North Of The Border Springfield Buying Canadian Medicine

In a move sure to be watched closely by other communities, the city of Springfield recently launched what might be the nation’s first municipal program to buy prescription drugs from Canada.
Mayor Michael J. Albano claims the program could save the city between $4 million and $9 million annually because many of the prescriptions used by city employees in the program are 20{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} to 80{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} cheaper in Canada due to that country’s favorable exchange rate.

“We’ve been trying to contain health care costs since I took office in 1996, and we haven’t been successful to date,” Albano told The Healthcare News, explaining that municipal health care costs have more than doubled — from $32 million to $67 million — over the past seven years, and are expected to jump another 15{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} to 20{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} by 2004.

“You can’t control hospitals, and you can’t control doctors,” Albano said — but he took a lesson from Americans who buy Canadian prescriptions on the Internet and senior citizens who drive north of the border for their medicine, and decided the city could take some control over prescription costs by buying Canadian as well.

The result is a program that already has some 700 participants so far and is attracting other municipal workers into the fold — while drawing a cautious eye from some health law experts, who wonder whether Springfield is breaking federal laws that bar anyone but the manufacturer from importing drugs into the U.S.
But Albano argues that the government has said it won’t crack down on individuals purchasing Canadian drugs, and by making Springfield’s program a voluntary, individual decision, he says he has stayed within the bounds of the law as well.

Time will tell whether the U.S. Food and Drug Administration (FDA) has more to say on the Springfield program, but for now, the mayor says, the cost savings are real, both to the city and to the families in its health plan.

Financial Health

Cost savings in Springfield are no minor matter. The city budget for fiscal year 2004 totals $393 million, a decrease of $9.7 million over the previous year. Albano said any strategy that minimizes layoffs and reductions in services needed to be considered, and the Canadian prescription program seemed an obvious candidate.
“It’s clearly no secret that people are going to Canada to get their prescriptions, either on the Internet or, in the case of senior citizens, getting on buses,” the mayor said. “So we took a walk.”

That “walk” was a trip to Windsor, Ontario in early spring, during which Albano toured pharmacies, talked with physicians and other health care specialists, and examined the procurement process for medication. He came away convinced that the operations are safe, despite the official U.S. stance that preventing a free flow of foreign medicine protects against phony or altered drugs entering the States.

“If I was in Ontario on a vacation and my son had to go to a hospital, and they gave me a prescription, I wouldn’t come back to Springfield to get it filled; I would go to a pharmacy in Canada,” Albano said. “You don’t hear about Canadians falling by the wayside for using what’s available in that country.

“I don’t understand where that’s coming from,” he continued. “It makes no sense to me. I have seen the practical application of the process, and it’s no different than me going to the CVS on Sumner Avenue. There’s just no difference.”

CanaRx Services Inc., the company providing the medication in the program, has stated that all prescriptions involved must meet FDA approval. And, as if to reinforce the point about safety, Albano has been giving his diabetic son Canadian medications since the spring.

“I sent my son’s prescription up there from my pediatrician,” he said. “The medicines came, and then we had a second prescription filled in June with no problems. The medicine is safe.”

The annual cost savings for his son’s diabetes medications alone will total $852 for taxpayers and $250 for his own household. That figure should not be lost on city employees who didn’t see raises in this budget-strapped fiscal year, he said.

“All wages were frozen this year, so to many, going to Canada and not having the co-pay would be a pay increase,” Albano said.

National Debate

Before the Canadian program was instituted, the city spent $18 million yearly on prescription drugs through its health plan. The $4 million to $9 million savings Albano anticipates is based on a projection of full compliance — by all 9,000 of the city’s current workers and retirees.

With those types of numbers at stake, the mayor said he was careful to craft a program that would not be overturned.

“We tailored the program to what the FDA has said before Congress,” Albano said. “They said they’re not going to interfere with seniors getting on buses to go over the border, and they’re not going to prosecute individuals who get their prescriptions via the Internet. This program is voluntary and individual — exactly the same as the senior citizen on a bus or the Internet consumer.”

Part of the reason the program remains optional, however, is that it has not been formally accepted by the unions representing teachers and administrators.
However, even if Springfield’s program isn’t enforceably illegal, many voices in Washington want stricter rules against the importation of Canadian drugs.

“The overall quality of drug products that consumers purchase from licensed pharmacies in the United States is the highest in the world, so that Americans can be confident that the drugs they use are safe and effective,” Mark B. McClellan, the U.S. Commissioner of Food and Drugs, testified recently in a letter opposing a bill that would increase access to foreign prescriptions.

That bill, which was approved by the U.S. House of Representatives in late July, would require the U.S. Health and Human Services Department to set up a system whereby FDA-approved medications could be imported from Canada, the European Union, and several other nations. But the Bush administration opposes the measure, and other officials have expressed strong reservations as well.

“A growing number of Americans are obtaining their prescription medications from foreign sources, and in doing so expose themselves to a number of risks to their health and safety,” McClellan said. “Many prescription drugs from foreign sources that either purport to be or appear to be the same as FDA-approved medications are, in fact, of unknown quality.”

William Hubbard, associate commissioner of the FDA, offered similar testimony.

“The FDA is concerned about legislative initiatives that, while intended to provide drug price relief to consumers, would severely damage the system of drug regulation that has come to be known as the gold standard for drug safety throughout the world,” Hubbard told the House Subcommittee on Health. “We remain concerned about any possibility that unsafe drugs may find their way into the American drug supply.”

Tentative Steps

Hubbard has addressed the Springfield situation directly, saying his agency has no plans to step in and block what the city is doing. But he did warn that anyone facilitating the importation of foreign medications could be at risk of prosecution.

Albano, for his part, is confident that Springfield’s Canadian strategy is legal and will guard patient safety while giving the municipality and its employees a tangible financial benefit.

“With all the media attention it’s received, it’s catching on,” he said. Now, as other governmental leaders observe the program’s infancy, he hopes he doesn’t receive the wrong kind of attention from those who might seek to shut the effort down.

For now, Albano has counted the cost — and he likes the prognosis.