FDA Issues Proposed Rule to Implement Its New Authority to Destroy Drugs Valued at $2,500 or Less That Are Refused Import Into the U.S.

On May 6, 2014, FDA issued a proposed rule to implement the agency's new administrative authority to destroy drugs valued at $2,500 or less that have been refused admission during importation into the United States1. FDA is requesting that interested parties submit comments on the proposed rule by July 7, 2014. FDA developed the proposed rule pursuant to new authorities granted to the Agency under the Food and Drug Administration Safety and Innovation Act (FDASIA), which President Obama signed into law on July 9, 2012, and which amended the Federal Food, Drug, and Cosmetic Act (FDCA). Specifically, FDASIA granted FDA new authority to destroy – without the opportunity for export – any imported drug that is refused admission into the U.S. on the grounds that drug is adulterated, misbranded, or unapproved. This proposed regulation would only apply to a drug product that is valued at less than or equal to $2,500 (the amount of which may be amended by regulation issued by the Department of Treasury).2 FDASIA required that FDA issue regulations governing this new authority by July 9, 2014.3 As with the enactment of FDASIA itself, this proposed rule highlights the government’s ongoing focus on the unlawful importation of counterfeit and unapproved prescription drugs. Under the proposed rule, FDA can destroy shipments of drugs valued at $2,500 or less that have been refused admission into the United States under section 801(a) of the FDCA.4 However, as part of this process, FDA must provide an owner or consignee of the drug with notice and an opportunity for a hearing. In implementing this new authority to destroy products in a manner consistent with the historical import refusal procedures, the proposed rule allows FDA to provide two separate notices and hearings. The first is for refusal of admission; the second is for the destruction of a refused drug product. The proposed rule also gives FDA the option to combine both the refusal and destruction notices and hearings into one notice and proceeding. According to the proposed rule, whether the determinations occur separately or in one combined proceeding, the determination of refusal and the determination regarding destruction of a drug will be made separately by FDA as the findings are separate and distinct. Of course, it remains to be seen how often FDA will actually utilize this new enforcement tool with such a limited budget allocated to drug import security. Indeed, the preamble to the proposed regulation notes that the high volume of inbound international mail shipments has already strained limited federal resources at international mail facilities (IMFs), where a majority of the drug products likely subject to FDA's new destruction authority enter the United States.5 The agency’s proposed International Courier user fee will very probably play a role in how FDA will handle the growing volume of imports and cost of import operations at these IMFs. As the name implies, the International Courier user fee is intended to support activities associated with increased surveillance of FDA-regulated commodities at IMFs.6 While it is unclear if and when the new user fee will be implemented, President Obama's proposed fiscal 2015 budget does not appear, at least superficially, to focus on drug imports, though it does allocate funding to improving the safety of imported food products.7 Lastly, the proposed rule states that FDA plans to issue further guidance on this topic to clarify specific details on the administrative process, e.g., the time period for introducing testimony regarding destruction, the format of the notice, and which FDA officials are authorized to make the decision as to whether to destroy a particular drug.8 We will continue to monitor future developments in this area, and of course on FDA's actual use of this new enforcement tool. The proposed rule is available here. 1 See 79 FR 25758 (May 6, 2014). 2 See 21 USC 381(a), as amended by the Food and Drug Administration Safety and Innovation Act (FDASIA), Pub. L. No.112-144, § 708, 126 Stat. 993, 1068 (2012). 3 See Food and Drug Administration Safety and Innovation Act (FDASIA), Pub. L. No.112-144, § 708(d) 126 Stat. 993, 1069 (2012). 4 See 21 USC 381(a). A drug is subject to refusal of admission during import if, among other reasons, it is or appears to be adulterated, misbranded, or unapproved in violation of section 505 of the FDCA. Id. 5 87 FR 25760 (May 6, 2014). 6 FDA, Overview of the Budget Request, at 5, available at: http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM394601.pdf. 7 See Department of Health and Human Services, Fiscal Year 2015, Budget in Brief, at 7-8 available at: http://www.hhs.gov/budget/fy2015/fy-2015-budget-in-brief.pdf. 8 79 FR 25761 (May 6, 2014).

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