Thursday, January 03, 2008

City begins work with CanaRx

Beginning January 7, 2008, the City of Duluth will begin working with CanaRx, the first company to develop an international prescription supply program designed for large employee groups.

CanaRx will give City employees, retirees and their dependents voluntary access to new sources for name-brand maintenance medications. “This was one of the important parts of the retiree health care task force report,” Mayor Herb Bergson said at a news conference. “The cost savings to the city could be substantial and reduce out-of-pocket expenses for our employees as well. Erik Simonson of the Duluth Fire Department has worked tirelessly on this issue and a number of other health-care related issues and we all owe him a debt of thanks.”

CanaRx brings substantial savings opportunities due to deep discount pricing negotiated between most developed nations (excluding the United States) and the multi-national drug companies. CanaRx has developed programs based on voluntary individual participation in order to comply with FDA directives that allow members to obtain medications for personal use.

CanaRx has contracted with government-licensed pharmacies in Canada, the United Kingdom and Australia. Brand-name medications, packaged by the original manufacturer, are delivered directly from these contracted pharmacies to the member. The company, based in Detroit and neighboring Windsor, Ontario, also maintains large-scale public programs in Ilinois, Rhode Island, Indiana, New York and Massachusetts.

“In comparing the cost of available drugs, the savings to our health plan could be between 30 and 45 percent and the savings to the employee would be 100 percent,” said Simonson, who helped coordinate the program with CanaRx.

As this is a new and completely voluntary program, it is difficult to project savings opportunities for the City of Duluth. However as an example, during the month of November, 2007, 40% of the top twenty five prescriptions filled for the preferred plan group were either Tier One or Tier Two name brand prescriptions.


That 40% represents 59 individual prescriptions in which:

Plan Paid: $16,000
Employee Paid: $3,000
Total Cost: $19,000

If 100% of those same prescriptions had been filled through CanaRx, the cost would have been:

Plan Paid: $10,443
Employee Paid: $0
Total Cost: $10,443
Total Plan Savings: $5,557(35%)
Total Employee Savings: $3,000(100%)

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