City finds a cure in drug imports

SPRINGFIELD -- Since last fall, John Sullivan has been taking a daily dose of Lipitor and three other drugs imported from Canada as part of a city-sponsored program. He has a one-word response to warnings from the Food and Drug Administration that his drugs could be unsafe.

"Hogwash," said Sullivan, 77, a retired public schools administrator and widower.

As Mayor Thomas M. Menino of Boston gets ready to defy US government officials and launch a Canadian drug-purchasing plan next month, Springfield's municipal government is wrapping up its first year of an importation program that helped spawn a national movement. Local officials say the program has saved the city $3 million since it began in July -- short of the $7 to $9 million original estimate but still one of the few bright spots in a city on the brink of bankruptcy.

Springfield's Canadian pharmacy provider has been regularly mailing prescriptions to 3,200 employees, retirees, and family members -- out of about 10,000 who would be candidates for the benefit. As participation accelerates, the city expects the savings to double next year to $6 million, almost a third of the city's $19 million annual drug budget.

Participants save, too. The city is able to waive enrollee copayments because buying drugs from Canada, where government price controls keep costs down, is so much less expensive.

Moreover, city officials and retirees report no evidence of counterfeit or unsafe drugs, contrary to repeated warnings from the FDA and the pharmaceutical industry.

"It's as safe as or safer than mail-order in the United States," said Christopher Collins, the city's insurance manager. "There's no reason that I can find that American citizens are being forced to bear the most expensive costs of medications in the world."

Collins said he has heard just one complaint: A woman received an asthma inhaler with an opened box. After checking, Collins learned that a Canadian pharmacist opened the box to affix the prescription label directly to the inhaler, a requirement under Canadian pharmacy regulations.

Big jumps in prescription costs have become a major election-year issue as candidates respond to growing consumer outrage. The Medicare prescription benefit backed by President Bush, a Republican, and authorized by Congress last year has become a national lightning rod, criticized by Democrats and some senior groups who say it does not provide enough of a benefit to seniors.

Bills to legalize less expensive medications from Canada and other Western countries are expected to be debated next month in the US Senate. The House approved a foreign-drug imports bill last year. The Bush administration opposes such legislation, although it has shown signs of softening its position.

Local communities and states, meanwhile, continue to take matters into their own hands. The importation model pioneered in Springfield has been adopted by Pittsfield, Burlington, Vt., and Portland, Maine. Portland signed with the same contractor as Springfield, CanaRx Services Inc., based in Windsor, Ontario. Minnesota, Wisconsin, and New Hampshire have established websites for citizens who lack prescription coverage to link up with Canadian Internet pharmacies. Lawmakers have introduced importation bills in more than two dozen states.

Thomas McGinnis, the FDA's director of pharmacy affairs, said the agency has warned Springfield to stop its importation program and has sent warning letters to CanaRx Services to stop selling drugs to Americans. But McGinnis said the FDA has stopped short of taking legal action to shut the plan down because it is awaiting the outcome of legal proceedings against other Canadian drug suppliers that are importing to the United States. The FDA is awaiting a clear policy signal from the Capitol before it begins a crackdown, he added.

The FDA has not produced evidence of counterfeits in the Canadian drug supply, but it continues to warn that the safety of foreign imports cannot be guaranteed. One potential problem: The Canadian pharmacies are seeking more sources in response to the drug industry's curb on their wholesale supplies.

"They are getting it from someplace, and it's not from legitimate sources," said McGinnis. "It's the perfect storm brewing for the counterfeiters to get into their distribution system."

But absent a legal assault by the FDA, and without direct evidence of counterfeits, demand in the United States is likely to remain strong. Canadian pharmacies are marketing more aggressively and competing on price. When Menino requested bids for Boston's program, he received seven responses from Canadians hungry for the business. The city is now in final negotiations with an undisclosed bidder and is likely to make an announcement on its program before the Democratic National Convention, which begins July 26 in Boston.

Former Springfield mayor Michael Albano, who launched the city's program, has been on a speaking tour about drug imports since leaving office in January.

When Albano first unveiled the Canadian program last summer, he said the city could save between $7 million and $9 million.

Collins gave two reasons why the figures fell short. First, to help drive city employees and retirees toward Canadian purchases, the city boosted the copayments in its traditional prescription insurance, making the Canadian option, with no copays, look more attractive. But the switch was not made until October, three months after the program was launched in July, so participation was minimal then.

Second, Collins said, many city employees didn't understand the program's benefits and may not have read an explanatory mailing from CanaRx because it might have been mistaken for junk mail.

To save $6 million next year, the city hopes to enroll at least two-thirds of the 10,000 employees, retirees, and family members in its insurance program who regularly take a prescription drug.

Whether Springfield's program will be in operation long enough to attract that kind of participation is uncertain, however. Under a $52 million bailout loan that is under consideration on Beacon Hill for the nearly bankrupt city, Governor Mitt Romney -- who has strongly opposed Canadian prescription imports -- would have the ability to appoint three of the five Springfield fiscal overseers on a state control board.

Romney's administration would not say whether the governor would support killing the Springfield prescription plan. "We would not want to presuppose what any control board would do," said Romney spokeswoman Nicole St. Peter.

Ending Canadian imports in Springfield would force 3,200 current participants like Sullivan to resume making hundreds of dollars in copayments.

"We're saving the city money. We're saving the employees money. We're saving the retirees money, " Sullivan said.

Christopher Rowland can be reached at crowland@globe.com.