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March 19, 2013 | last updated March 19, 2013 2:14 pm

Imported drugs spark renewed debate

The battle over allowing Maine employers to buy cheaper prescription drugs from Canada as part of their health plans is raising policy questions in Augusta that have long challenged federal regulators over the fairness of foreign competition and the safety of imported drugs.

State employees, the city of Portland and the Guilford-based Hardwood Products Co. say they saved a collective $10 million over several years through drug purchasing agreements with distributor CanaRx, which serves around 300 entities in 18 states in the United States. Those self-insured Maine parties are now fighting for passage of a bill that would again allow the international purchases banned last August in a ruling by former Attorney General William Schneider.

The bill, sponsored by Sen. Douglas Thomas, R-Ripley, would sidestep the former AG's decision by specifying that licensed mail-order pharmacies in Canada, the U.K., New Zealand or Australia dispensing drugs to an individual Maine resident "do not constitute the practice of pharmacy."

"There is a quirk in Maine law that says that the state has to license any pharmacy [mailing] prescriptions to customers in the state, but in another section, they say that the state doesn't have the authority to license any pharmacies outside of the U.S.," says Chris Collins, senior program adviser for CanaRx.

Until last summer, the Canadian drug broker had been supplying prescriptions to 819 state workers, 94 employees of Hardwood Products Co. and had filled some 17,000 orders for Portland city employees, helping them save from 30% to 80% on their prescription costs, according to Collins.


The bill, set for a work session Friday, has met with debate at the State House, with some Maine pharmacists, industry trade groups and supermarket chain Hannaford testifying against the proposed legislation.

In a written statement to the Legislature, the Pharmaceutical Research and Manufacturers of America "urges legislators to consider the safety and liability concerns associated with importing and facilitating the importation of pharmaceuticals from abroad," warning that pharmacies that claim to be Canadian, Irish or British over the Internet might have no ties at all to [those countries] ... and many pharmacies based in these countries obtain their drugs from Third World sources such as India, Thailand and the Philippines.

The arguments echo those of FDA regulators, who first took aim at CanaRx in 2003 in a warning letter to the company's Detroit-based operation, touching off a debate that continues. Corman Selig, a pharmacist and director of professional affairs for The Pharmacists Society of the State of New York, echos PhRMA's concerns about drug quality and safety and takes exception with what he perceives as a bias toward individual consumers.

"What's very interesting to us is that you have municipal entities importing drugs, which is something a pharmacist [in the U.S.] cannot do," he says.

But Collins says the pharmaceutical industry dramatized the economic impact of international mail-order drugs.

"They think it's this huge amount, but they haven't really looked at actual utilization [of mail-order drug programs]," says Collins.

Selig says that while he has not seen an increase in such programs within his own state recently, they do exist and he says they are frequently located in less populated counties looking to save money on their employee benefits.

In saving money, Selig says these programs "certainly do" take business away from local pharmacies, though his primary concern in lobbying remains consumer safety.

"I look at what's in the best interest of the public," Selig says, "and to me, there are concerns as to what's in that pill bottle."

Selig says many in his industry, himself included, are seeking input from the FDA on how the federal government might "draw a curtain [saying] that only drugs manufactured under the auspices of the FDA would be delivered to patients in this country," he says.

In the past, that has largely meant drugs manufactured in the U.S., but the FDA has made recent efforts to expand regulations and procedures for approving drugs originating abroad, as outlined in a study of substandard, falsified and counterfeit drugs the agency commissioned in 2011.

In late 2012, shortly after Schneider's decision in Maine, the FDA announced taking action against 4,100 Internet pharmacies and launched a consumer awareness campaign about fake online pharmacies.

While a mail-order pharmacy, Collins says CanaRx operates differently than "Internet pharmacies."

"These programs are not Internet pharmacies. They are a network of bricks-and-mortar pharmacies in four countries," Collins says. "We're dealing directly with real pharmacies and pharmacists in countries that have laws and regulations that are at least as strong as those in the U.S., and maybe even stronger."

Scott Wellman, CFO of Hardwood Products Co., says employees at his company experienced no problems or safety concerns associated with the imported drugs.

"The quality and consistency were great," Wellman says. "We had 94 employees using [these] for six years and we never had a problem."

Wellman says the bill has the potential to set a precedent for other states looking to ban or allow the importation of international mail-order prescriptions. "I think the [pharmaceutical industry] is worried that once you specifically allow this, it opens the door for other states to do the same," he says.

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