PORTLAND – More than 200 city of Portland employees and their dependents will be affected by a decision to suspend the dispensing of brand-name prescriptions in Maine by CanaRx.

Portland Mayor Michael Brennan said Sunday night that the suspension of mail-order prescriptions by the Canadian company also will create a $200,000 hole in the city’s annual budget, and he is not certain how it will be filled. About 220 employees use the prescription service.

The city of Portland’s employees have relied on CanaRx prescriptions for eight years, saving them about $3.2 million in prescription medication costs, city officials estimate.

Brennan said the service became an issue after the Maine State Employees Association joined the prescription program earlier this year. That attracted the attention of Maine pharmacies that compete with CanaRx for customers.

“We flew under the radar screen for a number of years. The amount of business we were doing did not affect the pharmacies all that much,” Brennan said.

Earlier this year, however, the Maine Division of Employee Health and Benefits contracted with CanaRx to deliver, by mail, brand-name prescriptions to state employees, their dependents and retirees.

“That got the pharmacies’ attention,” said Mary Anne Turowski, director of politics and legislation for the Maine State Employees Association.

The Associated Press reported that the state employees’ decision to contract with CanaRx could produce more than $3 million in annual savings for the employees’ health plan. CanaRx offers reduced prices to plan providers and does not charge co-payments to participants, which create significant savings.

But Attorney General William Schneider ruled that CanaRx cannot distribute medications in Maine without a license, a decision that the AP said imperils the projected $3 million savings.

The AP reported that CanaRx senior program adviser Chris Collins estimates the ruling affects about 1,200 Maine households, and also creates financial repercussions for Guilford-based Hardwood Products Co., a company that has about 400 employees and has contracted with CanaRx for years.

CanaRx’s licensing status got state regulators’ attention earlier this year after the Maine Merchants Association made an inquiry to the state’s Board of Pharmacy, Geraldine L. Betts, the board’s administrator, said Sunday.

That inquiry prompted a letter from the Board of Pharmacy to the Attorney General’s Office, asking that it take a look at CanaRx’s licensing status, Betts said.

Schneider found that mail-order pharmacies employed by CanaRx had been improperly dispensing prescription drugs without a license.

CanaRx is an international prescription provider serving residents in the states of Illinois, Wisconsin, Missouri, Kansas, Vermont and Rhode Island, according to the company’s website.

Schneider wrote a letter to CanaRx’s attorney on Aug. 14 that said, “My staff and I agree with you that over the short term, unless the pharmacies CanaRx uses obtain Maine licenses, suspending dispensing in Maine appears to be the only way for the CanaRx program to comply with Maine law. I trust that CanaRx will do so immediately.”

In that letter, Schneider said CanaRx offered to suspend shipments from unlicensed pharmacies into Maine “pending a legislative solution to your problem.” The company stopped providing medications Aug. 15.

“It’s bad news for state employees, but we hope it’s only temporary,” said Turowski of the MSEA. “Hopefully, this will be remedied in the next legislative session.”

Turowski said the decision to suspend medication services will affect between 800 and 900 state employees, who started using the service in May.

State Sen. Troy Jackson, D-Fort Kent, said Sunday night that he plans to try to rectify the situation.

On Aug. 9, Jackson made a legislative request — the first step toward drafting a bill — to make it legal for CanaRx to do business in Maine. The bill will be presented to the Legislature when it convenes in January.

“I’m not a big supporter of Canadian business, but this seemed like a reasonable way for people to get lower-cost prescription drugs,” Jackson said.

Staff Writer Dennis Hoey can be contacted at 791-6365 or at:

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