On Wednesday, October 16, a new Maine state law took effect permitting its residents to directly import prescription drugs from licensed retail pharmacies in designated foreign markets.
The state of Maine believes the law — the first of its kind in the United States — will empower consumers, allowing them to explore new markets for better deals on prescription drugs, as well as save lives. The American pharmaceutical industry sees things a bit different, unsurprisingly.
American pharmaceutical companies claim that the new law will expose Maine residents to potentially unsafe prescription drugs. They say that because the medications delivered from foreign suppliers will bypass U.S. Food and Drug Administration oversight, the health of American citizens will be put at risk.
Maine officials and proponents of the law have no such reservations. They are confident the foreign markets specified in the law, which allows drugs to be shipped into Maine from licensed pharmacies in Canada, the United Kingdom, Australia, or New Zealand, will provide state residents with legitimate prescription drugs through well-regulated supply chains.
This practice isn’t anything new. In Maine, companies and municipalities have been setting up drug plans with Canadian pharmacies for years. As reported by Portland’s mayor, Michael Brennan, the city has saved $3.2 million between 2004 and 2012 for employees’ drugs through a cross-border plan. (The FDA prohibits such practices, but the agency seldom enforces the ban among consumers.)
To further illustrate the savings as well as the price discrepancies between the United States and Canada, The Wall Street Journal reported that:
Using the broker CanaRx, Portland pays $200.90 for a 90-day supply of 40 mg tablets of the heartburn drug Nexium, and it waives any employee copay. For the same order as negotiated by Portland’s health insurer, Aetna Inc., the city says it pays $621.08, with the employee contributing 25% of that, or $155.27.
In general, Americans pay much more for drugs compared to people living in Canada and European states due to negotiated prices and price caps imposed by the governments of these foreign markets. Price control acts in these countries keep prices of prescription drugs lower than U.S. market prices, even though, ironically, many of the medications are manufactured in the United States.
In a circular result, Maine’s new law effectively permits the re-importation of U.S.-manufactured prescription drugs at discounted prices — a practice the American pharmaceutical industry is (not shockingly) none too pleased about and has been has been fighting for decades. (The industry’s aversion to re-importation prompted PhRMA to file a lawsuit against the state of Maine in September.)
The new law opens up significant direct cost-savings for Maine’s municipalities, companies, and individual residents. Sick, elderly and poor Americans who lack adequate health insurance especially can benefit from a solution that would lower costs for life-sustaining prescription drugs.
Yet the new law is not without safety risks. Many of the pharmacies that advertise themselves online as “Canadian” actually are based elsewhere, and sell products that may not have been approved by regulators in Canada or any other jurisdiction. This type of fraud could pose problems as more Maine consumers go online looking for low-cost medicines.
While municipalities like Portland can avoid safety risks by setting up plans with carefully vetted Canadian pharmacies, finding a solution for individual consumers poses additional challenges. Trade organizations like the Canadian International Pharmacy Association may be able to help by providing a verification process for legitimate online pharmacies, but this practice is relatively new and may not catch all the potential fraud.
Big PhRMA ultimately is probably less concerned with the safety of American consumers as it is with its own financial bottom line. Maine’s officials, for their part, think the safety concerns have been largely over-stated.
“It’s not a safety issue,” said Maine’s Tea Party Governor Paul LePage (R) in an interview with The Wall Street Journal, “It’s turf.”
If the safety of the re-imported drugs can be assured, this new law could be a win-win for consumers and taxpayers by finally harmonizing U.S. drug prices with the rest of the world.
Dave Sterrett is the health care counsel for Public Citizen’s Congress Watch division.