Schwarzenegger Drug Discount Plan Would Result in Less Savings than Reimportation, Study Says

State residents would save more money by buying prescription drugs from Canada than they would under Gov. Arnold Schwarzenegger's (R) "alternative" drug discount program, according to a report released Monday by Democratic legislators and patient advocates, the Sacramento Bee reports (Rapaport, Sacramento Bee, 9/28). Health and Human Services Agency Secretary Kim Belshe in August indicated that Schwarzenegger planned to veto four reimportation bills in favor of the CaliforniaRX program, which would provide discounts for residents with annual incomes less than 300% of the federal poverty level.

CaliforniaRX would provide cards that participants could present to pharmacists, who would seek the lowest prices for their medications through state or pharmaceutical company programs. The program would require $3 million in annual funding and would be open to state residents covered by Medicare or residents enrolled in private health plans who need help paying for prescription drugs not covered by their health insurance.

Legislation to create the plan could be introduced early next year, and state officials have said the discount card could be available for about 4.8 million low-income state residents as early as Jan. 1, 2006 (California Healthline, 9/22).

According to the report, the reimportation bills would provide residents with 30% to 50% more savings than under CaliforniaRX (Sacramento Bee, 9/28).

In other reimportation news, Allergan President and CEO David Pyott last week sent a letter to Orange County Supervisor Chuck Smith asking him to reconsider introducing a plan that would allow county employees to reimport prescription drugs from Canada, stating that such medications are "dangerous and a threat to the state and local economy," the Los Angeles Times reports (Pfeifer, Los Angeles Times, 9/28). Smith on Friday announced that he plans to ask the county Board of Supervisors to approve a pilot program to allow county employees to reimport drugs from Canada, possibly through SPC Global Technologies -- a Texas-based company Smith visited last week that facilitates the purchase of prescription drugs from abroad. County officials have said that a reimportation program could decrease county costs by $2 million annually, as well as reduce county employees' out-of-pocket prescription drug costs (California Healthline, 9/27).

Pyott wrote, "Your proposition to import drugs from Canada -- that is illegal under federal law -- is unsafe and I believe is economically unsound for the general economy of Orange County." He added that although drugs from Canada could be identical to those sold in the United States, "Canada cannot be counted on to preserve their purity, potency and safety once they have left the jurisdiction of (U.S. regulators)."

Smith said Pyott's letter would not affect his plan to ask the county board to approve a reimportation pilot program. "If stopping some company from charging inflated prices damages the Orange County economy, then we're in big, big trouble," Smith said, adding, "I'm interested in saving people money more than helping some company make huge profits."

David MacKay, executive director of the Canadian International Pharmacy Association, said, "It's really inappropriate for these pharmaceutical companies to try to smear us because we're selling their products. If harm ever came to an American consumer (from a medicine purchased in Canada), they'd have a lot of explaining to do. We're just the pass-through" (Los Angeles Times, 9/28).