New Customs Rules May Disrupt Canadian and Other International Prescription Drug Program Shipments

What Employers Need to Know

Effective January 20, 2027, U.S. Customs and Border Protection (CBP) will enforce new entry requirements following the suspension of the de minimis administrative exemption for international postal shipments valued at $800 or less, as part of the current administration’s efforts to crack down on illicit drugs entering the United States. This enforcement change impacts employer-sponsored programs that direct participants to Canadian or other international pharmacies for lower-cost prescription drugs.

What is Changing?

The importation of prescription drugs into the United States from other counties is generally banned by the U.S. Food and Drug Administration (FDA) with narrow exceptions for: (1) drugs used to treat a serious health condition with no other FDA-approved alternative; (2) drugs that cannot be actively marketed for resale within the United States; (3) drugs that pose no unreasonable safety risk; or (4) there is an individual declaration that the drug is used for personal use and the individual’s physician information and proof of treatment abroad is provided.

Despite the FDA restrictions, low-value prescription drugs are regularly shipped from other countries with minimum scrutiny from CBP due to the de minimis administrative exemption for international postal shipments. The new regulatory framework effectively closes the loophole on this exemption and requires shipment-level information and an eligible party, such as the owner, purchaser, or an authorized customs broker for parcels, including prescription drug shipments to enter the United States. Without this newly required shipment data, prescription drug shipments may be delayed, assessed duties, refused entry, or returned to the sender.

How Plan Participants and Employer-sponsored Programs May Be Affected

For plan participants, particularly those taking specialty or maintenance medications, these disruptions may lead to missed doses, emergency domestic fills, new prior-authorization or clinical-transition requirements, higher out-of-pocket or plan costs, and interruptions in continuity of care.

While the new CBP framework does not itself declare every Canadian and other international shipments of prescriptions unlawful (though the FDA generally takes that position), it does remove the low-friction customs treatment on which many direct-to-patient international pharmacy models relied. Employer plan sponsors that implemented international prescription drug sourcing programs through a vendor can expect member disruption.

TFG Position

Long before the issuance of the new CBP measures we were skeptical of the long-term viability of such programs.  First, the programs are technically illegal, and plan sponsors have a fiduciary obligation to follow the law.  Second, drug importation outside of FDA purview may create additional legal liability for plan sponsors.  Third, while rare, there have been well documented cases of counterfeit or non-genuine drugs procured through importation programs that caused severe health issues for patients spurring multiple high profile lawsuits.

With the latest CBP rules the popularity and operational viability of these programs are expected to decline sharply.