Flagler Government Embraces Socialized Medicine in Striking Drug Deal with Canadian Rx Company

With American pharmaceuticals marking up their drugs for domestic consumers far more than the same drugs are marked up anywhere else abroad, Flagler County employees will soon start getting some of their drugs from Canada. The Flagler County Commission Monday, in a remarkable embrace by its conservative membership of a system made possible only by socialized medicine, voted 4-0 to contract with CanaRx, a company based in Windsor, Canada, and in Detroit.

The plan is expected to save the county 50 percent on its prescription drug costs, while employees may have access to some drugs without co-pay.

The program does not replace whatever existing prescription drug programs employees benefit from. It parallels it, or supplements it only, and does so entirely with name brands rather than with generic brands. Commissioner George Hanns suggested the idea to the administration after hearing about it at a Florida Association of Counties conference.

The plan’s advertised benefits aside, the commission approved it after hearing a brief presentation from CanaRx’s Mark Mousty at the end of a two-hour workshop Monday afternoon, without a documented analysis by the county administration or time for public vetting, nor publicly available background materials. No one from the public addressed the matter during Monday’s workshop.

“Obviously, the savings is the number one reason to do this,” Commissioner Nate McLaughlin said. “This is a huge amount of money.”

CanaRx going back to the early 2000s had developed relationships with state and local governments in Maine to provide low-cost drugs, undercutting American providers. In 2012, the state attorney general, under pressure from American pharmaceuticals, ruled that Canadian pharmacies like CanaRx had to have licenses in Maine to do business there, thus shutting down their ability to sell. The Portland legislature passed a law to get around the ruling. Pharmaceuticals launched state and federal suits to overturn the law under the guise of consumer protection, though there is no evidence that buying drugs from nations such as Canada is any less safe than buying them in the United States. The only evidentiary difference is price.

In late February, a federal judge overturned Maine’s law on the grounds that while federal law permits individuals to import prescription drugs—more than 1 million Americans get their drugs from Canada—companies may not carry out such imports at a state level, as was the case in Maine.

Florida is not immune from legal challenges to the same approach locally. Highland County is the only other government agency running a similar program. Mousty said CanaRx has some 200 clients in the United States, though he did not define the meaning of client.

“It’s a program that is designed first and foremost to save employers money,” Mousty said, particularly with so-called maintenance medication that address such things as blood pressure, cholesterol or heart medication. The program does not offer temperature-controlled products such as insulin or the sort of prescriptions that require frequent adjustments, as with blood thinners, nor does it provide narcotics. In addition, CanaRx requires that any employee prescribed a drug that it makes available must be on that drug for 30 days with his or her current provider before CanaRx sends a 90-day supply.

“If a member is already on a medication coming in, we will give them credit for that,” Mousty said, “as long as they can show they’ve been taking that medication for at least 30 days or more.”

The company has a $1 million liability insurance policy with Lloyd’s. “We’ve never hada  claim on this, but just so you know, Flagler County would be named as an insurer on that as well,” Mousty said.

The company offers medication supplies from pharmacies in Canada, Britain, Australia and New Zealand. “It’s the same medication that the members are getting right now at their local pharmacy or the mail order pharmacy that they’re using,” Mousty said. “They’re coming from a pharmacy in another country.”

There are no start-up fees or enrollment requirements other than providing an enrollment form to one’s doctor, and having the doctor fax it to the company.

“So rather than Walgreens and CVS, we’d do CanRx,” County Commissioner Nate McLaughlin said.

“It’s the same concept as the clinic,” County Administrator Craig Coffey said, referring to the county clinic established a few years ago for county employees. “We give you an example of a $100 prescription that you fill at the local pharmacy. We may be able to buy it for $50, charge the employee nothing. We save, they save. The concept is still the same except we moved on to brand name drugs.”

The savings to taxpayers would be generated through significantly lower costs to the county’s share, based on a comparison between medications CanaRx offers and those that the county clinic provides—only generics are available through the clinic. Based on Mousty’s calculations and 2014 numbers, employees using CanaRx would have saved $19,290 in co-pays, while the plan would have saved the county $145,784 in claims to Florida Blue. That’s assuming 100 percent participation, which the county does not expect up front.

The numbers begged a question from McLaughlin: how could CanaRx provide such low prices, compared to local pharmacies?

“It’s real simple. The United States is the only industrialized nation that does not have socialized medicine,” Mousty said. “If we lived right across the border in Canada, the Canadian government dictates and negotiates directly with the pharmaceutical companies on how much they can sell their medications for, to the citizens of those countries—Canada, Great Britain, Australia, New Zealand, they’re all the same. And they negotiate directly with the pharmaceutical companies at what you see here, which is 50, or almost sometimes 80 percent savings, over what we pay here as U.S. citizens, in a nation that does not have any regulations or controls in place on what pharmaceutical companies can and do charge American citizens for the same meds.” (That is why American pharmaceutical companies realize half their profits in the United States.)