WASHINGTON — Importing cheaper prescription drugs from Canada could be done safely in a large, highly regulated commercial enterprise, said U.S. Surgeon General Richard Carmona.

But it would cost hundreds of millions of dollars to police, savings for Americans wouldn't be that high and Canadian officials are worried about supply, he said. Carmona's long-awaited task force report on the issue released Tuesday said it would be "extraordinarily difficult and costly" to ensure the safety of personal, individual shipments.

A senior administration official estimated it would have cost $3 billion US to monitor some five million packages that arrived from Canada in 2003.

The task force stopped short of making a recommendation on imports one way or the other.

"Our goal was to provide the policy makers with the science to make a decision," said Carmona.

But the report said imports from Canada and other countries pose "significant risks" and aren't always cheaper than U.S. medicines as many Americans believe.

Competition in the U.S. market has lowered the price of generic drugs, which can cost about 50 per cent less than either brand-name or generic drugs in Canada, said Carmona.

Americans who are unaware of that could save a lot of money simply by asking for generic alternatives if they're available, said the report.

Legalizing widespread imports from other countries would further cut the profits of big drug companies and reduce their ability to research and develop new medicines, the report said, and intermediaries would eat up at least one-half of any savings for consumers.

But Canada has a drug regulatory system similar to that of the U.S. Food and Drug Administration and Carmona acknowledged a closed distribution network involving a few high-cost drugs that are widely used by Americans could work.

"If Congress is willing to consider importing from Canada, then it must be specifically regulated much like the FDA manages pharmaceuticals."

Some "rogue" Internet pharmacies claim to be selling drugs from Canada that are the same as approved U.S. medicines but aren't, he said.

"Often the good name of Canada is being misused."

Said the report: "Practical experience and evidence shows that Americans are not always getting the same drugs as Canadian citizens when purchasing drugs from Canadian Internet sites or sites purporting to be Canadian."

Carmona noted Canadian officials have raised alarms about potential supply problems and there would have to be discussions about that if Congress goes ahead.

Canada's Health Minister Ujjal Dosanjh warned last week legalizing imports could result in shortages and higher prices for Canadians.

But many Internet pharmacists in Canada disagree, saying their system is designed to serve Canadians first and price increases would still be kept to inflation levels by a national review board.

"Any action the U.S. government takes as a result of the report is obviously an internal U.S. matter," a spokesman for Dosanjh said Tuesday.

"(The report) clearly echoes issues that the minister has been talking about for some time, including ethics, safety and the unlikely reality that Canada could be the drug store for 280 million Americans without risking domestic shortages.

"Independent of the report, the minister has been reviewing and will continue to review his options. Come what may, the government will do what is necessary to protect Canadians' access to an adequate supply of safe and affordable medicines."

The 13-member task force was charged nearly a year ago with determining whether imports from Europe and Canada could be done safely amid political pressure to provide relief for Americans paying some of the highest drug prices in the world.

But increasing numbers of Americans and individual states are flouting the laws and U.S. legislators are pushing the issue, creating a sense of inevitability among some that limited imports might be allowed if contaminated or counterfeit drugs could be curtailed.

U.S. senators wanted to reintroduce legislation early next year to allow the practice and place a surcharge on the drugs to pay for safety monitoring.

In the wake of the report, U.S. Health Secretary Tommy Thompson sent a letter to Congress outlining his concerns about imports.

Any legislation must include a major safety component and not seek to stifle competition, said a senior official.

If those conditions aren't met, senior advisers to President George W. Bush will recommend he veto the bill, the official said.

Large pharmaceutical companies that stand to lose big profits have lobbied hard against imports of drugs from Canada, where they can be up to 80 per cent cheaper because of federal price controls.

Several manufacturers have limited supplies to Canadian firms that do business in the U.S., leaving them to fill the gap with pills from other countries.

Many operate out of Manitoba. Premier Gary Doer, who said the Internet industry employs some 2,500 in his province, has asked Prime Minister Paul Martin to avoid putting restrictions on the lucrative trade.

Americans have been crossing the border for a decade to buy cheaper drugs without a glance from the FDA. But officials became alarmed with the rise of Internet pharmacies and interest from local U.S. governments.