Importing Medicine and Medical Devices Into the United States: Regulatory Risks, Customs Costs, and What Importers Need to Know

Importing pharmaceutical products or medical devices into the United States (“U.S.”) is one of the most legally complicated things a business can do in international trade. The rules are demanding, the consequences for getting it wrong are serious, and the gap between what is legally acceptable in another country and what is legally acceptable here is wider than most importers realize, until they are already in a problem.

There is a version of this story that plays out constantly in the medical products import space, and it almost always starts the same way.

A company has an agreement with a foreign manufacturer. The products have been moving without problems for months, sometimes years. Then a shipment gets detained at the border. The Food and Drug Administration (“FDA”) is holding it. Nobody can quite figure out why, because nothing about this particular shipment is different from the ones that cleared before it.

The U.S. distributor is waiting. Storage fees are accumulating. Customers may be waiting for inventory, contractual delivery commitments may be approaching, and the importer may suddenly be paying costs that were never part of the original transaction. And the importer is discovering, for the first time, that the legal situation they are now in is considerably more complicated than a customs paperwork problem.

What businesses, distributors, and individuals need to understand about this space is not just what can go wrong at the border, but what the legal exposure looks like before a shipment ever moves, whether there are lawful ways to structure the import program more efficiently, and what it actually takes to get through an enforcement situation once one has started.

Why This Category Is Different From Everything Else

Most imported goods are primarily a U.S. Customs and Border Protection (“CBP”) matter dealing with duties, classification, country of origin, documentation. Those issues are serious enough. But pharmaceuticals and medical devices bring in a different set of consequences entirely.

These devices are not treated by U.S. law the way most import categories are. The stakes, the regulatory framework and critically, the consequences of getting it wrong are different. Not just financially, but legally, in ways that can extend well beyond civil penalties into criminal territory.

The FDA has its own independent authority to stop, hold, and refuse imported drugs and medical devices. That authority operates on its own track, separate from CBP. A shipment can satisfy every customs requirement and still be turned away because of an FDA determination. More to the point, importing unapproved drugs, mislabeled pharmaceutical products, or medical devices that have not been cleared for the U.S. market can expose an importer to federal criminal liability, not just fines. And the fact that the product is sold legally in another country, even widely, even by major international manufacturers, does not provide any meaningful protection under U.S. law.

That gap between how a product is treated abroad and how it is treated here is where most enforcement situations in this space begin, and the businesses that manage this well tend to share one thing. They treat the legal questions involved as legal questions, not as paperwork to be handled by the freight forwarder or a compliance checklist to work through internally, having experienced counsel involved before those questions became enforcement problems.

Preventive planning can also have a direct financial impact. The objective is not simply to avoid penalties. Proper legal planning can help an importer avoid unnecessary detention and storage charges, refused shipments, unnecessary transportation and warehousing expenses, and the disruption that occurs when inventory cannot reach customers. In the right circumstances, counsel may also identify lawful ways to structure the import program more efficiently before the business commits itself to a particular supply chain.

The Drug Approval Question Nobody Asks Until It Is Too Late

A pharmaceutical product imported into the United States for commercial distribution must have a lawful basis for being marketed and imported in the U.S. market. For many drugs, that means an FDA-approved marketing application. Certain over-the-counter (“OTC”) drugs, however, may be marketed under an applicable FDA OTC monograph without an approved drug application, while other products may enter under specific regulatory pathways such as an investigational new drug application. The important point for an importer is that foreign approval is not, by itself, a basis for selling a drug in the U.S.

A product approved in Canada, cleared by the European medicines authority, or widely available throughout Latin America does not automatically have authorization for commercial distribution in the U.S. The U.S. regulatory status has to be determined under the applicable FDA framework for that particular product.

A company sources a product that is genuinely well-regarded in its home country, moves through foreign regulatory frameworks without issue, and appears entirely legitimate by every standard that market applies. Then it arrives at a U.S. port and the FDA treats it as an unapproved drug because from where the FDA sits, that is exactly what it is. The manufacturing facility generally needs to be properly registered with FDA, the drug must satisfy the applicable U.S. regulatory requirements, and FDA may consider the establishment's compliance and inspection history when determining admissibility. The labeling needs to satisfy FDA requirements. The claims made about the product anywhere they appear, including on the manufacturer's foreign-language website, can affect how the FDA classifies the product for import purposes.

This is where the cosmetic-drug line we discussed in our prior article becomes relevant to the pharmaceutical space as well. Products that are marketed abroad as dietary supplements, wellness products, or consumer health items sometimes cross into drug territory under FDA standards based on what is claimed about them. When that happens, importing them without the required drug approval is a federal violation, and the importer of record is the party that answers for it.

The FDA has broad enforcement authority over this, and it has active mechanisms that allow it to hold shipments automatically based on a manufacturer's prior history of violations, without even physically inspecting the specific boxes in front of it. A supplier's track record with the FDA can affect how future shipments from that facility are treated at the U.S. border.

