State eyes Canadian drugs
This is another installment in an ongoing series about the high cost of health care and health insurance.
In September, the governors of Illinois, Minnesota and Iowa grabbed national headlines when they asked their staffs to find ways to cover Canadian prescription drugs with state insurance.
West Virginia has been exploring that possibility for three years, said Tom Susman. "The governor asked us to start looking at it early in his term," he said.
"When we have seniors who must decide whether to eat or buy prescription drugs because the drugs cost so much, it's no longer simply a political or economic issue," Gov. Bob Wise said Friday. "This is getting to be a moral issue.
"We can't wait for Congress. We've got to do all we can here."
Canadian drugs cost, on average, about half as much as their U.S. counterparts.
The U.S. Food and Drug Administration insists that, if you buy a prescription drug from Canada, it's not safe, and you are breaking the law. West Virginia is the fourth state in four weeks to publicly question those assumptions.
"I don't want to raise false hopes that it's going to happen," said Susman. Many questions still have to be answered. "But we're talking with the same people Illinois is talking with."
In late September, PEIA Pharmacy Director Felice Joseph traveled to British Columbia and talked with Canadian officials about multistate bulk buying and reimportation of Canadian drugs.
Friday, she took part in a conference call with employees of CanUSA, a Canadian pharmacy that contracts with the city of Springfield, Mass. They discussed practical problems that would have to be resolved before Susman could provide Wise with a viable plan, she said.
West Virginia spent $476 million on prescription drugs in fiscal 2003, she said, including $116 million for prescription drugs for state employees. With drug prices rising an average of 15 percent a year, PEIA's drug costs have risen 57 percent since 2000, when the overall cost was $66.4 million.
"Anything that will keep prescription drug costs down, we're looking at it," Susman said.
Is it legal?
The governors of Illinois, Minnesota and Iowa all say they expect a legal confrontation with the Bush administration. "This is a question of states' rights," Abbie Ottenhoff, press secretary for Illinois' governor, told the Sunday Gazette-Mail. They may end up in court, she said.
William Douglas, who directs the West Virginia Pharmacy Board, disagrees. "It is disheartening to hear that states are considering risking public safety in order to save money," he said. "It is still illegal and — according to the FDA — unsafe to import drugs from a foreign country."
The Pharmacy Board is trying to shut down Fairmont's order-from-Canada storefront, Discount Prescription Center.
"What proof is there that there is a significant risk?" Iowa governor Tom Vilsack asked the Washington Post. "If there is a risk, let's do something about it."
The FDA has never prosecuted an individual who orders from Canada. But, as the number of Americans ordering from Canada multiplies, the FDA is escalating its efforts to shut down the ways Americans order from Canada.
Illinois takes the position that the federal government has no authority to tell states where to buy prescription drugs, Ottenhoff said.
"Illinois has taken a viable legal position," said West Virginia University law professor Kevin Outterson, who specializes in health law. "It is a good faith interpretation of law.
"Two Constitutional provisions are in potential conflict. On one hand, the commerce clause says that Congress can regulate commerce between the U.S. and foreign lands. On the other hand, states have police power over the health and safety of their citizens, particularly when they're doing it for their own employees and retirees. There is a question of which law prevails."
The health and safety of Illinois citizens is definitely at stake, said Ottenhoff. "We have one out of four seniors skipping drug doses or not taking them at all because they can't afford it. Prescription drugs are eating up our budget, and we've got the worst budget crisis in our history.
"If the federal government isn't going to take action, the states will have to," she said.
"We'll be watching closely," Susman said.
Thursday, Minnesota's governor, Tom Pawlenty, upped the ante. He announced that Minnesota will definitely buy from Canada and also put up a Web site through which all citizens can order from Canada.
"I think, politically, these states are putting pressure on the federal government," said Richard Stevens, director of the West Virginia Pharmacists Association. "They are saying, 'If it's illegal, stop us from doing it.' The question is: What's that action going to be?"
Meanwhile, on other fronts
Many hundreds of miles from the Canadian border, the Wise administration is attacking high drug costs on many fronts. It has:
"We try to take a total system approach," Susman said. "Leave no rock unturned."
Even if the three states win in court, practical questions must be resolved before West Virginia would order from Canada, Susman said. It's not as clearcut a proposition as it might seem.
First, he said, the Canadian supplier would have to agree to work through West Virginia's pharmacy benefits manager. CanUSA wants to be the manager, he said, but he feels uncomfortable with the idea of sending public employee information to another benefits manager.
"We want our information in one place, where we know we can spot possible negative drug interactions.
"People talk about drugs as if they were M&M's," he said, "but I guarantee you, they're not. And my first responsibility is to make sure that we do no harm to our members."
