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Canada makes drug deals with 2 states against fda wishes { October 5 2004 }

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Canadian drug vendor wins deals with 2 states
Springfield's supplier also lands Fall River
By Christopher Rowland, Globe Staff | October 5, 2004

The Canadian pharmacy manager that arranges prescription shipments to Springfield's city employees landed a chunk of new business yesterday, emerging as the sole supplier for a new prescription importation website unveiled by Illinois and Wisconsin.

The pharmacy manager, CanaRx Services Inc., also said that it signed up yet another municipal client: Fall River. In addition to its Massachusetts clients, CanaRx has contracts to provide drugs to city workers in Portland, Maine, and Burlington, Vt.

"It's been a pretty good day. We took a giant step forward," said CanaRx president G. Anthony Howard, a Canadian citizen who runs his business from Windsor, Ontario.

Illinois officials said they expect demand for their new website to be strong. Combined, there are roughly 4 million people in Illinois and Wisconsin who lack prescription drug coverage, the officials said.

Although the practice is illegal, Americans without prescription coverage are buying imports from countries where price controls provide discounts of 20 to 80 percent on brand-name drugs. Estimates vary, but sales from Canada alone are widely estimated to have topped $1 billion a year. Promotional material for the new Illinois and Wisconsin system, I-SaveRx, says its goal is to decrease patient expenses by 25 to 50 percent.

"This is a prairie fire that is building across America," said Illinois Representative Rahm Emanuel, a Democrat, who was joined at a press conference in Chicago yesterday by Illinois Governor Rod R. Blagojevich and Wisconsin Governor Jim Doyle, both Democrats.

The Food and Drug Administration issued a warning letter to CanaRx in September 2003 after it emerged as Springfield's vendor for Canadian drugs. In addition to once again raising safety concerns, the FDA said yesterday it was concerned about what appears to be an escalation in the efforts by states to put imported prescriptions into the hands of seniors.

"This appears to be a whole new ballgame," said William Hubbard, the agency's associate director for policy and planning. "It looks like an aggressive expansion of the whole concept."

Unlike most other Canadian pharmacy services, CanaRx does not run its own pharmacy. Rather, its business is modeled after the so-called prescription benefit managers that administer drug coverage throughout the United States. It has contracts with more than 100 pharmacies in Canada, the United Kingdom, and Ireland and arranges shipments from those pharmacies directly to patients in the United States. The governors of Illinois and Wisconsin, who won support of the powerful AARP for the program, said they have checked on CanaRx's roster of pharmacies and found them safe.

On other state importation websites, such as a previous version established by Wisconsin, and sites set up by Minnesota and New Hampshire, consumers deal directly with pharmacies. In the latest iteration, the states have chosen CanaRx to run the system for them and maintain a uniform system for checking patient prescriptions.

Political leaders have set aside FDA and industry warnings about the safety of imported drugs, calling them a red herring to distract from the high prices charged by pharmaceutical companies.

"There's no reason why our citizens should have to pay twice as much for safe prescription medicines as the rest of the world, but that's exactly the situation we're in because the federal government refused to take on the drug companies," Doyle said. "This initiative gives our citizens other options."

But the use of a single pharmacy vendor, CanaRx, and the states' assurances that the drugs are safe, appears to enhance the states' responsibility for the drugs, the FDA's Hubbard said. "Are they going to accept responsibility if a citizen of their state is injured by one of these drugs and foreign pharmacy won't step up and can't be sued because they are in another country?" he said.

The system does carry a lengthy, fine-print disclaimer that says the states do not legally vouch for the safety of drugs ordered through the website. The states say a number of security and patient-safety measures have been put in place, but the disclaimer also says there are inherent risks in ordering drugs from outside US borders.

"Illinois is not part of the chain of custody of these drugs," said Abby Ottenhoff, spokeswoman for Blagojevich. "They go from manufacturer, to the pharmacy, to the consumer." But the states do not anticipate any problems, because the drugs are the same as drugs found in US pharmacies, she said.

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