Prescription Drugs Introduction

Crossing the Line

erhaps the most publicized of current efforts to save money on drugs is the effort to import them from Canada, where they are dramatically cheaper than in the United States. Ironically, many of these drugs were manufactured in the United States in the first place. Thus, states that want to follow this path refer to it as the “reimportation” of drugs.

There doesn’t appear to be any move to apply this approach to Medicaid, yet. That’s because the state Medicaid programs already get hefty discounts on the drugs they purchase in the United States. But the concept has the potential to save significant sums on medications for state employees, retirees, prison inmates and others that the state covers. “There’s no guarantee that Medicaid officials won’t look into the possibilities here at some point in the future,” says the NCSL’s Richard Cauchi.

Two cities, Springfield, Massachusetts, and Montgomery, Alabama, have been conducting experiments with Canadian drug purchase plans. And about 10 states, including Illinois, Iowa, Minnesota, Vermont and West Virginia, have all considered heading down that path. But they’ve discovered a huge “Road Closed” sign posted by the Food and Drug Administration. Although the FDA has long ignored a steady flow of senior citizens crossing the border to buy Canadian medications, it stands firmly in the way of any broad-scale purchase of Canadian drugs.

The FDA’s argument has been based on concerns about the safety of Canadian drugs relative to those in the United States. This argument has drawn fire. Representative Barney Frank of Massachusetts, for example, indicated that he was disinclined to take the safety argument seriously until he hears that “there are a large number of dead Canadians” who were killed by unsafe prescription drugs.

Illinois Governor Rod Blagojevich has been leading the pack to import cheaper prescription drugs, requesting a waiver that would permit the state to purchase Canadian drugs for its state workers and retirees. Estimated savings: more than $90 million a year. The state offered a number of measures to ensure safety of the drugs:

• No drug that was likely to spoil in transit would be imported.

• Orders for drugs would be placed with Canadian retailers that would supply only brand-name drugs in packages that were warranted as unopened from manufacturer to consumer

• Illinois laboratories would test the drugs

• Illinois pharmacists would act as gatekeepers to make sure patients didn’t receive prescriptions that might create harmful interactions.

In December, the Bush administration made its objections clear. “It’s absolutely illegal,” Peter Pitts, an FDA associate commissioner, told USA Today. “There’s no way importing drugs not FDA-approved can be legal in any way or form.”

This was good news for drug manufacturing firms. For obvious reasons, they’ve long opposed reimportation of drugs. Some have even started raising their prices in Canada.

The feds, however, could loosen up. Although the new Medicare bill, signed into law in December, clearly rules out imports, it does authorize the Department of Health and Human Services to study the safety of Canadian drugs.

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