State-Federal Dispute Looms on Drug Imports; HHS Calls Pilot Projects 'Illegal, Unsafe'

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More states and cities are pressuring the federal government to allow them to import prescription drugs from Canada, where the drugs are sold cheaper, and a state-federal feud is brewing.

Current law prohibits the practice unless the Food and Drug Administration can guarantee that the drugs coming into the country are safe, which neither the Clinton nor Bush administration has been able to do.

"Twice the conclusion was reached that we could not guarantee the safety ... so therefore [it] could not occur," said Bill Pierce, spokesman for the Department of Health and Human Services, which includes the FDA. "Nothing has changed since that time," he said, implying that the states and cities will not get their way.

Some local and regional leaders have been asking the government to approve limited drug-importation pilot programs. They say the newly passed Medicare law allows HHS to sanction such programs.

Illinois Gov. Rod R. Blagojevich - a strong proponent of purchasing drugs from Canada, where price controls are in place - is one. He formally asked the administration on Dec. 22 to approve a pilot program under which Illinois would buy drugs from Canada for its 230,000-member state worker and retiree health plan.

Illinois spent $340 million last year on drugs for its employees and retirees. The Democratic governor estimates that the state could save $90 million per year under his plan, which would create a list of FDA-approved drugs that could be obtained safely from Canada, and would institute a state-run program to monitor safety.

"Authorizing our pilot program would give HHS and the FDA the opportunity to see how a program like this works," he said. "They could make changes, adjustments and modifications."

The prescription drugs being discussed are manufactured in FDA-approved facilities worldwide but sell for much higher prices in the United States than in Canada and Europe, said a House Republican aide involved in the issue.

But Mr. Pierce said that even if drugs are manufactured in FDA-approved facilities in Canada or elsewhere, the FDA has no way of tracking them through the country and ensuring that they are stored at correct temperatures and not tampered with or otherwise degraded in quality. …