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Drug Reimportation Plan Saves City $2.5 Million
By Ceci Connolly, Washington Post
July 15, 2004
For 30 years, Roger Landry has been rounding up criminals in this city near the Connecticut border. But in the eyes of federal regulators, Officer Landry is himself a lawbreaker.
He and his wife have made out handsomely from their illegal activity, pocketing an extra $1,000 this year. But rather than punish the pair, city officials are cheering them on.
Thanks to the Landrys and 3,200 other city workers who have opted to order their prescription drugs from a licensed Canadian pharmacy, deficit-plagued Springfield has saved $2.5 million in the year since it became the first city in the nation to sponsor such a program.
As two of the earliest participants in the Springfield venture, the Landrys are in the vanguard of a nationwide revolt against soaring drug prices -- and very pleased with the results.
"How can you not love it?" said Linda Dion-Landry, an insurance clerk for the city. "It's free."
But what looks like a rousing success in Springfield remains the focus of intense fighting in Congress, the courts, the presidential campaign and in the marketplace. More than a dozen cities and states have followed Springfield's lead, ignoring the admonitions of Bush administration officials and drug companies who say purchasing medications outside the United States is dangerous and illegal. In the face of such pressures, however, several others have put importation plans on hold or adopted more modest initiatives, such as creating informational Web sites.
Regulators at the Food and Drug Administration have intensified their dire warnings, yet enforcement has been minimal, largely because they fear the likely political repercussions of targeting sick and elderly patients. Drug manufacturers have responded by tightening sales to Canada in the hopes of discouraging American consumers and turning up the pressure on Canadian officials.
The grass-roots uprising initially injected some life into the push in Congress to make drug importation legal. With polls indicating that more than 60 percent of Americans want to open the borders and many are dissatisfied with Medicare's new drug benefit, pro-importation legislation picked up the support of former opponents such as the AARP and Sens. Edward M. Kennedy (D-Mass.) and Trent Lott (R-Miss.). Democratic presidential candidate Sen. John F. Kerry (D-Mass.) has pledged he would sign an importation law.
But Republican leaders have stalled action on the bipartisan bill in the Senate, and outside Washington, some of the earliest, most vocal proponents have pulled back. Eight months after announcing that purchasing prescriptions in Canada could save his state $91 million, Illinois Gov. Rod Blagojevich (D) has yet to move forward. Nor has New Hampshire Gov. Craig Benson (R), who said six months ago that he intended to supply prison inmates, Medicaid recipients and retired state employees with drugs from Canada.
Industry lawyers say some politicians have heeded warnings they could be liable if an employee or resident suffers because of a tainted or counterfeit imported drug.
"The state is acting as a facilitator," said Jan Faiks, vice president of government relations and law at the Pharmaceutical Research and Manufacturers of America, or PhRMA.
"They are encouraging their citizens to take the risk of drugs coming in from outside the U.S."
The city of Seattle recently rejected a drug import program, but not because of concerns over safety or liability, said Sally Fox, the city's employee health director. To cut costs, Seattle had already instituted draconian measures, requiring city workers to bear 50 percent of the cost of brand-name drugs and 30 percent of generics, she said. If the city waived those co-payments, as Springfield did to entice workers to use its Canadian supplier, "they would stop buying generics and buy brand in Canada, and we'd be on the hook for all of it," Fox said.
Most cities and states say Seattle's co-payment approach would not be feasible, so they are turning to Canada, where identical medications can be as much as 70 percent cheaper than in the United States. The cities of Montgomery, Ala.; Burlington, Vt.; Portland, Maine; and Worcester, Mass., have importation programs. Officials in California and Maryland's Montgomery County are debating importation bills, and Boston plans to begin a pilot project this month.
"The mayor sees this as short-term assistance but not necessarily a comprehensive solution," said Mark Reynolds, assistant to Boston Mayor Thomas M. Menino. "This is more a way of pressing the pricing issue than saving the city money."
The largest government-sponsored program is in Minnesota, where residents and nonprofit groups had long been making bus trips across the border for cheaper prescriptions. After state regulators identified a few safe and reliable Canadian pharmacies, GOP Gov. Tim Pawlenty created an informational Web site for the public and a separate program for state employees that waives co-payments and shipping fees.
In its first two months, the state workers' Web site had 18,000 "hits" and filled about 700 prescriptions, said Cal Ludeman, commissioner of employee relations.
The effort began with just three pharmacies and 50 approved drugs, but with the state saving $192 a year on each drug a participating employee uses, "we plan to expand every part of this," he said.
With a government imprimatur, more people feel comfortable ordering drugs from other countries, said G. Anthony Howard, whose CanaRx Services Inc. partnered with Springfield a year ago. About 1,000 Springfield seniors not covered by the city's health insurance program became CanaRx customers after seeing the savings reaped by their neighbors, he said.
Overall, Americans purchase about $1 billion worth of medications from Canada, compared with the $200 billion spent in the United States, said David Mac
Kay, executive director of the Canadian International Pharmacy Association, which promotes opening the borders.
In communities such as Springfield, where no one is known to have been harmed by a Canadian-bought drug and money remains tight, the anger toward the industry and the FDA is palpable.
"I do see the value in their product," said former mayor Michael Albano, whose diabetic son receives his medications from CanaRx. "Okay, you found a miracle drug in insulin. But that was a long time ago. Do we still have to keep paying?"
Pharmaceutical companies reply that today's high prices are not rewards for the miracle drugs of yesterday, but investments in the miracle drugs of tomorrow.
Many question the FDA's assertions it does not have the resources to oversee Canadian imports or to develop a more secure importation system.
"It seems to me the FDA has the staff to harass a busload of seniors from Minnesota, but it doesn't have the staff to inspect Canadian pharmacies," said John Sullivan, a retired Springfield teacher who cut his drug bill by $800 and saved the city $1,700. "If they wanted to, they could check with Canada and decide which ones are safe."
Ron Dias, a case worker in Springfield's veteran's affairs office, said he has confidence in the Canadian government's ability to oversee its products.
"Most consumers in our position are looking for a bargain," said Dias, 57. "My wife clips coupons. That's the American way: looking for a bargain."
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