Wednesday, October 04, 2006

Importing Price Controls

For almost a year now, Customs has had a policy of seizing prescription drugs imported from Canada via mail. That policy is about to change. The Wall Street Journal reported today that CBP will stop that practice due to pressure from legislators. The prime mover behind the policy change appears to have been Florida Senator Bill Nelson. According to Nelson, CBP has seized drug shipments to 40,000 Americans from Canada.

There are lots of arguments about this as a policy question. A couple years ago, I chaired an ABA panel on this issue. Speakers raised questions about the safety of drugs not subjected to FDA scrutiny on the one hand. On the other side, some questioned whether CBP should be used as a mechanism for protecting intellectual property rights for big companies that can generally afford to take care of themselves in court. But, the most interesting thing I heard came from a Canadian health-care industry consultant who had pretty compelling evidence that much of what is shipped to the U.S. from the Canada does not come through the legitimate Canadian pharmacy industry. He claimed that many of the Internet and mail order pharmacies are operating outside of the regulation of the provincial governments that regulate them. (At least I think it was provincial, rather than federal.) This created concern over whether the drugs shipped were subject even to Health Canada scrutiny. And, just to be clear, no one on the panel including a medical doctor, had any doubt that Health Canada's inspection and approval process was reliable.

So, as of Monday, Customs will apparently no longer seize shipments from Canada. That means Americans can piggy back on the price control system established by Canada for the benefit of Canadians. I am sure that will make our good friends to the north very happy.

In the meantime, keep in mind that the actual law has not changed. This is an exercise in enforcement discretion. The law continues to prevent the importation of unapproved, adulterated, or misbranded drugs. Also, when a drug is made in the U.S. and shipped abroad, only the manufacturer has the authority to reimport that drug. Here is a good summary of Customs current policy on Internet pharmacy purchases.

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