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State Seal Auditor Of Public Accounts
State Auditor Crit Luallen Releases Report on Benefits to Kentucky of Drug Reimportation - Asks Governor to Request FDA Waiver
Press Release Date:  September 28, 2004
Contact:  Jeff Derouen
Phone: (502) 573-0050
Fax: (502) 573-0067
Pager: (888) 222-5670

State Auditor Crit Luallen released a report on potential savings that could be obtained if Kentucky were able to reimport drugs from Canada.  According to the report, which the Auditor's office began in May, Kentucky State Government could save $36.5 million through to the state health care plan and $37.3 million to the state Medicaid program.  An additional $33.8 million could be potentially realized through health plan member savings because of reduced co - pay or co - insurance costs.  The total savings to Kentucky state government and public employees, including teachers, is $107.6 million.  These savings would be annual and recurring.  She called on Governor Fletcher to request a waiver from the Federal Drug Administration in order to begin the process of obtaining these savings.


"The timing could not be better for Kentucky to join the chorus of states and municipalities that are attempting to save millions of dollars without reducing benefits or increasing employee costs," Luallen said at a morning press conference.  "State government spends approximately $5 billion a year on health care and as a watchdog for the taxpayer I want to continually look for ways to save.  As our report concludes, reimportation is a viable means to lower costs for average Kentuckians and state government." Marcia Morgan, who heads the Auditor's Office of Performance Audit, and who authored the report, is former Secretary of the Health Services Cabinet.


Ms. Luallen pointed out that on average drug costs are 40% less in Canada as compared to the U.S.   However, according to the report, the price differential can range from 30% to 80% less on specific drugs.   Several states and municipalities, including Illinois, Oregon, Vermont, and cities as diverse as Springfield, Massachusetts and Montgomery, Alabama have begun debating and embracing drug reimportation as a means to reduce health care expenditures.


Luallen laid out specific action steps she is taking which include urging Governor Fletcher to submit a wavier authorizing drug reimportation to the FDA for consideration, encouraging Kentucky's Congressional Delegation to support reimportation/bulk-purchasing legislation, urging the Kentucky General Assembly to hold hearings and take testimony from stakeholders and experts to explore reimportation for Kentucky, and requesting that the Attorney General examine the possibility of joining litigation filed by other states or pursuing other legal remedies.


"The train is leaving and Kentucky, especially in the midst of a health care crisis, cannot afford to miss it.  We need to begin now to explore ways to gain advantage of the money that can be saved," the State Auditor said.


Last updated: Tuesday, September 28, 2004