Pharm. Research & Manufacturers of Am. v. Dep't of Health & Human Servs.
| Decision Date | 06 February 2023 |
| Docket Number | Civil Action 20-3402 (TJK) |
| Court | U.S. District Court — District of Columbia |
| Parties | PHARMACEUTICAL RESEARCH & MANUFACTURERS OF AMERICA et al., Plaintiffs, v. DEPARTMENT OF HEALTH & HUMAN SERVICES et al., Defendants. |
The Department of Health and Human Services is considering allowing prescription drugs to be imported from Canada under a statute that has lain dormant for decades. Plaintiffs, a collection of organizations with various interests in American healthcare, say that decision would be mistaken and that it was started by unlawful processes. But no organization, nor any of their members, faces a concrete risk of harm from the inchoate importation program, as is required when suing. So the Court must dismiss this case for lack of standing.
The challenged agency action is the first step on a path to legal importation of prescription drugs. To contextualize that development, the Court begins by explaining why it is significant. The Court is resolving a motion to dismiss, so the facts below are drawn from Plaintiffs' complaint.
Congress has prohibited the introduction of new drugs into interstate commerce without approval from the Food and Drug Administration. See 21 U.S.C. §§ 331(d), 355(a). The FDA considers many factors before approving a prescription drug, including evidence of its safety and efficacy, its “composition,” the method of its “manufacture, processing, and packing,” and its proposed labeling. See id. § 355(b)(1)(A). A drug may not be introduced if it is “adulterated or misbranded.” Id. § 331(a).
The FDA's approval is tied to a particular production-and-distribution process. A drug is not approved if it the manufacturer uses “unapproved production lines,” even if the same facility produces another version of the same drug that is approved. See HHS Task Force on Drug Importation, Dep't of Health & Hum. Servs., Report on Prescription Drug Importation 3-4 (2004) (“HHS Drug Importation Report”). Such drugs likely share “significant similarities” with approved drugs, but they do not meet the exacting standards of FDA approval. See id. at 4.
Thus, the FDA has historically recognized only two ways to import prescription drugs legally. The first is to make the drug in a foreign-but-FDA-inspected facility and complete the ordinary approval process. See HHS Drug Importation Report at 3. The second is to make an approved drug in the United States, send it abroad, and reimport it. See id. The latter method requires the importer to be the original manufacturer. 21 U.S.C. § 381(d)(1)(A).
Proper labeling is another obstacle to importing prescription drugs. A drug's label must not be “false or misleading in any particular.” See 21 U.S.C. § 352(a)(1). And an approved application for a new drug is based in part on “[t]he proposed text of the labeling” to be used. See 21 C.F.R. § 314.50(c)(2)(i). But “foreign labeling differs from domestic labeling.” In re Canadian Import Antitrust Litig., 470 F.3d 785, 790 (8th Cir. 2006). For that reason alone, even a foreign drug that is otherwise identical to an approved, domestic drug cannot be imported without special authorization. Id. at 790-91.
Moreover, the domestic drug supply chain is strictly monitored. See generally 21 U.S.C. § 360eee-1. Drug wholesalers and dispensers must, among other things, verify that the drugs they carry have unique product identifiers, that they have a product's transaction history, and that they trade only with approved partners. Id. § 360eee-1(c)(1)(A)(i), (c)(2)-(3), (d)(1)(A)(i), (d)(2)-(3). The idea, as the Eighth Circuit has explained, is to maintain a “closed system designed to guarantee safe and effective drugs for consumers in the United States.” Canadian Import, 470 F.3d at 790 (quotation omitted). And that closed system “has effectively precluded importation of [prescription] drugs.” Id. at 791.
Congress has, however, laid the groundwork for cutting through that red tape. It enabled HHS to promulgate “regulations permitting pharmacists and wholesalers to import prescription drugs from Canada into the United States.” 21 U.S.C. § 384(b). That authorization is subject to several limitations, including those related to testing of imported drugs and modified labeling, as well as many requirements that apply to applications for new domestic drugs. See id. § 384(c), (e), (h).
