Rx import sites fizzle as Medicare expands

By: - February 23, 2006 12:00 am

When Minnesota rolled out its Web site connecting customers to cheap prescription drugs from Canada in 2004, all the signs pointed to a state-federal showdown over whether Americans should be able to buy their medicine from abroad.
Gov. Tim Pawlenty (R) predicted the concept would serve 700,000 Minnesotans a year and save state government $20 million. Illinois and Wisconsin quickly offered their own sites, run in partnership with Canadian pharmacies vetted by state regulators, followed by Kansas, Missouri, Rhode Island and Vermont.
New Hampshire, North Dakota and Washington took the smaller step of simply offering links to Canadian pharmacies from their state Web sites.
Initially, the Food and Drug Administration claimed the state-run import sites were dangerous and likely illegal, and the agency pressured states to back off.
Two years into states’ defiant venture to beat high U.S. drug prices by partnering with pharmacies in Canada and beyond, neither the federal government nor those states have backed down, but both seem to have moved on.
The state portals never proved to be blockbuster attractions. Minnesota’s site, which is open to the general public, filled 10,054 prescriptions in 2005 – many of them to repeat customers – far short of the 700,000-customer mark Pawlenty originally predicted.
Now, the federal government’s Medicare prescription drug benefit for seniors that was rolled out in January is sapping demand for Canadian drugs, including those sold through state Web sites.
The sites include the multi-state Illinois-led I-Save Rx , Minnesota’s Rx Connect and Rhode Island’s RIMeds . Now, even some of their backers describe the Web sites as niche operations that help residents who have no other alternative for finding lower prices.
“It’s still a reliable source to those who don’t have drug coverage. Now more than ever, that should be made available,” said Brian Osberg, the assistant commissioner of health care in the Minnesota Department of Human Services.
Despite plenty of saber rattling, the federal government never sued the states for their import sites. So far, its strongest action has been periodic seizures of imported medicines, including a recent spike in seizures during December and January.
The feds have stepped up seizures before, usually as a way to showcase the dangers of trusting Web sites claiming to sell Canadian drugs. They highlight cases, for example, in which the drugs are either counterfeit or expired.
Vermont has turned to the courts in an effort to lift the federal ban on drug imports, but a federal judge threw out the lawsuit against the Bush administration in September. The state wanted to let its employees buy Canadian drugs, but U.S. District Judge William Sessions said he could not force the FDA to change its stance.

In Maryland, Montgomery County Executive Doug Duncan, a candidate for governor, indicated the county will file its own lawsuit against the FDA over the policy.

Minnesota and Illinois run the two largest state importation programs designed for the general public. The two have seen usage drop by nearly 20 percent from the average over the last few months, as seniors considered whether to sign on for the new Medicare benefits.
Illinois’ I-Save Rx and Minnesota Rx Connect sold a combined total of 1,641 prescriptions in January, compared to nearly 2,400 in August.
Minnesota’s separate importation program for state employees has fared better. Employees can buy prescriptions of certain drugs without paying a co-payment by ordering from a Canadian pharmacy. The program fills more than 500 prescriptions a month and hasn’t seen the declines in recent months that the program for the general public has.
Canadian pharmacies report seeing a drop-off in U.S. orders in the wake of the new Medicare benefit, said Andy Troszok, the president of the Canadian International Pharmacy Association who also heads Extended Care Pharmacy in Calgary.
An exception is Rhode Island, where Secretary of State Matt Brown launched the Web site linking customers to foreign pharmacies. His office said it hasn’t seen a decrease in usage since Medicare drug coverage started. A Brown spokesman did not provide further details.
Besides low usage rates, there are signs that political support for state-led importation efforts may be waning.

Last year, Republicans in Kansas pushed legislation that would have halted the state’s import efforts, but the bill stalled before making it to the full House.
This year, Democratic legislators in Minnesota want to start a new drug-purchasing program that would keep money spent on prescriptions in the state, rather than sending it to Canada and other countries.

On Feb. 22, Pawlenty announced that he, too, is looking for ways to use state buying power to lower prices for Minnesotans who shop at their local pharmacies. Pawlenty’s proposal, unlike the Democrats’ plan, would apply only to low-income residents and seniors.

When the Democrats unveiled their proposal, they questioned the effectiveness of the Web site pushed by Pawlenty, one of only two Republican governors so far to sign up his state for a drug import site.

According to the Minneapolis Star Tribune , House Minority Leader Matt Entenza (D) called Minnesota’s experiment with imported drugs a “failure because it’s barely been utilized, and it’s taking away business from Main Street pharmacies.”
In an interview with Stateline.org , Rep. Tony Sertich (D), the lead sponsor of the Democratic plan to use bulk purchasing to get Minnesota customers better drug prices, said his plan wouldn’t pull the plug on the online pharmacy but would offer a better alternative.
“Why are we sending our money to Canada? Why can’t we figure it out for the folks who are here?” Sertich asked. Unlike Pawlenty’s Web site, the Democratic plan would appeal to seniors who aren’t Internet-savvy enough to purchase medicines online, he said.
The initiative would let the state buy drugs on behalf of Minnesota residents, much as it does now for prisons, mental health hospitals and other public health facilities. The complicated part would be figuring out how to refund customers for rebates received by the state, Sertich said.
Other states that have experimented with drug importation also are trying new techniques to procure lower drug prices for their residents.
In Kansas, Gov. Kathleen Sebelius (D) is promoting a new prescription assistance program she launched in January. The initiative, dubbed Community Rx Kansas , allows uninsured people living at less than twice the federal poverty level (,600 for an individual) to receive discounts on specific drugs, most of them generic.
Kansas is one of four states that joined I-Save Rx, spearheaded by Illinois. In all, 263 Kansans have joined the drug-import program and filled 859 prescriptions, according to Karen Braman, a top Kansas administrator on health care issues.
Wisconsin not only joined I-Save Rx but also hosts its own Canadian drug site, which averages more than 200 orders a month. The I-Save Rx site allows users to order online; the Wisconsin version provides order forms and requires customers to mail in their orders.
In addition, Gov. Jim Doyle (D) has focused his efforts on maintaining the state’s Senior Care program, which allows its 90,000 enrollees to buy their medicine for the same price the state pays for the drugs through its Medicaid program, said Stephanie Marquis, a spokeswoman for the Wisconsin Department of Health and Family Services.
The initiative is available to seniors who pay $30 a year and complete a one-page application, but Doyle had to meet with U.S. Health and Human Services Secretary Michael Leavitt to ensure the federal government would continue to allow it to operate, Marquis said.
Still, advocates aren’t giving up on drugs from Canada or other countries just yet.
The seniors’ group, AARP, which pushed both to legalize drug imports and add prescription coverage to Medicare, continues to promote buying drugs from abroad. Half of the group’s membership is between the ages of 50 and 65, which makes them ineligible for the Medicare drug benefit.
The AARP has had limited success in Congress. In 2003, it backed a measure to allow Americans to import medicine that passed in the U.S. House but languished in the Senate.
“The drug manufacturers are the only ones who can import prescription drugs from abroad. Our membership is still very much interested” in allowing consumer imports, said Anna Schwarmlein, a senior legislative representative for AARP.
Troszok, the president of the Canadian pharmacist group, said state importation Web sites shouldn’t be viewed as a failure because of their low usage rates.
“Maybe the big numbers are not going to be there. But (the sites) are there for people in need, and they’re helping people in need,” he said.

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