informed consumers, and more choices to help promote access to affordable
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`coverage.
`
`6.
`
`Defendant the U.S. Department of Health and Human Services (“HHS”) is a federal
`
`agency with its headquarters at 200 Independence Avenue SW, Washington, District of Columbia
`
`20201. HHS issued the Certification and Final Rule at issue in this suit.
`
`7.
`
`Defendant Alex M. Azar II is the Secretary of HHS and is ultimately responsible
`
`for HHS’s operations, including the development and implementation of the Final Rule.
`
`Furthermore, under the FDCA, Secretary Azar is principally responsible for, among other things,
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`(a) the Certification at issue in this suit, 21 U.S.C. § 384(l)(1); and, if a Certification is made,
`
`(b) issuing regulations governing the commercial importation of prescription drugs from Canada,
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`id. § 384(b); and (c) waiving prohibitions against personal importation of certain drugs, id.
`
`§ 384(j). Secretary Azar maintains an office in HHS’s Washington, D.C., headquarters, and is
`
`sued in his official capacity only.
`
`
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`5
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 6 of 70
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`8.
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`Defendant the U.S. Food and Drug Administration (“FDA”) is a federal agency
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`located within HHS and headquartered at 10903 New Hampshire Avenue, Silver Spring,
`
`Maryland, 20993. FDA is the primary federal regulator of prescription drugs, among other things.
`
`Along with HHS, FDA issued the Final Rule at issue in this suit.
`
`9.
`
`Defendant Dr. Stephen M. Hahn is the Commissioner of Food and Drugs and is
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`principally responsible for FDA’s operations, including its development and implementation of
`
`the Final Rule and approval of SIPs. Dr. Hahn maintains an office in FDA’s headquarters at White
`
`Oak in Silver Spring, Maryland, and is sued in his official capacity only.
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`JURISDICTION AND VENUE
`
`10.
`
`This action arises under the FDCA, the Administrative Procedure Act, 5 U.S.C.
`
`§ 551 et seq. (“APA”), and the U.S. Constitution. This Court has jurisdiction under 28 U.S.C.
`
`§ 1331 and is authorized to grant declaratory relief under the Declaratory Judgment Act, 28 U.S.C.
`
`§§ 2201–02.
`
`11.
`
`This Court may hear this action under the APA because Plaintiffs seek review of
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`final agency actions—the Certification and the Final Rule—for which there is no other adequate
`
`remedy.
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`12.
`
`Venue in this Court is proper under 28 U.S.C. § 1391(e)(1) because Defendants
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`Secretary Azar and the U.S. Department of Health and Human Services are principally located in
`
`the District of Columbia, and a substantial part of the events or omissions giving rise to the claims
`
`asserted arose in this District. Venue in this Court is also proper because PhRMA resides in this
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`District and no real property is involved in this action.
`
`
`
`6
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 7 of 70
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`STATUTORY AND REGULATORY BACKGROUND
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`I.
`
`THE FDCA CREATES A CLOSED DRUG DISTRIBUTION SYSTEM.
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`13.
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`As HHS has explained, “[t]he drug distribution network for legal prescription drugs
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`in the U.S. is a ‘closed’ system that involves several players (e.g., manufacturers, wholesalers,
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`pharmacies) who move drug products from the point of manufacture to the end user, and provides
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`the American public with multiple levels of protection against receiving unsafe, ineffective, or
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`poor quality medications. This system evolved as a result of legislative requirements that drugs
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`be treated as potentially dangerous consumer goods that require professional oversight to protect
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`the public health. The result has been a level of safety for drug products that is widely recognized
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`as the world’s ‘gold standard.’” HHS Task Force on Drug Importation, Report on Prescription
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`Drug Importation 35 (2004) (“Task Force Report”).3
`
`14.
`
`To maintain the “closed” drug distribution system, which helps ensure that the
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`domestic drug supply is safe and effective, see id., the FDCA limits drug imports into the United
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`States. First, the FDCA prohibits the importation into the United States of drugs that are
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`unapproved, misbranded, and/or adulterated. 21 U.S.C. §§ 331(a), (d), 355(a); see FDA
`
`Information on Importation of Drugs (“interstate shipment . . . includes importation”).4 These
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`provisions apply with equal force to any drugs imported under Section 804. See 21 U.S.C.
