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Why Insulin Is Ineligible for Buyer-Led Drug Importation Under Trump's Proposal

Analysis  |  By Steven Porter  
   December 19, 2019

The administration points to statutory language, including definitions amended by the ACA, as preventing that FDA from allowing states to import biologics.

A proposed rule unveiled Wednesday that lays the groundwork to allow the importation of certain drugs could help to make medicine more affordable for the American public in the foreseeable future, according to the Trump administration.

But the proposed pathway that would allow states and other non-federal government entities to ask the Food and Drug Administration to review and authorize their importation plans—perhaps with a pharmacist, wholesaler, or other entity as a cosponsor—excludes biological products.

That means any programs these entities devise won't be allowed to import a product that's vital for many diabetics: insulin.

Buyers won't be allowed to import insulin under this proposal because of the way the relevant statute is worded, an FDA spokesperson tells HealthLeaders:

Although insulin would be ineligible for the buyer-led pathway of this drug importation proposal, the administration also outlined a seller-led pathway that would allow manufacturers to import their own insulin products. That second proposed pathway, which was outlined in draft guidance released Wednesday alongside the proposed rule, would apply to insulin and certain other biologics, the FDA spokesperson confirms.

Related: HHS Unveils Proposed Rule on Drug Importation

The guidance would give drug makers a procedure by which to obtain an additional National Drug Code (NDC) and use it "to basically compete against [their] own product but at a lower list price," said Health and Human Services Secretary Alex Azar.

This pathway wouldn't be the first or only way an insulin manufacturer could voluntarily undercut its own price point. Amid public outcry over price hikes, Indianapolis-based Eli Lilly & Co. announced earlier this year that it will sell a half-price "authorized generic" version of its brand-name insulin Humalog. At about $137 per vial, the generic costs roughly the same as brand-name Humalog did in 2012, as Kaiser Health News reported.

Overall, the cost of insulin has risen dramatically in recent years, fueling public outrage over price hikes and the lack of transparency around prescription drug rebates. The annual insulin cost incurred by an average patient with Type 1 diabetes nearly doubled in a recent five-year period, from $2,864 in 2012 to $5,705 in 2016, excluding rebates, according to a 2019 report by the nonprofit Health Care Cost Institute (HCCI).

That increase in gross spending on insulin was driven primarily by insulin price hikes, though rising popularity of more expensive insulin products also contributed, the HCCI researchers said, as Reuters reported.

The proposal drew a quick rebuke from both the pharmaceutical industry and the pharmaceutical industry's critics.

Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), called the proposal a potentially dangerous "political maneuver."

Brad Woodhouse, executive director of Protect Our Care, meanwhile, said the proposal is "riddled with loopholes large enough for drug companies to drive a truck through."

Related: Alex Azar Reverses Course to Back Drug Importation

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

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