State to start importation of Rx drugs Gov. Baldacci defies feds in move to lower drug costs

AUGUSTA – Maine will challenge the federal Department of Health and Human Services by initiating a program to re-import drugs from Canada, Gov. John Baldacci announced Thursday.

The state can’t wait, the governor said, for the federal government to enact reforms that ensure affordable access to medications for all Americans and will instead take action on behalf of Maine citizens.

The plan presented during a State House press conference Thursday has been in development for several years and, when combined with legislation passed last session, is expected to provide savings of 25 to 50 percent to an estimated 325,000 uninsured and underinsured Mainers.

With a $400,000 grant from the state’s office of Economic Development, the Penobscot Nation will refurbish an existing facility on its Indian Island property in Old Town to be used as a warehouse for prescription drugs imported in bulk from Canada and delivered to Maine by truck.

The drugs will be warehoused on the island under secure and climate-controlled conditions. Pharmacies throughout the state will be able to purchase stock from the Penobscots at much lower prices than they would pay from manufacturers or distributors and pass their savings on to uninsured and underinsured customers.

The tribe also is exploring the possibility of filling individual mail-order prescriptions for Mainers who participate in state discount programs such as Low-Cost Drugs for the Elderly and Disabled, or DEL. These mail order prescriptions are currently filled by Wal-Mart.

How the drugs will be paid for – the startup capital for the initial purchases – is still undetermined, according to former tribal governor Tim Love, who has been working with the state to develop a plan modeled after a similar system run by the Pequot tribe in Connecticut.

The project offers a significant economic development opportunity with the potential for employing upward of 100 workers, including pharmacists, pharmacy technicians and other skilled employees, according to state Rep. Donna Loring, who represents the Penobscot Nation in the Legislature.

Work on the warehouse is expected to begin immediately and to be completed within two or three months. But with many details left to be worked out, state officials couldn’t say when lower-priced drugs would be available to the public.

The state will work with about 80 specially designated health centers, hospitals and other health care provider sites that are already qualified to purchase medications from manufacturers at prices far below those paid by retail pharmacies. A few of these facilities, such as Bangor’s Penobscot Community Health Center, already have on-site pharmacies where patients can fill prescriptions for much less than they’d pay at a regular pharmacy. But most have not yet taken the complicated and pricey step of going into the drug business, so many uninsured patients still pay top dollar for medications at a retail drug store.

The state also will be implementing its Pharmacy Incentive Program, created during the last legislative session, that provides financial bonuses to rural pharmacies for providing a high level of service to low-income Mainers who participate in MaineCare or one of Maine’s prescription discount programs.

Both groups, the health centers and the rural community pharmacies, are seen as potential purchasers of the cheaper re-imported drugs from the Old Town repository.

Maine is not the first state to propose or implement drug re-importation. Minnesota, Vermont, Illinois, the District of Columbia and several cities, including Portland, Maine, have established programs. Maine’s plan differs in that it proposes to offer affordable drugs to the overall population and not just to state employees or some other targeted group. It also provides the actual drugs, under the supervision and approval of state officials, rather than just providing an opportunity to purchase them through a website, a practice often cited by critics of re-importation as a health and safety risk. By arranging for medicines to be purchased through local pharmacies, the state hopes to keep Maine’s community drug stores viable and profitable.

Drug importation is legal only with the approval of the federal Food and Drug Administration, a sub-agency of the Department of Health and Human Services. While the FDA has not granted its approval to any of the states or cities that have initiated cross-border drug purchasing, neither has it clamped down or initiated legal proceedings.

Baldacci said Thursday he has written to federal Health Secretary Tommy Thompson, requesting official approval of Maine’s re-importation plan. If that approval is denied, he said, the state will still move forward, prepared to meet whatever legal challenges may be presented in the future.

While Republicans have not allowed a vote on the issue this year, President Bush said at a campaign event in August that his administration is looking into re-importation as pressure builds in Congress to allow it.

In a statement commending Governor Baldacci and the Penobscot nation for their plan, Democratic presidential candidate John Kerry urged the Bush administration to drop its opposition to re-importation.

“We can no longer afford a president who turns his back on the problem as drug prices go through the roof,” Kerry said, adding that as president he would work with Maine and other states to ensure access to safe and affordable prescription drugs.

A Republican legislative leader, House Minority Leader Joe Bruno of Raymond, said the programs announced by Baldacci sound good, but won’t help nearly as many people as the governor says.

“This is nothing but political posturing,” Bruno said.

Bruno, who owns 14 pharmacies in Maine and is familiar with the federal drug discounting program, said the plan was “obviously put together by people who have no understanding of the drug distribution network in this country.”

Bruno also questioned how the safety of drugs re-imported from Canada can be assured. But Baldacci’s letter to Thompson said safety concerns will be met in the program he set into motion.

Senate Majority Leader Sharon A. Treat, D-Farmingdale, said she is hopeful Maine’s re-importation plan will pressure the federal government to rethink its hands-off policy on negotiating drug prices. Failing that, she said, it will at least make life-saving medications more accessible in Maine, helping to improve public health and taking pressure off the health care system.

“Sometimes, the only way you move forward is to stick your neck out and see what happens,” Treat said. “Sometimes, what happens is that you change the terms of the debate.”

The Associated Press contributed to this report.