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Vermonters' Canadian Imports Flout Big Pharma - and the Law

Local Matters


Published May 15, 2007 at 9:03 p.m.

BURLINGTON - About 90 Burlington employees and family members are saving hundreds of dollars a year in prescription drug costs through a city-run benefits plan that may violate federal law.

Known as BurlingtonMeds, the 3-year-old program gives city workers and their dependents access to more than 200 medications reimported from Canada and other countries. Prescriptions filled there provide Burlington employees with an average estimated savings of 40 percent on the cost of identical drugs purchased in the United States, says Larry Kupferman, director of the city's human resources department. Participants in Burlington Meds also do not have to make insurance company co-payments for their medications.

Employees who take advantage of this benefit plan "think it's the greatest thing since sliced bread," Kupferman says. But is Burlington breaking the law by helping its workers avoid paying the world's highest costs for prescription medications?

"We never drew absolute conclusions as to the legality or illegality" of the program, says former City Attorney Joe McNeil. "To the best of my recollection," he adds, Federal Drug Administration officials never directly threatened legal action to terminate BurlingtonMeds.

Former Mayor Peter Clavelle's administration modeled its initiative on a drug-reimportation plan for municipal workers that Springfield, Mass., pioneered in 2003. McNeil notes that Burlington was careful to follow Springfield's lead in having beneficiaries contract as individuals with the company, CanaRx, that supplies the medications. "The FDA wasn't enforcing against individuals making these decisions, whether by mail order or by actual visits to Canada," McNeil says.

But the feds did threaten action against Springfield for what the FDA claims were unlawful transactions facilitated by the city. However , no moves to punish Springfield were actually initiated.

Springfield saved about $3 million a year through its program, in which some 1500 employees and retirees took part. But it was discontinued last year, leaving Burlington as one of only a few localities in the country willing to risk federal punishment by defying Big Pharma. Drug companies lobby expensively to block access to cheaper alternatives to their ultra-pricey meds.

Earlier this month, for example, the U.S. Senate was persuaded to reject a proposal cosponsored by Bernie Sanders that would have enabled Americans to buy prescription drugs from sources in Canada and other developed countries. The final vote on the bill from which the reimportation plan had been removed was 93-1, with the losing side consisting of Vermont's junior senator.

The Senate-backed measure included provisions strengthening FDA oversight on drug safety. "Safe drugs are obviously important, and there are a lot of good provisions in this bill," Sanders told the Washington Post. "But a safe drug doesn't mean anything to somebody who can't afford it."

Vermont Governor James Douglas has joined Sanders and Burlington officials in the forefront of efforts to force the federal government to side with consumers rather than drug companies. The Douglas administration sued the FDA in 2004 over the issue of importing drugs from Canada. The first such move by a state proved unsuccessful, however, when a federal judge dismissed Vermont's lawsuit the following year.

Vermont has since signed on to a prescription drug program known as I-Save Rx that allows state residents to buy brand-name drugs from Canada, the United Kingdom and Ireland.

Despite such initiatives, Americans' purchases of prescription meds from Canada have declined sharply in the past year.

Experts identify the Medicare Part D drug plan as a key cause for the fall-off, even though seniors are required to pay the full price of prescriptions totaling between $2250 and $5100 per year. In addition, Canada's increasingly muscular dollar has KO'd much of the savings American medicine buyers had enjoyed earlier in the decade. U.S. border agents have also been seizing larger quantities of imported prescription drugs.

Then there are concerns about the safety of prescriptions filled abroad. Kupferman cites this factor as the main reason why only 90 of well over 1000 potentially eligible city employees and dependents have placed orders through BurlingtonMeds. Such worries are unwarranted, he suggests, noting that the drugs reimported from Canada are the same as those sold in the U.S.

Sanders, meanwhile, promises to fight on. In a recent speech on the Senate floor, he recalled a bus trip he organized in 1999 to help Vermonters buy lower-cost drugs in Canada. "We took women with breast cancer over the Canadian border," said the senator. "I will never forget the look on the faces of those women who were struggling for their lives, when they bought breast-cancer medicine at 10 percent of the cost that they were paying in the State of Vermont.

"How do you have a drug manufactured by a company, manufactured in the same factory, put in the same bottles, sold in Canada for one-tenth of the price that that same medicine is sold in the United States of America?" Sanders asked his colleagues. "How can that happen?"