More importantly, that authorization is subject to a precondition. The statute “shall become effective only if the Secretary [of Health and Human Services] certifies to the Congress that the implementation” will satisfy two criteria. 21 U.S.C. § 384(l)(1). Importation from Canada must both “(A) pose no additional risk to the public's health and safety; and (B) result in a significant reduction in the cost of covered products to the American consumer.” Id.
Several HHS Secretaries have declined to certify those conclusions. The first HHS Secretary to consider the problem explained to Congress, [1] Similarly, in 2004, an HHS task force concluded that “[l]egalized importation of drugs in such a way that creates an opening in the ‘closed' system will likely result in some increase in risk.” HHS Drug Importation Report at 35. And in 2018, HHS Secretary Alex Azar derided drug importation as a “gimmick” that would “have no meaningful effect” on drug prices.[2]
The statutory drug-importation scheme has thus lain dormant for most of its history, and importing drugs from Canada or elsewhere has remained effectively illegal.
The challenged agency action began a potential change to that status quo. In 2019, HHS proposed partially implementing the drug-importation statute. See generally Importation of Prescription Drugs, 84 Fed.Reg. 70796 (Dec. 23, 2019) (“NPRM”). Its proposal was to “allow commercial importation of certain prescription drugs from Canada through time-limited programs sponsored by at least one non-federal governmental entity.” Id. at 70798. That implementation is partial in one sense because the statute contemplates individual-not just commercial-importation. See 21 U.S.C. § 384(j). And it is partial in another sense because the implementation does not itself permit any drug to be imported-a point that requires further explanation.
HHS proposed implementing the statute via state- or tribal-run programs that would identify particular drugs that satisfy the statutory criteria and arrange to import them. See NPRM, 84 Fed.Reg. at 70797. That is, it proposed shifting the importation onus to “non-federal governmental entities,” perhaps joined by a “pharmacist” or “wholesaler,” to find Canadian drugs that could safely and cheaply be imported. See id. Qualifying drugs would be approved for sale in Canada and would be approvable in the United States but for their labeling. Id. It called such a hypothetical program an “SIP” and an interested nonfederal governmental entity an “SIP Sponsor.” Id.[3]
HHS did not suggest authorizing any particular SIP. Instead, it invited SIP proposals. See NPRM, 84 Fed.Reg. at 70801. A successful proposal would need to show that the selected drugs could satisfy the statutory preconditions-that “importation will pose no additional risk to the public's health and safety,” and that it “would result in a significant [cost] reduction.” Id. at 70802. Similarly, it would need to satisfy the remaining statutory criteria, including those related to testing, registration of foreign sellers, and labeling. See id.; 21 U.S.C. § 384(d)-(h). But even if a proposal satisfied the proposed rule's criteria, the rule made clear that the FDA would retain “discretion” to deny the proposal anyway. NPRM, 84 Fed.Reg. at 70802.
In other words, HHS announced that it was considering a conditional certification of the statutory precondition. See NPRM, 84 Fed.Reg. at 70803. The certification would be “conditioned on each authorized SIP meeting the relevant requirements.” Id. Thus, although the proposal contained proposed regulations to implement the drug-importation statute-which could lawfully exist only after HHS had effected the statute by certifying the preconditions-HHS explained that it would consider comments it received on that proposal when deciding whether to certify the preconditions at all. See id. With that explanation, it invited public comment.
Several months later, President Trump ordered the HHS Secretary to complete that “rulemaking process” and “to allow importation of certain prescription drugs from Canada.” Exec. Order No. 13938 § 2(c), 85 Fed.Reg. 45757, 45757 (July 24, 2020). Shortly after that order, the Secretary certified the preconditions of the drug-importation statute, and HHS issued a final rule inviting SIP proposals.
The Secretary's certification noted its conditional character. Although it explained that implementing the commercial portion of the statute would not increase risks and would significantly cut costs, it did so “limited to implementation . . . through the final rule.” ECF No. 34-3 at 2. It refused to authorize “any other method of implementing” the statute. Id. And it explained the nature of the SIP programs for which the final rule would invite proposals. Id. at 2-3.
The final rule mirrors the proposed rule. See generally Importation of Prescription Drugs, 85 Fed.Reg. 62094 (Oct. 1 2020) (“Final Rule”) (codified at 21 C.F.R. § 251.1 et seq.). It contains two contingencies for any potential drug...
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