When President Bush signed the historic Medicare bill into law last month, a provision legalizing the importation of prescription drugs from Canada was not in the legislation, despite the efforts of some lawmakers. However, faced with rising health care costs for current and retired employees, a growing number of local governments still are considering purchasing prescription drugs from Canada, where the same medicines are often drastically cheaper than they are in the United States. By mid-December, about 15 city, county and state governments were exploring such a move.

Some have gone one step further: Last summer, Springfield, Mass., implemented a plan that allows city employees to purchase prescription drugs from a Canadian supplier, and Montgomery, Ala., has had a similar program in place for about a year. In December, Boston announced that it will launch a pilot program this summer in which about 7,000 city employees will have the chance to buy prescription drugs from Canada. Burlington, Vt., and New Hampshire also announced they will begin Canadian drug importation programs.

The new Medicare law does not ban outright the importation of prescription drugs from Canada, but the law permits it only with the approval of Health and Human Services Secretary Tommy Thompson. Citing safety concerns, Thompson has said he will not approve the importation of Canadian prescription drugs.

As of mid-December, it was not clear if or how the federal government would punish state and local governments that adopt a Canadian drug plan. Food and Drug Administration (FDA) officials, who say that prescription drugs from Canada may be unsafe, have met with several local and state governments to warn them of the legal and public health problems Canadian drug plans could present. However, as of press time, the FDA had not taken action against Springfield and Montgomery, apparently the only governments in the United States yet operating importation plans.

Importing prescription drugs from Canada has become an emotional issue that has pit drug manufacturers against local and state officials and many members of Congress, particularly those from Northern-border states, where it has been commonplace for low-income seniors to travel to Canada to buy their medicines. An Associated Press survey in November of “10 popular drugs” revealed that Canadians pay 33 percent to 80 percent less to purchase the pills than Americans.

Former Springfield Mayor Michael Albano, who implemented the city's Canadian drug plan, has estimated that the policy could reduce the city's annual $18 million drug costs by $4 million to $9 million. Albano did not seek re-election last fall, but his successor, Mayor Charles Ryan, has vowed to continue the program.

Montgomery County, Md., Councilman Tom Perez recently introduced a resolution that calls for his county to study whether it should import prescription drugs from Canada to help alleviate fiscal pressures. Perez says the federal government is powerless to prevent state and local governments from contracting with Canadian pharmacies. “The FDA doesn't regulate Montgomery County or the city of Springfield,” he says, noting that it is an election year and unlikely that the White House would endorse a plan to arrest governors or city officials.

Even before Bush signed the legislation into law, Senate Minority Leader Tom Daschle, D-S.D., introduced legislation to rewrite certain parts of the Medicare bill; the legislation includes a provision allowing for importing prescription drugs from Canada. However, election-year politics will make it difficult to pass such a bill this year.

Mark Preston is Washington correspondent for American City & County.