City launches program to buy imported drugs

Mayor Thomas M. Menino sent a strong message to Congress and the pharmaceutical industry yesterday by launching a pilot program to permit city employees and retirees to purchase prescription drugs from Canada.

Unlike smaller, cash-strapped communities like Springfield that already have Canadian importation plans to save money, the Boston initiative will pack more of a political than fiscal punch--especially coming less than a week before Boston lands in the spotlight with the Democratic National Convention.

While the program is open to 14,000 people, city officials expect only a small fraction to participate because the incentive is small. The city is waiving co-payments for the Canadian option, but it is keeping co-payments for domestic orders at a relatively low $10. Savings for an individual would amount to just $40 a year over a domestic drug received through the mail.

As a result, the city projects it will shave just $1 million off its $60 million annual drug bill. City officials say they want to see if the pilot program works before expanding it to a larger pool of employees for potentially greater savings. Raising the co-payments of domestic drug orders to create a bigger incentive for workers to buy Canadian drugs would require negotiations with city unions.

The plan makes Boston the nation's largest city to open a channel for importation of low-cost medicine from Canada, a practice that is illegal in the United States. The program promises to give the issue extra heft in the election-year debate over national drug costs. Menino's initiative includes links on the Boston City Hall website where Massachusetts residents can find Canadian importation websites maintained by Minnesota and Wisconsin.

At a news conference attended by elderly residents yesterday, Menino denounced the Bush administration for not approving a legal importation plan that would supply brand-name prescriptions from countries with government price controls. Drugs from Canada and other western countries are often made in the same factories as brand-name pharmaceuticals sold in America, but they are up to 20 to 80 percent cheaper because of the price controls. Menino also said Congress should pass pending legislation that would permit prescription importation.

''If they won't do it, we've got to take the issue into our own hands and do it ourselves," Menino said.

The mayor shrugged off safety, liability and other concerns that have been raised by the Food and Drug Administration. The city sent inspection teams to bidders and studied their operations. The winning bidder, Alberta-based Total Care Pharmacy, which will supply the city with drugs for one year, said it spent ''tens of thousands" of dollars on new bar-coding and scanner equipment to satisfy the city's safety demands.

But the FDA, denouncing the mayor's move as potentially dangerous, said yesterday that it has conducted a review of Total Care Pharmacy's operations and has detected problems, which the agency declined to identify. William Hubbard, the FDA's associate commissioner for policy and planning, said the details of those safety concerns would be disclosed today at a Washington hearing and in a letter to officials in Wisconsin, who have listed Total Care as a certified vendor on that state's imports website.

Dave Robertson, a pharmacist who is president of Total Care Pharmacy and appeared with Menino in Boston yesterday, said he did not know what the FDA had in mind.

''I have no idea what that is. They have not notified us of any issues," said Robertson.``Wisconsin hasn't complained. A customer hasn't complained."

PharmacyChecker.com, an independent website that tracks drug prices, said this week that it has identified Total Care Pharmacy among pharmacies that are shipping drugs from Israel, Chile, Australia, New Zealand and the United Kingdom. The FDA has said opening importation to a greater number of countries increases the risk to American consumers.

Robertson said Boston clients would not be receiving any drugs from sources outside Canada, under terms of the city's contract.

While importation of these drugs is illegal, the FDA has declined to take action against individuals and governments but has sought to discredit the practice with warnings about safety. It has conducted sweeps of customs depots and identified what it called ''unapproved" drugs, or drugs with labels and packaging that have not been approved for use in the US.

Despite the FDA warnings, there have been no reported deaths or injuries associated with the rising number of Canadian imports. After Springfield launched the country's first broad municipal program last July, Menino studied the issue and said in December that Boston would follow suit.

City officials downplayed the timing with the Democratic National Convention and insisted it was coincidental. Nonetheless, the program promises to generate plenty of buzz next week when delegates and importation advocates from around the country converge on Boston. It also promises to produce grumbling from top pharmaceutical and biotechnology companies.

A half dozen of them -- including Genzyme Corp., AstraZeneca Pharmaceuticals LP, Merck & Co., Novartis AG, and Pfizer Inc. -- have a research or manufacturing presence in Massachusetts and are major sponsors of the Boston 2004 convention host committee, with contributions of between $250,000 to $1 million that is likely to win them access to decision-makers.

Several pharmaceutical and biotechnology companies yesterday expressed their continuing opposition to imports and said they opposed Menino's plan. None of the companies said Menino's initiative would affect their participation in the convention.

Before unveiling his import plan, Menino toured an Allston plant of Genzyme Corp., one of the state's biggest biotechnology firms. The Massachusetts Biotechnology Council criticized Menino over the juxtaposition of events.

''He stood on a podium celebrating Genzyme's (plans for a) new facility in Allston, while at the same time he enacts a program that will harm that same industry," said Mark Trusheim, interim president of Mass Biotech. ''It's unconscionable."

Speaking about importation, Henri Termeer, Genzyme's chief chairman and chief executive, called the policy ''a Band-Aid."

''Its very much an opportunistic thing to do, but its not a long-term mechanism" to make drugs affordable, he said.

Menino responded that he is attempting to balance economic interests of both sides. ''I support life sciences, its creation of jobs and research they are doing," he said. ''At the same time, I'm trying to get the best pharmaceutical cost for my constituents."

Jeffrey Krasner of the Globe Staff contributed to this report. Christopher Rowland can be reached at crowland@globe.com.