Mass. community weighs buying Rx from Canada

SPRINGFIELD, Mass. – Springfield is considering buying prescription drugs for city workers and retirees in Canada in an effort to save anywhere from $100,000 to $5 million per year, city officials say.

“With the budget crisis we have to explore all avenues,” city insurance director Christopher Collins said Thursday.

Older Americans, seeking relief from high prescription drug prices, have turned increasingly to pharmacies in Canada where the cost of prescription drugs is drastically cheaper, because of government controls and a favorable monetary exchange rate.

Collins and Joseph Raulinaitis, a regional spokesman for the U.S. Food and Drug Administration, said they didn’t know of any U.S. city buying drugs in Canada.

“We are still in the exploratory phase and our lawyers are reviewing the legality,” Collins said.

The savings to the city of 152,000, which has a self-insured health insurance program for its 9,000 workers and retirees, could be substantial, he said.

“Depending on the participation rate we could save $100,000 to $5 million a year,” Collins said. The city now spends about $9 million annually on prescription drugs.

With the state warning of more cutbacks in aid to cities and towns, Springfield’s mayor has warned the cash-strapped city could find itself with a budget deficit of more than $40 million this year.

The voluntary system the city is considering would operate in much the same way as the mail-order prescription arrangements it has with regional U.S. pharmacies, Collins said. Only, instead of ordering a three-month supply of prescription drugs from a U.S. mail-order house, city workers and retirees would get their drugs from pharmacies in Canada, he said.

To hold down administrative costs, the city would seek an arrangement with the Canadian pharmacies for monthly payments similar to the arrangement it has with U.S. pharmacies, he said.

“It’s an intriguing idea,” said Raulinaitis.

He could not immediately say how the FDA’s lawyers would view an arrangement in which a city essentially acted as a clearinghouse for its insurance plan members to obtain the prescriptions in Canada.

Although technically a violation of FDA regulations, the agency has not cracked down on individuals importing U.S.-made drugs for personal use.

And recently, UnitedHealth Group Inc., the country’s biggest health insurer, announced it would reimburse members of a prescription plan offered by the American Association of Retired Persons for prescriptions they had filled in Canada and other nations.