Iowa Looks To Hop on Canadian Drug Bandwagon

September 24, 2003 ( - Chalk Iowa up as the latest state to look north for lower prescription drug prices.

Governor Tom Vilsack, a Democrat, has announced his intention to seek lower-priced prescription drugs from Canada for state employees. The move comes just one year after the Hawkeye State spent $54 million on drugs for 70,000 employees, retirees and their families, up from $44.5 million in 2001, according to a Washington Post report.

That surge in prescription costs led Vilsack to become the second state governor in the past two weeks to ask staffers to draft plans for state health insurance programs to buy medicines north of the 49 th parallel. Earlier in the month, Democratic Illinois Governor Rod Blagojevich directed the Illinois Special Advocate to draft a similar plan for as many as 240,000 state employees and retirees.

Should the moves be ratified, the two states would be following in the footsteps of some other public governments, such as Springfield, Massachusetts that recently enacted a similar plan.Under the Springfield plan, the city entices its employees and retirees to take advantage of the voluntary system by waiving copayments on prescription drugs – currently ranging from $6 to $20 per prescription – for participants who place their orders though CanaRx Services Inc., an Ontario company that mails three-month supplies of prescribed drugs from Canadian pharmacies. Overall, this appears to be a small price to pay for the city that cites savings on drugs ranging from 20% to 80% and ultimately could put between $4 million and $9 million in savings back into city coffers (SeeSpringfield, Mass. Pushes Canadian Drug Order Program).

Critical Eye

However, the plan does have its critics, most notably, the Food and Drug Administration (FDA), which contends the stores violate federal law barring drug importation and pose risks that drugs shipped will be expired, counterfeit or mishandled.

As evidence, the FDA points to a sting operation conducted last month in which the agency allegedly caught the supplier of Springfield’s Canadian drug shipments red handed in the improper handling of insulin, saying when the insulin arrived via regular mail, it was at room temperature, instead of chilled and delivered via overnight mail as it is supposed to be handled to ensure its effectiveness (See FDA Stings Springfield’s Canadian Drug Supplier ).

That sting operation represented the latest move in the chess-match battle between the city of Springfield and the FDA. In August, the FDA Commissioner Mark McClellan urged the city to reconsider its prescription drug plan, fearing that by purchasing from Canada, participants were putting their lives at risk (SeeFDA Calls Out Springfield Canada Drug Buying Plan).

Additionally, late last week the Justice Department asked an Oklahoma judge to issue an immediate injunction against Rx Depot, a chain of 85 storefront businesses that helps process drug orders in Canada. Justice lawyers, working with the FDA, argue the company’s role as a middleman makes it a de facto pharmacy that endangers patients by selling “unapproved” products (SeeFDA Tells Canadian Drug Store Fronts To Cease and Desist).