`
`§ 384(c)(1) (regulations implementing Section 804 “shall . . . require that safeguards be in place
`
`to ensure that each prescription drug imported under the regulations complies with section 355 of
`
`this title (including with respect to being safe and effective for the intended use of the prescription
`
`
`3
`Available at http://www.safemedicines.org/wp-content/uploads/2018/03/HHS-Report
`1220.pdf.
`4
`Sections 501 and 502 of the FDCA, 21 U.S.C. §§ 351 and 352, define, respectively,
`adulterated and misbranded drugs. Section 505, 21 U.S.C. § 355, prohibits the introduction into
`interstate commerce of unapproved drugs.
`
`
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`7
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 8 of 70
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`drug), with sections 351 and 352 of this title, and with other applicable requirements of this
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`chapter”); see generally 21 U.S.C. § 384 (not exempting drugs from the premarket approval,
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`misbranding, or adulteration provisions of the FDCA). Second, Section 801 of the FDCA also
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`specifically directs that any drugs “being imported or offered for import into the United States”
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`that appear to be unapproved, misbranded, or adulterated “shall be refused admission” to this
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`country. Id. § 381(a)(3). This provision is mandatory, and FDA has “no discretion to make an
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`exception” by allowing the importation of drugs that appear to violate this prohibition. Cook v.
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`FDA, 733 F.3d 1, 8–9, 12 (D.C. Cir. 2013). Section 804 also does not exempt drugs from section
`
`801(a).
`
`15.
`
`Drugs must be approved by FDA before they may be lawfully introduced into
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`interstate commerce in the United States. See 21 U.S.C. §§ 331(d), 355(a). This ensures that any
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`drug that is imported into the United States adheres to the “gold standard” of safety and efficacy
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`expected from FDA-approved drugs. Task Force Report at 10. FDA approval encompasses not
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`only the composition of the drug itself, but also, among other things, the “methods used in, and
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`the facilities and controls used for, the manufacture, processing, and packing of such drug” and
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`the “labeling proposed to be used for such drug,” id. § 355(b)(1), FDA approval of which is
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`necessary to ensure that those drugs are safe for consumers and that prescribers and consumers are
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`adequately apprised of their risks. Any drug not manufactured in accordance with and pursuant to
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`an FDA-approved New Drug Application (“NDA”) or Abbreviated New Drug Application
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`(“ANDA”) is an “unapproved new drug” that may not be introduced to interstate commerce. See
`
`
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`8
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 9 of 70
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`FDA, Div. of Import Ops. & Pol’y, Information on Importation of Drugs (last accessed Oct. 19,
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`2020).5
`
`16.
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`In addition, the FDCA prohibits the misbranding of drugs and the introduction of
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`misbranded drugs into interstate commerce. See 21 U.S.C. § 331(a)–(c). A drug is “misbranded”
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`when, among other things, its “labeling is false or misleading in any particular.” Id. § 352(a)(1).
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`A drug’s labeling can be misleading when it “fails to reveal facts material in the light of such
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`representations or material with respect to consequences which may result from the use” of the
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`drug under its conditions of use. Id. § 321(n); see also 21 C.F.R. §§ 1.21, 202.1(e)(5)(iii). A drug
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`is also “misbranded” “[i]f in package form, unless it bears a label containing . . . the name and
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`place of business of the manufacturer, packer, or distributor.” Id. § 352(b); accord 21 C.F.R.
`
`§ 202.1(a).
`
`17.
`
`The FDCA also prohibits the adulteration of drugs, the introduction into interstate
`
`commerce of adulterated drugs, and the receipt in interstate commerce of adulterated drugs. 21
`
`U.S.C. § 331(a)–(c). A drug is “adulterated” when, among other things, it has been packed or held
`
`under insanitary conditions that may have rendered the drug injurious to health, or its manufacture
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`does not conform to “current good manufacturing practice” (“CGMP”); or if the drug’s strength
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`differs from, or its quality or purity fall below, the standard set forth in an official compendium,
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`or that which the drug purports or is represented to possess. Id. § 351(a)(1)–(2), (b)–(c).
`
`18.
`
`The FDCA also prohibits the importation of foreign-manufactured drugs and the
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`reimportation of drugs that are manufactured in the United States and exported abroad unless the
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`drug is authorized for importation by the drug’s manufacturer or reimported by that manufacturer,
`
`
`5
`Available at https://www.fda.gov/industry/import-program-food-and-drug-administration-
`fda/importations-drugs.
