Canada’s prescription drug rates lose luster

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The San Diego Union-Tribune

SACRAMENTO, CA — Last year, many state Democrats and consumer advocates saw Canada as the promised land for cheap prescription drugs.

So why didn’t they even flinch when Canada’s health minister recently announced plans to restrict the flow of drugs to the United States?

By that time, California health care advocates had already decided that Canada couldn’t do much to lower drug costs in the Golden State.

“Drug importation was a very sexy political issue. We thought it should be an option, but it wasn’t a solution,” said Jerry Flanagan, of the Foundation for Taxpayer and Consumer Rights, who has led senior citizens on trips to Canada to purchase drugs.

Canadian imports are not part of the two rival prescription drug measures on the Nov. 8 special election ballot. Further, only one of more than a dozen related bills in the Legislature encourages buying drugs from Canada.

Last year, by contrast, lawmakers passed four high-profile bills encouraging state agencies and residents to buy Canadian. One group even led senior citizens on trips to purchase Canadian drugs.

What happened to our neighbor from the north?

Fearing a threat to its supply of inexpensive drugs, Canada announced June 29 that it was moving to restrict bulk export sales and hinted that it may also reduce sales by requiring buyers to be seen by a Canadian physician.

Some advocates had anticipated such a move, while others believe that Canada, with a population of 33 million, is just too small to serve California, which has an estimated 37 million people.

Politically, the idea also seems a long shot.

Last year, Gov. Arnold Schwarzenegger, siding with his allies in the pharmaceutical industry, vetoed the Canadian drug bills, closing the door on further importation legislation.

Anthony Wright, executive director of Health Access, said his group’s Proposition 79, which goes before voters Nov. 8, doesn’t include Canadian drugs because of these uncertainties.

But, he said, the issue is still just as important.

People stung by the high price of drugs in the United States are put in difficult situations every day, Wright said. Some have to choose between buying life-saving drugs and paying the rent.

Proposition 79 relies on the concept that Canada uses to obtain lower prices through its national health system: bulk purchasing.

“We have an opportunity because we are such a large state to use our own bargaining power more effectively,” Wright said.

Under the initiative, funded largely by unions, the state would negotiate cheaper prices with drug companies using the leverage of its huge Medi-Cal program, which provides coverage to 6.8 million low-income Californians.

Companies that don’t participate could have their ability to sell to the Medi-Cal program restricted.

Wright said his measure, which could serve up to 10 million uninsured and underinsured residents, is far more complete than last year’s package of bills, which included encouraging the purchase of Canadian drugs.

“This is a full program that would give discounted drugs to millions of Californians,” he said.

State Sen. Deborah Ortiz’s shift perhaps best illustrates the turn away from Canada.

Last year, the Sacramento Democrat was a champion of encouraging imports from Canada, but her bill was vetoed by Schwarzenegger. This year, she’s dropped importation in favor of a program that relies on voluntary discounts from drug companies.

That legislation, SB 19, has been rejected by the Legislature. But it has been endorsed by Schwarzenegger and forms the basis for the pharmaceutical industry’s initiative on the November ballot, Proposition 78.

Ortiz said she changed her mind because she believed it was better to be practical rather than score a political point.

“I decided to focus on a pragmatic real delivery of discount drugs,” she said.

Union and pharmaceutical industry representatives tried their own version of pragmatism this spring by attempting to cut a deal to avoid a multimillion-dollar ballot battle.

The effort didn’t work.

In the past month, drug companies have contributed about $40 million to pass Proposition 78 and defeat Proposition 79. Last week, Merck & Co. Inc. and Pfizer Inc. each donated $8.5 million to the industry’s ballot measure campaign.

Unions are expected to spend millions on the other side.

Assemblyman Dario Frommer, D-Los Angeles, said he still hopes future discussions might lead to a compromise.

Drug import bill

In the meantime, Frommer, who had a Canadian drug bill vetoed last year, is the only lawmaker sponsoring a major drug import bill. His legislation, AB 73, would set up a Web site that lists certified international pharmacies in the United Kingdom, Canada and Ireland.

Frommer said the way to get cheaper prices is to allow consumers to buy from reputable international pharmacies, while also harnessing the state’s purchasing power.

“The short-term solution is a combination of both approaches,” he said.

He’s also carrying legislation, AB 75, that’s similar to Proposition 79. It would use leverage from the state’s Medi-Cal program to negotiate discounts with drug companies.

Stephen Chang, a San Diego biotech executive who heads a group opposed to imports, said he’s glad that buying from Canada has faded as a political issue in California.

The discounts negotiated by Canada, he argues, unfairly restrict profits, which reduces research budgets and limits medical innovations. “I am pleased,” Chang said. “I think we need to educate California that biotech companies are an economic engine for this state.”

Wanda Moebius, a spokeswoman for PhRMA, the pharmaceutical industry trade association, said she believes the turn away from Canada reflects fears from consumers worried about the safety issues with Canadian imports.

“People are turning to safe, legal programs,” she said.

Other states, however, continue to look to Canada as a solution.

At least 12 states have authorized Web sites that help their residents buy cheaper prescription drugs from Canada.

Nevada became the latest when Republican Gov. Kenny Guinn signed a bill last month approving the operation of a new Web site.

Nationwide, legislators introduced 50 bills this year related to importation, down from 67 last year, said Richard Cauchi, director of the health program for the National Conference of State Legislatures.

In addition, federal legislation authorizing Canadian imports is pending, but considered unlikely to pass.

Safety question

The Federal Drug Administration has been harshly critical of these Web sites, saying they could lead to the purchase of unsafe drugs.

Randall Lutter, an FDA associate commissioner, warned Nevada against importing drugs, saying in a letter that Canadian imports would violate federal law “in virtually every instance.”

In vetoing the Canadian drug bills, Schwarzenegger said last year that importing drugs could expose California to civil or criminal prosecution by the federal government.

But Minnesota’s commissioner of human services, Kevin Goodno, says the state has operated a Web site since January 2004 that facilitates the purchase of Canadian drugs without any problems or prosecution.

Minnesota has inspected the four Canadian pharmacies and two United Kingdom pharmacies listed on the site. Further, all buyers must have their U.S. prescription reviewed by a physician from the nation where the pharmacy is located, Goodno said.

For years, residents of Minnesota have been traveling to Canada to purchase lower-priced drugs. Sen. Mark Dayton, D-Minn., who is independently wealthy, uses his Senate salary to pay for bus trips to buy medications.

“People were buying these drugs anyway. We’re giving people a safe alternative,” Goodno said.

He said the option of purchasing Canadian drugs has worked well for Minnesota. The state’s Web site, Minnesota RX Connect, has recorded 200,000 hits since it started in January 2004 and has filled 13,000 prescriptions.
Contact the author Bill Ainsworth at: [email protected]

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