Posted on: Friday, December 26, 2003
U.S. cities turning to Canadian pharmacies
By Julie Appleby
USA Today
For a year, the city of Montgomery, Ala., has been quietly saving money on its employees' health insurance costs — with a little help from Canada.
Although New Hampshire, Boston and Springfield, Mass., have grabbed headlines over programs aimed at helping residents purchase drugs from Canada, Montgomery beat them all.
"Quite honestly, we've not sought attention on this," said Jeff Downes, executive assistant to the mayor.
The program began last December as a voluntary part of the city's health benefit program for city employees and retirees who wish to get their drugs from a Canadian pharmacy. It will save the city $400,000 to $500,000 in its first year, Downes said.
A growing number of cities, counties and states say they want to allow employees, retirees and other citizens to purchase prescription drugs from Canada, where prices are lower because the government controls what drug makers can charge.
• Gov. Rod Blagojevich of Illinois asked for federal permission to set up a pilot program that would import medications from Canada, but federal officials said they could not certify such a program would be safe.
• Boston Mayor Thomas Menino met with the Food and Drug Administration, but was not dissuaded from his plan to launch a program to help city employees and retirees to buy drugs from Canada.
Challenging the FDA
If several municipalities and states launch cross-border drug-purchase programs, the efforts will present one of the most serious challenges to FDA authority in the agency's history.
The FDA has warned cities and states that helping U.S. residents buy drugs from abroad could be illegal and unsafe, but it isn't clear the agency will be able to stop them.
"We'll evaluate any program that starts," warned the FDA's William Hubbard, associate commissioner for policy. Hubbard said he hoped city and state leaders would talk with the FDA before launching any such programs.
But Burlington, Vt., Mayor Peter Clavelle said "We don't intend to wait for their blessing." Clavelle wants his city to have a program under way by March 1.
Many legal observers say the FDA may have little recourse but to fight each city and state. "The administration has staked out a position they can't afford not to defend," said attorney Jim Czaban, who specializes in drug law for the Washington, D.C., firm Heller Ehrman.
The growing momentum may make that effort futile.
"There are probably 60 cities and counties we are talking with," said Tony Howard, chief executive of CanaRx, a Canadian pharmacy that coordinates the city of Springfield's program, begun earlier this year to help employees purchase prescriptions in Canada.
He said that if enough cities and states enacted cross-border drug programs, it would prompt Congress to change drug law and bring costs for medicine in the United States down to the level they are in the rest of the world.
"If the U.S. were to drop costs to the average of the world, and then the pharmaceutical industry said it needed more money for research and development — then add a dollar to every prescription filled throughout the world," Howard said. "But be fair. Why should the U.S. pay twice as much as what everyone else does?"
Pending in Congress
Debate in Congress continues. Some lawmakers want to make it easier for residents to bring drugs in from Canada. Others fear that if enough individuals, cities and states buy from Canada, it could raise prices in the United States as drug companies seek to make up for lower revenue. They want to see other countries raise their prices, rather than impose price controls in the United States.
Canadians also are split on the moves, with some supporting the business the sales brings to local pharmacies, which collect a commission on each sale to the United States, while others fear it will lead to higher drug costs or shortages in Canada.
The FDA has moved to halt one city's program. After Springfield, Mass., began offering its cross-border drug program earlier this year, the FDA sent warning letters to the city's drug coordinator, CanaRx, based in Windsor, Ontario. But the effort was dealt a setback when CanaRx closed all its U.S. storefronts.
FDA Commissioner Mark McClellan flew to Canada last month to meet with Health Canada officials, who the FDA says are now reviewing CanaRx to ensure it is not violating any Canadian laws. That investigation could take months, Hubbard said.
In the meantime, the FDA is working with some states to help them take action against commercial storefronts that help individuals buy drugs from Canada. The FDA won a key court battle in November, shutting down Rx Depot.
The FDA argued that Rx Depot and other firms like it endanger patients by importing unapproved drugs from Canada. "More than half the states have taken action against these storefront pharmacies or Internet operations within their state boundaries," said Tom McGinnis of the FDA.
In Alabama, for example, the state's board of pharmacy succeeded in shutting down every storefront business it learned of that helped residents buy drugs from Canada, mainly for operating without a license.
Jerry Moore, executive director of the Alabama pharmacy board, said safety was the issue.
"If there is one adverse event (from a drug purchased through Canada), all the money you save would not be worth having a person end up in the hospital because a drug was subpotent, tainted or counterfeit," Moore said.
He said his agency did not act against Montgomery because the pharmacy the city deals with is outside the state's jurisdiction, but the agency referred the matter to the FDA.
Safety issue
Supporters of Canadian drug purchases say the safety issue is misleading. Drugs from Canada, they say, are just as safe as drugs bought in the United States. And there are other benefits.
"Employees save money and the city saves money," Downes said.
That's certainly what Clavelle wants in Burlington. "Municipalities are overburdened with the high cost of healthcare," he said. He admitted that buying drugs from Canada would help only so much. "Believe me, I don't view this as a solution. This is a Band-Aid. But we need some Band-Aids."