`
`
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`9
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 10 of 70
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`with limited exceptions. A drug subject to 21 U.S.C. § 353(b)(1)—that is, a prescription drug—
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`manufactured outside the United States may be imported for commercial use only if the drug’s
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`manufacturer has authorized the drug to be marketed in the United States and caused it to be
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`labeled accordingly, unless the drug appears on the official drug shortage list, see 21 U.S.C. § 356e,
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`or is imported under Section 804, discussed further below. 21 U.S.C. § 381(d)(1)(B). And a
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`prescription drug that is manufactured in the United States and exported may be reimported into
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`the United States only by the drug’s manufacturer, or pursuant to Section 801(d)(2), 21 U.S.C.
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`§ 381(d)(2) (drugs deemed required for emergency medical care) and Section 804 (certain drugs
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`imported from Canada when the HHS Secretary has made the requisite Certification as to public
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`health and safety and consumer savings). 21 U.S.C. § 381(d)(1); see also id. § 331(t) (prohibiting
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`“importation of a drug in violation of section [801](d)(1)”). Manufacturers invest heavily in
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`seeking and obtaining FDA approval for their drugs and controlling their supply chains to help
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`ensure that the U.S. drug distribution system is “closed.”
`
`II.
`
`BACKGROUND ON CANADIAN DRUGS
`
`19.
`
`Under the Canadian Food and Drugs Act, the production, transportation, and sale
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`of prescription drugs in Canada are primarily regulated by Health Canada. The statutory
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`requirements enforced by Health Canada differ in meaningful ways from U.S. statutory
`
`requirements governing drugs marketed in the United States. For example, Canada does not have
`
`a statute comparable to the Drug Supply Chain Security Act, 21 U.S.C. § 360eee to 360eee-5
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`(“DSCSA”), which establishes robust track-and-trace requirements for prescription drugs
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`throughout the pharmaceutical distribution supply chain. Further, as the Task Force Report
`
`recognized, Health Canada is unlikely to prioritize regulatory oversight of drugs intended for
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`export to the United States. See Task Force Report at 60–61.
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 11 of 70
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`20.
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`Prices that manufacturers can charge for patented medicines in Canada are
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`regulated by the Patented Medicine Prices Review Board, an independent, quasi-judicial body,
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`established under the Canadian Patent Act, that sets maximum permissible drug prices using a
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`complex formula that includes the prices charged for comparable drugs in other countries.6
`
`21.
`
`Because of Canada’s specific pricing regime (among other factors), the retail list
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`prices of certain (but not all) patented medications, as sold in Canada, are lower than the prices of
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`brand-name counterparts, as sold in the United States.7 However, use of generic drugs is much
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`more widespread in the United States than in Canada. In 2015, 88.7% of prescriptions filled in the
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`United States used a generic drug, compared to only 68.6% of Canadian prescriptions. Marv
`
`Shepherd, U.S. Drug Importation: Impact on Canada’s Prescription Drug Supply, Health Econ.
`
`& Outcome Res.: Open Access 3 (2018).
`
`22.
`
`The Canadian market for prescription drugs is significantly smaller than the U.S.
`
`market. In 2015, Canadian physicians wrote fewer than 630 million prescriptions—fewer than
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`one-seventh the more than 4.3 billion prescriptions written in the United States. Id. at 2. As a
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`result, even if the same prescription drugs were actually sold in the United States and Canada,
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`Canada could not come close to satisfying U.S. demand for those drugs. Even assuming that
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`Canadian distributors and pharmacists have ample reserves of drugs on hand and could obtain
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`greater supplies from manufacturers or distributors (respectively), it is estimated that filling only
`
`
`6
`More information about the calculation of maximum drug prices in Canada can be found
`at http://www.pmprb-cepmb.gc.ca/CMFiles/Compendium_Feb_2017_EN.pdf.
`7
`Measuring the difference in retail list prices for patented medications is methodologically
`difficult, as some Canadian drugs have different dosage forms and strength than comparable U.S.
`drugs. Moreover, differences in retail list prices between U.S. and Canadian brand-name
`medications do not necessarily indicate differences in prices paid by U.S. and Canadian
`consumers: Retail list prices do not necessarily incorporate rebates and discounts, and typically
`lower-cost generic medications are much more prevalent and lower cost in the U.S. market than in
`the Canadian market.
`
`
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`11
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 12 of 70
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`10 or 20 percent of U.S. prescriptions in Canada would exhaust the Canadian prescription drug
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`supply in less than a year. Id. at 4–5; Marv Shepherd, The Effect of U.S. Pharmaceutical Drug
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`Importation on Canadian Pharmaceutical Supply, 143 Can. Pharmacists J. 226 (2010).