Whether a specific product, from a specific supplier, with specific labeling and specific claims made about it, is actually admissible into the U.S. is a legal question. It is not resolved by reviewing the supplier's certifications, and it is not guaranteed by the fact that prior shipments cleared without issue.

Medical Devices and the Clearance Gap

Medical devices present their own version of the same problem, and it creates a particular kind of frustration for companies that have invested in the U.S. regulatory process and believe they have done everything right.

A device that has received FDA clearance through the pre-market notification process, commonly known as a 510(k), may be legally marketed in the U.S., subject to the other requirements applicable to that device and its manufacturer. What it does not do is guarantee that every shipment of that device will be let into the country.

Clearance and admissibility are two separate things governed by two separate frameworks. A cleared device can still be detained at the border if the manufacturing facility's FDA registration has lapsed, if the facility has had inspection problems that placed it into the FDA's enforcement framework, or if what is being shipped does not match what was cleared in some material way. The FDA actively enforces all of these scenarios, and the enforcement is current.

The device distributor who assumes that having a cleared device means cleared shipments is operating on an assumption that U.S. import law does not support.

There is also a category of device that requires Pre-Market Approval (“PMA”), rather than 510(k) clearance, and the distinction is not always obvious from the face of the product. This applies to Class III devices, those that support or sustain human life or present a potential unreasonable risk of illness or injury. Whether a specific device falls into this category is a legal and regulatory determination, not a commercial one, and importing them without a PMA is a serious federal violation. The fact that the product is widely used in other markets, or that a U.S. distributor believes they are sourcing a cleared device, does not resolve the legal question of whether the specific product, from the specific facility, under the specific labeling presented at entry, is actually admissible.

When Your Supplier's Problem Becomes Your Problem

Something that importers in this space frequently do not anticipate is how directly a foreign manufacturer's standing with the FDA affects the importer's ability to get product into the U.S.

The FDA's enforcement framework targets manufacturing facilities. When a facility has a documented problem such as an inspection finding, a pattern of manufacturing failures, a history of refused shipments, the enforcement consequence attaches to every shipment coming out of that facility, regardless of who the U.S. importer is and regardless of whether the specific lot has any identifiable defect. The fact that your company has a clean regulatory history is of little to no relevance. The facility's status is what determines what happens at the border.

What makes this genuinely difficult is that importers often do not know what enforcement history their manufacturing facility has with the FDA. This means an importer with a completely clean record can find their shipments being detained because of something that happened at the manufacturer's facility, something the importer may have had no way of knowing about. Foreign manufacturers are not always forthcoming about inspection findings, Warning Letters, or alert listings. The business relationship with a foreign supplier does not transfer that supplier's regulatory obligations to the importer, but it does expose the importer to the real-world consequences of the supplier's standing with the FDA.

By the time that happens, the importer is already in an enforcement situation with defined timelines, defined procedural requirements, and consequences that escalate if the situation is not handled correctly from the start.

The Problems That Exist Before a Shipment Moves

This is where the conversation shifts from reactive to preventive, and where the difference between businesses and importers that manage this space successfully and those that eventually find themselves in an enforcement situation tends to be most visible. The businesses and importers that manage pharmaceutical and medical device imports successfully tend to share one thing in common. They treated legal counsel as part of the planning process, not as a response to a crisis. Not because they expected trouble. Because the decisions made early in an import program have consequences that play out much later.

The legal questions that matter most in pharmaceutical and medical device imports are not the ones that arise when a shipment is detained. They are the ones that should have been asked before the import program started. Experienced counsel evaluates whether the product is actually admissible for the U.S. market, whether the manufacturer's history with the FDA creates exposure the importer is walking into without knowing it.

But preventive measures can serve two purposes here.

The first is avoiding unnecessary exposure. The goal is not simply to avoid a penalty. It should also be to avoid the costs that follow from the underlying problem such as the detention and storage charges, refused or rejected shipments, additional transportation or warehousing expenses, and the possibility that merchandise ultimately has to be exported, destroyed, or abandoned.

There can also be downstream costs. If the same underlying issue affects subsequent shipments, an importer may find itself repeatedly dealing with the same detention or refusal. By the time the importer is forced to restructure its import program after the fact, the cost may extend far beyond the original shipment.

The second is finding lawful efficiencies. Compliance does not necessarily mean accepting every cost associated with the way an import program happens to be structured. Depending on the business, the merchandise, the supply chain, and the ultimate destination of the products, there may also be lawful customs or trade mechanisms that make the overall program more efficient or less expensive.

That analysis is particularly important where imported merchandise is not necessarily destined for immediate U.S. consumption.

The Cost-Saving Opportunities That May Be Missed Before Importation

Consider a business that imports pharmaceutical products or medical devices into the U.S. and subsequently exports some or all of that merchandise to customers outside the United States. The way the merchandise enters and moves through the U.S. can affect the customs consequences associated with the transaction.

One possibility that may warrant examination is the use of a Foreign-Trade Zone (“FTZ”).