PEIA subscribers buy drugs from a network of approved pharmacies. The network is managed by the state's pharmacy benefits manager, ExpressScripts. Susman said he plans to ask ExpressScripts if it can add a Canadian pharmacy to its network. That could solve the problem, he said. All information would still flow through ExpressScripts.
Another obstacle: Most Canadian pharmacies want the buyer to deal directly with them. But Susman wants the local pharmacist in the loop, he said. Otherwise, there is a real danger, in West Virginia, of clobbering uninsured people.
If West Virginia were to say, "OK, state employees, you can buy directly from Canada instead of through the local pharmacist," local pharmacies would have to make up that loss somehow, he said.
About 99 percent of the 200,000 public employees now covered by PEIA buy through local pharmacies, the PEIA's Joseph said. They are a much bigger percentage of the population in West Virginia than they are in Illinois, for instance. In many counties, they are the biggest employee group.
"If pharmacists lost the public employee business, they would have to pass that loss on to what few remaining people who pay for their prescription drugs," said Stevens, of the Pharmacists Association. Uninsured people and people who have private insurance would be the losers.
So Susman wants to find ways to go through local pharmacists. "If wholesalers could reimport the drugs from Canada, for instance, and distribute them at those lower prices to local pharmacists, I wouldn't have a problem with that," he said.
The pharmaceutical companies definitely have a problem with that. Earlier this summer, the U.S. Senate passed a bill that lets local pharmacies buy from Canada. Soon thereafter, several major pharmaceutical companies announced that they would refuse to sell to wholesalers that resell to Americans. The Senate bill has been stuck in conference for four months.
It's maddening, Susman said. "The Congress could solve this problem for everybody without spending a dime," he said. "They could mandate, for instance, that all Americans get the same kind of prices the federal agencies get. Why don't they do that? Pass on the wealth. Save us all a lot of grief."
Another problem: The Canadian ordering process is cumbersome. First, your doctor fills out a medical form. Then you send that form with your prescriptions to a Canadian doctor, and they validate — or don't validate — your doctor's prescriptions.
"Instead of doing all this Mickey Mouse of having your physician send a medical file to Canada and get one of their doctors to approve it," he said, "we should be able to get those prices here. It keeps coming back to that."
"The bottom line is, states can't solve this problem by themselves," he said. "...Congress needs to step in and mandate Canadian-level prices for everybody, not just state employees."
In 2000, Congress passed a law that allows citizens to buy from Canada, Susman noted. It has never been implemented because it says the Secretary of Health and Human Services must certify the safety of the entire Canadian drug stream.
"It's safe to say that the pharmaceutical companies had that clause put in," said Joel Barkin, press secretary for Vermont's Rep. Bernard Sanders, who sponsored the first buy-from-Canada legislation. The pharmaceutical manufacturers employ more than 570 paid lobbyists in Washington, he said, more than one for each member of Congress.
Wise hopes the multistate group will be an important step toward Canadian-level prices in this country.
West Virginia, Delaware, New Mexico and Missouri are the first states to band together to negotiate drug discounts. "Lots of people have talked about it," Susman said, "but nobody has done it."
The multistate group may be eyeing Canadian drugs, too. They have invited CanUSA to make a presentation in December.
Susman organized the group at Wise's request. Last year, the state saved about $7 million after the four states merged the administration of their employee health plans.
"We've had a lot of interest from other states," Susman said. States are watching to see how it goes. The bigger the group, the bigger the drug discounts are likely to be.
He envisions spreading the benefits further. "If we're successful, we can pull small businesses in."
In 2002, West Virginia received a $1.3 million grant from the Robert Wood Johnson Foundation to explore that very possibility. Susman is planning a way for small businesses to insure employees through PEIA at a cost 20 percent to 25 percent below market costs. Canadian-level drug prices would make that vision possible. Small businesses that buy into PEIA insurance would get those prices.
Ultimately, Wise said, he hopes the group will grow large enough to command major discounts.
"I've joked that we may be leading bus tours of seniors to Montreal," he said. "But that's a short-term solution at best. What we really need is relief in this country, fair prices in this country. We're concentrating on that direction."
To contact staff writer Kate Long, use e-mail or call 348-1798.
You can add to your savings while you wait for the federal government to lower prices
Uninsured people get few deals. Insurance companies negotiate discounts on drug prices. So do hospitals. Uninsured people pay full fare, fend for themselves. Here are fending tips that can save you significant money.
First: Get on the Internet and go to DestinationRX.com. Scroll to the bottom. Click on Press. You will see many articles full of good advice. Look at the Harvard Heart Letter's "7 ways to save money on prescription drugs." At DestinationRx, you can also compare the best U.S. prices for your medication, free of charge.
Caution: Many American online companies do not ask, as many Canadian companies do, what other medications you are taking. If you order online, you lose the local pharmacist advice. So make sure your doctor looks carefully for negative interactions with other drugs you take.
From the Harvard Heart Letter and other resources:
— Kate Long