Maine first state to legalize buying prescription drugs abroad

In an effort to reduce health care costs for its residents, Maine has legalized the importation of prescription drugs. The law may help save money, but many, including the pharmaceutical companies, argue that the practice is dangerous. Don Dahler reports

(CBS News) Maine became the first state this October to legalize buying prescription drugs from abroad.

It's not uncommon for Americans to cross the Canadian border for cheaper medicine, but while the Food and Drug Administration would often turn a blind eye, it remained illegal -- until now.

Now, some are wondering if a system meant to save money could come at the cost of safety.

For years, Robert Rosen received his cholesterol medication that would ordinarily cost $30 a refill for free. Rosen opted into a system that let him order the drugs from Canada. Rosen said, "I never had any side effects, so in my mind, they were all perfectly safe."

It was a partnership between the City of Portland and a Canadian prescription provider, CanaRx. By side-stepping the prescription drug plan offered by his insurance company, Rosen was able to purchase prescribed medications from Canadian pharmacies at significantly lower costs. The City of Portland would cover the entire cost of his medication.

In September 2012, then-Maine Attorney General William Schneider halted the program following growing pressure from pharmaceutical companies. But local lawmakers, concerned with the rising cost of health care stepped in, and earlier this month, they not only reinstated the practice, they made it legal.

Portland Mayor Michael Brennan, a major proponent of the law, said, "It allows us to re-institute a program that has been very successful in the city. ... Cities across the country are looking at ways to reduce health care costs. One of the most significant cost drivers within health care is the cost of pharmaceutical or prescription drugs."

Brennan says ordering drugs from abroad saved Portland employees more than $3 million from 2004 to 2012.

The average American spends nearly $900 a year on prescriptions, down from 2011. But according to CanaRx, purchasing medications abroad can cut the cost of each prescription by half.

Still, the local and national pharmaceutical industry is suing the state over the ruling. They claim it's not just about losing profits, arguing the law "puts Maine residents at risk of serious harm."

Foreign drug companies are not monitored by the FDA. Though a prescription might be imported from Canada, production of that drug may have been outsourced by the Canadian company to a country with few safety regulations and buyers may end up with counterfeit or dangerous medications.

Safety has been an issue in the past. In 2003, CanaRx was warned twice by the FDA for shipments of insulin that were not kept at proper temperature. They no longer distribute medications that need refrigeration.

In a statement, CanaRx told CBS News they have not heard from the FDA since, and they have never had a negative incident.

But Kenneth McCall, a Maine pharmacist who opposes the bill, says he believes this is a bargain with too high a cost. "There hasn't been any oversight, and certainly, it's easy to claim that you're perfect when no one is watching," he said. "But that's what we think is a significant public safety concern is that there's absolutely no accountability in this bill. No protection for people in Maine."

Still, Portland has already reinstated the program, which could save the city and its employees more than $400,000 annually.

Watch Don Dahler's full report above.