`
`23.
`
`Indeed, Canada already lacks adequate supplies of prescription drugs to satisfy its
`
`domestic demand. As Canada’s official website for mandatory reporting of drug shortages and
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`discontinuations in that country makes clear, many Canadian drugs are currently in “shortage.”
`
`See Drug Shortages Canada, https://www.drugshortagescanada.ca/. One recent study found
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`shortages in the supply of 13.3% of drug “markets” (comprised of drugs with the same active
`
`ingredient, dosage form, route of administration, and strength). Wei Zhang et al., Factors
`
`Associated with Drug Shortages in Canada: A Retrospective Cohort Study, 8(3) CMAJ Open E535
`
`(2020).
`
`III.
`
`FOR TWO DECADES, HHS REPEATEDLY REFUSED TO AUTHORIZE
`IMPORTATION OF PRESCRIPTION DRUGS UNDER SECTION 804, DUE TO
`SAFETY RISKS AND COST.
`
`A.
`
`24.
`
`HHS DECLINED TO ALLOW IMPORTATION UNDER THE MEDS ACT.
`
`In 2000, Congress enacted the Medicine Equity and Drug Safety (“MEDS”) Act,
`
`which added Section 804 to the FDCA. Pub. L. 106-387, § 745, 114 Stat. 1549, codified as
`
`amended at 21 U.S.C. § 384. The MEDS Act directed the Secretary of HHS, in consultation with
`
`the U.S. Trade Representative and Commissioner of Customs, to “promulgate regulations
`
`permitting pharmacists and wholesalers to import into the United States covered products,”
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`consisting of prescription drugs other than biologicals and certain controlled substances, and
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`subject to regulations intended, among other things, to protect public health. § 384(a), (b),
`
`(k)(1)(A) (2000). The MEDS Act provided, however, that these provisions would “become
`
`effective only if the Secretary [of HHS] demonstrates to the Congress that the implementation of
`
`
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`Case 1:20-cv-03402 Document 1 Filed 11/23/20 Page 13 of 70
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`[§ 384] will—(1) pose no additional risk to the public’s health and safety; and (2) result in a
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`significant reduction in the cost of covered products to the American consumer.” § 384(l) (2000).
`
`25.
`
`On December 26, 2000, then-HHS Secretary Donna Shalala stated in a letter to
`
`President Clinton that “flaws and loopholes in the design of the new drug reimportation system
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`. . . . undermine[d] the potential for cost savings associated with prescription drug reimportation
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`and could pose unnecessary public health risks.” Letter from Sec’y Donna E. Shalala to Pres.
`
`William J. Clinton (Dec. 26, 2000), reprinted at Cong. Rec. S6910 (daily ed. July 17, 2002)
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`(statement of Sen. Cochran). Among other things, Secretary Shalala noted that Congress had
`
`appropriated money to implement the provision in the first year but not to fund the increased
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`monitoring and enforcement that would be required during the anticipated five-year life of the
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`program “to implement [it] in a way that protects the public health.”
`
`26.
`
`On July 9, 2001, then-HHS Secretary Tommy Thompson likewise declined to
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`certify importation under § 384(l), noting that “[a]fter a thorough review of the law, FDA has
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`concluded that it would be impossible to ensure that the MEDS Act would result in no loss of
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`protection for the drugs supplied to the American people.” Letter from Sec’y Tommy G.
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`Thompson to Sen. James Jeffords (July 9, 2001), reprinted at Cong. Rec. S6910–11 (daily ed.
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`July 17, 2002) (statement of Sen. Cochran). Secretary Thompson observed that opening the
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`currently closed U.S. drug supply chain to drugs imported from abroad “would increase the
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`likelihood that the shelves of pharmacies in towns and communities across the nation would
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`include counterfeit drugs, cheap foreign copies of FDA-approved drugs, expired drugs,
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`contaminated drugs, and drugs stored under inappropriate and unsafe conditions.” Such drugs
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`would be difficult to detect, and even chain-of-custody documentation and the sampling and
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`testing of imported drugs could not eliminate the increased “public health risk . . . and a loss of
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`confidence by Americans in the safety of our drug supply” and would tax FDA’s oversight and
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`enforcement resources.
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`B.
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`HHS DECLINED TO ALLOW IMPORTATION UNDER THE MMA.
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`1.
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`The MMA Creates the Section 804 Importation Framework.
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`27.
