Spurred by lower prices north of the border and a plethora of online pharmacies, U.S. consumers are purchasing Canadian pharmaceuticals in record numbers. More than 2 million shipments of prescription drugs will enter the U.S. from Canada this year, according to the U.S. Food & Drug Administration (FDA). Each year, as many as 1 million Americans purchase between $500 million and $1 billion dollars worth of Canada-origin medicines.

There is one small problem with this voluminous trade-it's against the law, according to FDA. Earlier this year, the FDA took the position that virtually all shipments of pharmaceuticals into the United States constitute illegal imports or reimports of unapproved, mislabeled or adulterated drugs. Federal law sharply limits the types of drugs that may be lawfully imported into the country. In general, only FDA-approved pharmaceuticals that are manufactured and labeled in accordance with rigorous U.S. standards may lawfully enter the country. FDA does not believe that Canada-origin drugs meet those standards.

This situation creates substantial uncertainties for carriers. As a general rule, a carrier bears no liability for the goods that it carries as long as the carrier complies with applicable transport-related requirements. For example, carriers generally are not required to obtain import or export licenses because the law places those obligations upon consignors/consignees.

The general rule of carrier immunity is under attack on several fronts due in large measure to security concerns following the events of 9/11. For example, the U.S. Department of Transportation (DOT) is trying to impose a greater duty upon carriers to detect undeclared hazardous materials. Similarly, the Department of Justice recently took the position that carriers have a duty to ensure that persons in certain prohibited classes do not possess explosives, a situation that was alleviated only recently with the issuance of new rules and findings by DOT and the Transportation Security Administration.

Drug imports from Canada might be considered the northern front in the ongoing struggle to impose greater liabilities upon carriers. Federal law imposes substantial civil and criminal penalties for anyone who knowingly "imports" or "trades" pharmaceuticals that fail to meet the FDA's rigorous import requirements. Based upon long-standing principles of trade law and practice, it is difficult to imagine a scenario under which a carrier could be held liable under the theory that it was engaged in the knowing "import" or "trade" of arguably illegal pharmaceuticals. Unfortunately, the FDA could take the position that carriers were aiding and abetting that trade-acts which could constitute separate violations of federal law.

The FDA's specific views on carrier liability are unknown, but the agency has unleashed sufficient warnings to put companies on notice. Earlier this year, for example, the FDA stated that "its highest enforcement priority would not be against consumers," but instead would be against other entities; presumably U.S.-based importers and perhaps carriers that, under the FDA's theory, were aiding and abetting the illicit import of Canadian pharmaceuticals into the United States.

The FDA is focused on prosecuting commercial trade, not the import of medicines by individual consumers for personal use. The FDA, as a matter of enforcement discretion, has stated that it will not prosecute individuals who import unapproved medicines for personal use under certain conditions. Unfortunately for carriers, this so-called personal-use policy likely does not apply to the import of commercial quantities of pharmaceuticals.