Personal Importation of
Remedies, Drugs and
Therapeutic Products

February 3, 1999 - Updated 01/11/06, see: Appendix

PERSONAL IMPORTATION

This paper was originally prepared as an Opinion Memorandum for an NGO:

Index:
Question
Law
Analysis
Free Speech & Privacy
Regulatory Climate
Conclusion
Presentation of Information
Personal Importation
Summary
Appendix

[Opinion Originally prepared for a Private Association]

What is the current regulatory stance of the Food and Drug Administration with regard to personal importation of prescription drugs and dietary substances?

Can the Foundation lawfully (1) tell its members and/or (2) publish in its magazine or web site, contact information for pharmacies outside the United States which will fill prescriptions from physicians for United States residents, at substantially lower prices than obtainable in the United States, where the Foundation has no financial interest in the pharmacies or the transactions?

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The primary statute involved in the importation of prescription drugs is 21 U.S.C. 381. The Food and Drug Administration has issued RPM Ch. 9-71, Coverage of Personal Importation, to regulate the implementation of the statute in the instance of personal importation.

The underlying Constitutional principles involved include Freedom of Speech and Privacy Rights. Other significant legal concepts include open competition and access, by consumers, to competitive choice (in this context, NAFTA and GATT impose significant restraints on regulatory policy).

There is little directly relevant case law, with the Supreme Court referring to 21 U.S.C. 381 in just one case, K-Mart Corp. v Cartier, Inc, 485 US 176 (1988).

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Part One: Free Speech and Privacy Issues

The primary Constitutional principle is that publications (including web sites) have the right to make truthful statements without government interference. Government may substantially burden a person's Freedom of Speech only if it demonstrates that application of the burden to the person -- (1) is in the furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.

In K-Mart Corp. v Cartier, Inc, 485 US 176 (1988) the Supreme Court mentions 21 U.S.C. 381, in passing, in another context, "The Government typically imposes embargoes to protect the public health, see, e.g.: 21 U.S.C. 381 (adulterated, misbranded, or unapproved foods, drugs, and cosmetics)..." This tells us that economic protection of U.S. pharmacies is not a governmental interest under this (or any other) statute, and that "protecting the public health.." might be the only possible compelling governmental interest. The reference also strongly implies that the public health concerns have to do with "adulterated, misbranded, or unapproved... drugs..."

It is my legal opinion that telling people, whether members or not, where they can have valid prescriptions for approved drugs filled is protected speech.

When that speech is primarily directed to members of a private association additional significant legal protections are invoked. As a private association for the achieving and maintaining of a healthy status, the Foundation is in a secure legal position with regard to the providing of information to its membership. There is substantial case law for the proposition that people may do, in a private association, that which would be illegal to do in the public, as long as there is no showing of substantive evil.

The Supreme Court has "repeatedly held that rights of association are within the ambit of the constitutional protections afforded by the First and Fourteenth Amendments..." Gibson v Florida Investigation Committee, 9 L Ed 2d 929(1963), p.934. "This Court has recognized the vital relationship between freedom to associate and privacy in one's associations...Inviolability of privacy in group association may in many circumstances be indispensable to preservation of freedom of association, particularly where a group espouses dissident beliefs..." NAACP v Alabama, 357 US 449 (1958), at 462.

It is without question that the members of a private association may advise and assist one another with regard to the matters for which the association was formed. In United Transportation Union v Michigan, 28 Law Ed 2d 339, at page 344, the Supreme Court, striking down an injunction which would have forbidden members of the union from giving legal advice to members or family, held that "such activity is protected by the First Amendment." Even referring each other to particular member practitioners is within the scope of protected activities. This came before the Court in the context of a labor union -- a private association -- recommending specific attorneys to its members. The Supreme Court held that this was protected activity. United Mine Workers of America v Illinois State Bar Association, 19 L Ed 2d 432 (1967).

I therefore conclude that the Foundation can tell its members and any other person who gets its magazine or accesses its web site about the availability of off-shore pharmacies.

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Part Two: The Regulatory Climate

The next concern must be, what happens after a person takes the information you provide and contacts a non-U.S. pharmacy? What happens when the drugs are imported?

The statute, 21 U.S.C. 381, establishes the terms of cooperation between the Secretary of the Treasury (Customs) and the Secretary of HHS (FDA) in controlling the importation of drugs (and food). Customs is empowered to deliver samples of same to the FDA. Entry may be denied if "it appears from the examination of such samples or otherwise that (1) such article has been manufactured, processed, or packed under insanitary conditions... (2) such article is forbidden or restricted in sale in the country in which it was produced or from which it was exported, or (3) such article is adulterated, misbranded, or in violation of section 355 of this title..." Section 355 requires that all "new drugs" be approved before introduction into interstate commerce.

For our purposes, the FDA has taken two primary regulatory steps under this statute: (1) it issued, in 1989, Regulatory Procedures Manual Ch. 9-71, Coverage of Personal Importation and (2) Import Alert 66-41, Automatic Detention.

The Automatic Detention Alert is the chief device used by the FDA to control the importation of certain drugs and drug sources. The Alert states: "Media reports concerning FDA's guidance for release of importations for personal use have inaccurately suggested that any unapproved drug may be imported through the mail for personal use. [RPM Ch. 9-71]is much more restrictive than reported. *** The guidance is by its very terms discretionary, and does not provide anyone with a right to import any drug. The guidance provides that release of an unapproved drug for personal use may be appropriate if, among other considerations, the drug is intended for a serious condition for which effective treatment may not be available domestically either through commercial or clinical means, and it is not considered to represent an unreasonable risk.