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`Congress subsequently enacted the Medicare Prescription Drug, Improvement, and
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`Modernization Act of 2003, which replaced the MEDS Act’s importation provisions with Section
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`804 in substantially the same version that exists today. Pub. L. 110-329, 117 Stat. 2066, 2464
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`(“MMA”).8
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`28.
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`As with the MEDS Act, these provisions do not take effect automatically. Instead,
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`Congress retained the balance it struck in the MEDS Act: The Executive Branch could authorize
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`importation of certain drugs, but only if the HHS Secretary can certify that implementation of
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`Section 804 meets the exacting standard in the statute—i.e., that implementation of this section
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`“will—(A) pose no additional risk to the public’s health and safety; and (B) result in a significant
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`reduction in the cost of covered products to the American consumer,” and subject to a variety of
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`additional statutory requirements and conditions. 21 U.S.C. § 384(l)(1). Congress thus continued
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`to take a highly protective position with respect to public health and safety, specifying that
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`importation would be authorized only if the HHS Secretary affirmatively found that it could be
`
`
`8
`The MMA amended Section 804 in several respects, including by limiting imports to drugs
`from Canada, 21 U.S.C. § 384(b); requiring importers to certify that the imported drugs are not
`adulterated or misbranded, § 384(d)(1)(K)(i); requiring Canadian sellers to register with the U.S.
`Government, § 384(f); requiring drug manufacturers to allow importers to use FDA-approved
`labeling at no cost, § 384(h); giving the HHS Secretary authorities with respect to personal as well
`as commercial importation, § 384(j); requiring the Secretary to “certify” to Congress (not simply
`“demonstrate”) the economic benefits and lack of health risks of importation to certify the statute,
`§ 384(l); and replacing the MEDS Act’s provision that this section would sunset five years after it
`was implemented, see § 384(m) (2000), with the provision that the Secretary may render the
`section ineffective by certifying to Congress that the benefits of implementation do not outweigh
`its costs, § 384(l)(2).
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`implemented in a way that significantly reduces the cost of prescription drugs for consumers
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`without even slightly compromising public health and safety.
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`29.
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`Should a valid certification take effect, the MMA, like the MEDS Act, directs the
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`Secretary of HHS, after consultation with the U.S. Trade Representative and the Commissioner of
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`U.S. Customs and Border Patrol, to “promulgate regulations permitting pharmacists and
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`wholesalers to import prescription drugs from Canada into the United States.” § 384(b).9
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`30.
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`These commercial-importation regulations must, among other things, “require that
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`safeguards be in place to ensure that each prescription drug imported . . . complies with [§] 355
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`(including with respect to being safe and effective for [its] intended use)” and with FDCA
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`provisions regarding adulterated and misbranded drugs, § 384(c)(1); and must “contain any
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`additional provisions determined by the Secretary to be appropriate as a safeguard to protect the
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`public health,” § 384(c)(3).
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`31.
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`The MMA also requires the importer of a prescription drug from Canada to submit
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`to HHS specified information about the drug. This information includes not only certain
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`information about the drug (such as the name and quantity of the drug’s active ingredient and the
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`process by which the drug was produced), § 384(d)(1), but also a “[c]ertification from the importer
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`or manufacturer of the prescription drug that the prescription drug—(i) is approved for marketing
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`in the United States and is not adulterated or misbranded; and (ii) meets all labeling requirements
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`under this chapter,” § 384(d)(1)(K).
`
`
`9
`The definition of “prescription drug” excludes controlled substances, biological products,
`infused drugs, intravenously injected drugs, drugs inhaled during surgery, and certain parenteral
`drugs if the Secretary makes a finding that such parenteral drugs pose a public health threat.
`§ 384(a)(3).
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`32.
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`The MMA also states that a prescription drug manufacturer “shall provide an
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`importer written authorization for the importer to use, at no cost, the approved labeling for the
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`prescription drug.” § 384(h).
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`33.
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`In addition to creating a procedure by which the HHS Secretary can legalize
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`commercial importation of certain prescription drugs from Canada, the MMA also contains several
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`provisions relating to importation of prescription drugs by individuals. Most notably, Section
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`804(j)(2)–(3) authorizes the Secretary to grant individuals waivers of the prohibition against
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`importation of prescription drugs; directs the Secretary to issue guidance describing when HHS
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`will consistently grant case-by-case waivers; and directs the Secretary to issue regulations granting
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`individual waivers to import prescription drugs from Canada under specified circumstances and
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`under such other conditions as the Secretary determines to be necessary to ensure public safety.
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`34.
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`The MMA did not