State Auditor Crit Luallen told a House committee Thursday that Kentucky could save more than $70 million annually on Medicaid and employee insurance by allowing importation of prescription drugs from Canada and other countries.

“This report quantifies specific savings Kentucky could achieve,” she said. “Kentucky state government could save over $36 million a year in public employee health insurance and over $37 million a year in Medicaid. This brings the total potential savings to over $70 million annually for state government.

“In addition, public employees — including teachers — could see savings associated with co-payments of nearly $34 million,” Luallen said.

Reps. Tom Burch, D-Louisville, and Reginald Meeks, D-Louisville, have introduced legislation in the House that would follow federal law for certifying re-importation of pharmaceuticals from countries such as Canada, which have similar safety and review regulations. Sen. Denise Harper-Angel, D-Louisville, is sponsoring similar legislation in the Senate.

Luallen said on average pharmaceutical drugs cost 40 percent less in Canada, but some differences range from 30 percent to 80 percent.

She said Burch’s bill would protect the role of Kentucky pharmacists, allowing them to obtain drugs from foreign pharmacies, distributors and wholesalers and then sell them directly to consumers.

Under federal law, drug companies can import drugs approved by the Food and Drug Administration from abroad, but pharmacies and consumers cannot. But the federal Centers for Medicare and Medicaid Services in 2004 approved a multi-state purchasing pool for Medicaid prescription drugs, the auditor’s report states.

Michigan, Vermont, New Hampshire and Alaska pool their collective purchasing power to gain drug discounts for about 900,000 Medicaid beneficiaries.

Contact Ronnie Ellis, a reporter for CNHI News Service in Frankfort, at rellis@cnhi.com.

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