PORTLAND — A trade group that represents some of the nation’s largest pharmacy chains complained to Maine regulators about a Canadian mail-order prescription business three weeks before the state informed the business that it was violating state law.

In a letter to the state Board of Pharmacy, the Maine Merchants Association, whose members include Rite Aid, Walgreens, CVS and a much smaller, Maine-based chain, Community Pharmacies, focused on safety concerns related to a lack of licensing and unfair competition.

CanaRx came to the attention of the trade association when the association learned about MaineMeds, a program for state employees that began earlier this year.

CanaRx delivers brand-name prescriptions by mail. It offers reduced prices to health plan providers and does not charge co-payments to participants, providing significant savings.

The privately held Canadian company suspended its operations in Maine on Aug. 17. Employees of the city of Portland and Guilford-based Hardwood Products Co. had used CanaRx services for eight years. The Maine State Employees Association, a union representing state workers, joined the program this year.

In the letter to the Board of Pharmacy dated May 30, Curtis Picard, the merchants association’s executive director, wrote: “The state licenses drug outlets and pharmacies to ensure medications not only come from legitimate sources, but also can provide a chain of command in the event there are any problems or issues with a particular medication. It is inherently unfair to require Maine-based businesses to follow one set of rules and regulations and essentially ignore those same rules for entities that are out of the country and not licensed.”

Picard said Monday that medications would come not only from Canada, but also from the United Kingdom, Australia and New Zealand. The merchants association was concerned about what other countries might become suppliers, whether the same chain-of-command oversight would exist, and the lack of face-to-face counseling, he said.

The association represents more than 400 retailers, including large chain pharmacies and independent operations like Community Pharmacies. The CEO and president of Community Pharmacies is Joe Bruno, who also is president of the state Board of Pharmacy.

In a letter dated June 11, the board asked the state Attorney General’s Office to look into the matter. The board had found that CanaRx serves as a broker among drug manufacturers, doctors and pharmacies, and that none of the foreign pharmacies held a state license. The board found that it isn’t authorized to license mail-order pharmacies that are outside the United States, Bruno wrote in the letter.

Attorney General William Schneider agreed with the board’s assessment. In a letter dated June 21, he notified CanaRx that it was operating in violation of state law.

At least one state lawmaker, state Sen. Troy Jackson, D-Allagash, plans to propose legislation to make it legal for CanaRx to do business in Maine.

CanaRx will resume operating in Maine if the law is changed to allow it, said Chris Collins, senior program director with the company.

Collins said the company has not encountered such an issue in other states. The company says it supplies more than 300 local and state government programs. The first program was in Springfield, Mass. Collins said he developed it when he worked for the city as its insurance program director.

CanaRx supplied more than 1,200 households in Maine. The program for the Maine State Employees Association would have saved the union’s health plan $3.6 million, Collins said.

The countries that manufacture the medications used by CanaRx are in the federal “Tier One” category, Collins said, meaning their medication licensing regulations are equivalent to those of the Food and Drug Administration, and the rules for physicians, pharmacists and pharmacies are at least as strong.

Collins said CanaRx supplies only the most expensive brand-name medications, not generic medications or brand names that are close to generics in price.

“Of all the business a pharmacy does, it’s probably less than 1 percent of their business,” he said.

With the program, Portland employees would have saved $200,000 and the city would have saved an additional $200,000 this year, said Nicole Clegg, a city spokeswoman.

The city has saved $3.2 million since its program began in 2004. Clegg said more than 17,000 prescriptions have been filled in that time without any problems.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at: [email protected]

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