O.C. Eyes Canadian Drugs

Orange County officials say they could save more than $2 million annually by allowing county workers to buy prescription medication from Canadian pharmacies and are pushing to become the first county in California to give workers such an option.

Last month, the county sent a Health Care Agency executive to Canada to study pharmacies that export drugs to the United States, a practice that provides considerable savings to U.S. consumers but is banned by the federal government. County officials also have been in talks with a Texas company that could help Orange County employees buy discounted drugs from Canadian pharmacists.

The issue has attracted growing interest from local and state governments around the country wanting to reduce employee healthcare costs. Because of Canadian government regulations, prescription drugs in that country are as much as 80% cheaper than those in the United States.

Los Angeles city officials are considering a proposal to purchase drugs from Canada and make them available to city employees and the public. City Councilman Dennis Zine estimates the program could save the city $10 million annually.

In Sacramento, lawmakers approved a package of bills last month allowing for the importation of drugs into California. However, Gov. Arnold Schwarzenegger’s staff has said it is likely he will veto the bills because they conflict with federal law.

Orange County Supervisor Chuck Smith said he took interest in Canadian drug imports after learning that several cities around the country, including Springfield, Mass., and Montgomery, Ala., saved considerably by allowing pharmacists north of the border to fill employee prescriptions. He said he’s also interested in exploring drug purchases from other countries in the event the demand is too great for the Canadian supply.

The Food and Drug Administration has said repeatedly that it is illegal to import prescription medicine from foreign countries. Smith is not swayed. He says that except for price, drugs sold from Canada are identical to those sold in the United States.

“I’m confident we can get this done. How many cities have done it? If they can do it, we can do it,” Smith said. “Right now, it’s debatable if it’s breaking any laws by dealing with Canada.”

Smith plans to travel this month to Texas to meet with a pharmacist who runs a company that brokers drug purchases from Canada. That company helps employees in Montgomery, Ala., buy their prescriptions from a Canadian pharmacy, saving the city $400,000 to $500,000 in its first year, according to an Orange County staff report produced at Smith’s request.

The idea has support from others on the Board of Supervisors.

“It’s something certainly worth looking at,” said Orange County Supervisor Chris Norby. “If we can take advantage of these savings, it’s something we need to do.”

Supervisor Bill Campbell said he would support the idea as long as it was safe and legal.

“Tell the lawyers to find a legal way to do it,” Campbell said. “I’m driven by trying to reduce costs. One of our biggest costs is the healthcare plans. If we can do that and still get good-quality prescription drugs for our employees, it’s a win-win.”

Paul Stein, president of the California State Assn. of Counties executive committee, said he knew of no county in California that has made Canadian drugs available to employees. He spoke to Smith recently about the idea.

“I think he’s on to something that could pay big dividends for county employees,” Stein said. “There’s going to be some hurdles, obviously [with the FDA].”

An estimated 1 million Americans purchase their prescription drugs from Canada, either on the Internet, at U.S. stores that sell imported Canadian drugs or through the mail, spending about $1 billion per year. FDA officials have said they do not punish individuals who purchase drugs from Canada, but the agency has shut down wholesalers importing large amounts.

Zine, who in February introduced legislation to make Canadian prescriptions available to city employees and residents, said that unless something is done to reduce the cost of prescriptions in the United States, government officials will continue to look for alternatives.

“The momentum is growing. The bottom line is, we’re going to save money for the consumers,” he said.

“It’s moving forward at the snail’s pace of government. But it’s moving forward.”