The Alert continues, "The guidance is intended to apply only to (1) persons who have received treatment in a foreign country with an unapproved drug which is not available in the United States...to continue treatment started abroad; and (2) persons who have made their own arrangements for obtaining an unapproved drug from foreign sources, when the drug has not been promoted in the United States..."

There is a significant point to note here: it is the commercial importation of unapproved drugs which is the major regulatory concern. If the drug is an approved drug it should not matter where a consumer buys it. Reading Sections 381 and 355 with the regulations and alert, it seems clear that people may purchase their approved prescription drugs where they choose.

Certainly there is nothing in the law which would allow the FDA to take into account the cost involved. The law currently favors price competition in health care, and in a leading New Jersey case, the value of competition in eye care was used by the courts to, in effect, overturn a century old licensing scheme.

In Hillman/Kohan Eyeglasses, Inc v New Jersey State Board, 169 NJ Super 259, the Court observed that, absent compelling health reasons, consumers should have choices in the competitive marketplace, and further, that if the legislature had intended to create a monopoly, it would have done so by specific grant of monopoly, which it did not do.

NAFTA (Articles 301 and 2101, incorporating GATT) permits only health and safety regulations, not economic protective measures, with regard to importation of products such as drugs and nutrients.

In the case of unapproved drugs the regulatory procedure comes into effect. Then the following Chapter 9-71 process applies:

[1] "when the intended use is appropriately identified, such use is not for treatment of a serious condition, and the product is not known to represent a significant health risk; or

[2] "when 1) the intended use is unapproved and for a serious condition for which effective treatment may not be available domestically either through commercial or clinical means; 2) there is no known commercialization or promotion to persons residing in the U.S. by those involved in the distribution of the product at issue; 3) the product is considered not to represent an unreasonable risk; and 4) the individual seeking to import the product affirms in writing that it is for the patient's own use (generally not more than 3 month supply) and provides the name and address of the doctor licensed in the U.S. responsible for his or her treatment with the product or provides evidence that the product is for the continuation of a treatment begun in a foreign country..." [Question: if a person provides copies of his or her medical records, including blood tests, local physician's diagnosis, etc., to an off-shore physician, without ever going off-shore, and that physician issues a Prescription, does this qualify as "treatment begun in a foreign country?" Note also distinctions between [1] and [2], such as "not known to represent a significant health risk..." vs. "considered not to represent an unreasonable risk..."]

When drugs are to be imported under this procedure, careful steps must be taken to assure compliance. I am advising that such steps also be taken in all cases, including approved drugs and even nutrients which might be considered drugs because of intended use. I discuss those steps below.

As a practical matter, if the products are promoted, and how the products come into the country, may be significant. From my reading of the FDA Alert and exploration of the issue on the internet, it is safe to say that the FDA is most concerned about commercial promotion of specific drugs by off-shore distributors. Many of the items banned in IA 66-41 are banned because of promotional activities.

Since FDA agents are directly present at common carrier importation hubs, but not at postal service hubs, postal importation may produce less scrutiny. Customs inspectors at the postal facilities are more concerned about collecting duties on imports, not enforcing the FDA Alert. If the approved drug is manufactured in the NAFTA area, it will enter duty free, otherwise, it may have a tariff, with payment due from the customer.

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Presentation of Information

I recommend that the Foundation offer information about non-U.S. pharmacies in a non-promotional, "for your information" way, with a clear disclaimer that the Foundation has no financial interest in the pharmacies.

You may want to establish Foundation criteria for which pharmacies you list, and can certainly start with even a single qualified pharmacy, since you would want to be reasonably certain that the pharmacy meets its local requirements as well as the statute's concerns that there be no "insanitary" conditions or misbranded or adulterated products imported. The internet also has a number of sites providing information about off-shore drug and nutrient sources which you should consider.

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Ordering for Personal Importation

What is critical is that the pharmacies NOT promote themselves or specific drugs. The proper procedure is for the first contact to be made by the customer directly to the pharmacy.

The Foundation (not the pharmacy) can provide sample Customer's Order Letters and Prescriptions, which should be developed with counsel's advise to fit into the various categories of importation discussed in this memorandum. The Order Letter (the content of which should be certified as true) will need to recite the several factual bases for the particular personal importation and meet the criteria in the statute and regulation. It is particularly appropriate for the Foundation to provide such information to its members, under its Private Association status.

The pharmacy will have to ship the products with copies of the Prescription and Order Letter, as well as a Bill of Lading which also recites the relevant information required by the law and regulation. The Bill of Lading should be carefully crafted to meet local and U.S. criteria.

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The simple reply to the legal questions proposed is: (1) yes, the Foundation can inform people about legitimate non-U.S. pharmacies that offer approved drugs at discount (or that offer unapproved drugs, for that matter); and (2) yes, the off-shore pharmacy can provide approved drugs (and, more restrictedly, unapproved drugs) to U.S. residents who personally arrange for importation of less than a 3 month supply, with carefully drafted prescriptions, purchase orders and bills of lading.

Under these circumstances, Constitutional right, statutory and regulatory provisions all lead to the conclusion that the American health product consumer has the right to learn about competitive sources of products and to obtain products from those sources, consistent with statutory and regulatory requirements. Submitted without prejudice, all rights reserved.

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ã 1999, 2001, 2006 v01/11/06

Appendix - Update

FDA's current position (2005) is:

FDA guidance: http://www.fda.gov/ora/compliance_ref/rpm_new2/ch9pers.html