An FTZ can provide special customs treatment for qualifying merchandise and operations. For a business that imports merchandise into the United States and later exports it, the customs treatment can differ from merchandise imported directly for U.S. consumption. Depending on the particular circumstances, that difference may create an opportunity for customs-cost savings or other efficiencies.

That does not mean that every importer should establish or use an FTZ. Whether an FTZ makes economic and operational sense depends on the particular merchandise, volume, supply chain, activities conducted in the U.S., ultimate destination, and applicable customs treatment.

That is why the question can become important when an import program is being established. A business that regularly moves significant quantities of merchandise through the U.S. for eventual export may have customs-planning opportunities that are not apparent from the purchase order, commercial invoice, or ordinary import process.

The point is not to create complexity for the sake of complexity. It is to determine whether the structure the business is about to build makes sense for its particular legal, customs, and commercial circumstances.

Those questions do not always have obvious answers. Each of them requires legal analysis of the specific product, the specific supply chain, and the specific regulatory framework that applies to the situation. The companies that have those questions answered before the first shipment moves are in a fundamentally different legal position from those that discover the answers for the first time in an enforcement context.

If the Situation Has Already Developed

If your pharmaceutical or medical device shipment has already been detained, if you have received an FDA detention notice or a notice of refusal of admission, or if you have discovered that your supplier's facility is on an import alert, the situation requires legal attention immediately.

The window to respond after an FDA detention notice is short. What the agency needs from you, and how to present it in a way that gives you the best chance of getting the shipment released, depends entirely on the nature of the enforcement action. Getting the response wrong does not just leave the detention unresolved. It can allow the situation to grow in ways that affect future shipments, damage relationships with distributors, and in some circumstances create additional legal exposure that was not there to begin with.

It can also create costs that have nothing to do with the original regulatory issue itself. Storage and warehousing charges may continue to accumulate. Transportation arrangements may have to be changed. Customers may go without inventory. A distributor may be unable to meet its own obligations. In serious cases, merchandise may need to be exported, destroyed, or abandoned rather than placed into U.S. commerce.

There is also the question of what happens to future shipments while an active enforcement matter is being resolved. If the facility issue is not addressed, subsequent shipments face the same detention. The distributor relationship suffers. The commercial program stalls. The business can end up paying repeatedly to manage what is actually one unresolved underlying problem. Managing all of that, including the FDA response, the supplier relationship, the distribution agreement, and the ongoing commercial program, simultaneously requires coordinated legal strategy, not sequential crisis management.

If any part of this describes your current situation, or if you are building a pharmaceutical or medical device import program and want to understand what you are actually getting into before the first shipment moves, contact us today for a confidential consultation.

• 1. Can I import a pharmaceutical product that is approved in another country?

  Not necessarily. Foreign approval does not automatically authorize a pharmaceutical product for commercial distribution in the United States. The product must have a lawful basis for being marketed and imported in the U.S.

• 2. Can the FDA detain my pharmaceutical or medical device shipment?

  Yes. FDA can detain a shipment when it appears to violate applicable U.S. requirements. A shipment may also be subject to detention based on issues involving the manufacturer or its regulatory history.

• 3. Can my shipment be detained even if previous shipments were allowed into the United States?

  Yes. Prior shipments clearing the border do not guarantee that future shipments will be admitted.

• 4. Can my shipment be affected by problems with my foreign supplier?

  Yes. A foreign manufacturer's FDA compliance history, inspection issues, or prior refused shipments can affect how future shipments from that facility are treated.

• 5. Does FDA clearance of a medical device guarantee that my shipment will be admitted?

  No. A 510(k) clearance or other applicable authorization does not eliminate the need to satisfy the other requirements that apply to the device, manufacturer, and importation.

• 6. What happens if FDA refuses my shipment?

  A refused shipment generally cannot be distributed in the United States and may need to be exported, destroyed, or otherwise handled in accordance with FDA and CBP requirements.

• 7. What costs can result from a detained or refused shipment?

  In addition to the underlying regulatory issue, businesses may face storage and warehousing charges, additional transportation expenses, delayed deliveries, lost sales, and costs associated with exporting or disposing of merchandise.

• 8. Can I address FDA or customs issues before my first shipment?

  Yes. Import planning can help identify regulatory, supplier, customs, and supply-chain issues before they result in a detained or refused shipment.

• 9. Can an FTZ reduce customs costs for pharmaceutical or medical device imports?

  Potentially. For businesses that import merchandise into the United States and subsequently export some or all of it, an FTZ may provide customs advantages depending on the merchandise, supply chain, operations, and applicable rules.

• 10. What should I do if my pharmaceutical or medical device shipment has already been detained?

  The situation should be addressed promptly. FDA detention and refusal matters can involve specific deadlines and procedures, and the appropriate response depends on the reason for the detention and the circumstances of the shipment.

This article is intended for informational purposes only and does not constitute legal advice. The content herein is not a substitute for obtaining legal advice from a qualified attorney licensed in the appropriate jurisdiction. Viewing or relying upon this information does not create an attorney-client relationship. Readers should consult with legal counsel regarding their individual circumstances before taking any action based on this material.