Republican Gov. Jim Douglas and state Attorney General William Sorrell made the announcement Tuesday in response to a letter of denial they received from the Food and Drug Administration that said there was no mechanism to ensure the safety of imported drugs.
"The claims on which they've based this denial are, in our view, unsubstantiated, and we have no choice but to pursue any and all legal remedies available," Douglas said.
Vermont's proposal would have initially allowed the state to import Canadian drugs for current and retired state employees and their dependents, with a goal of expanding the plan to cover other Vermonters, spokesman Jason Gibbs said.
He said the pilot program was projected to save the state about 5 percent of the $18 million it spends on prescriptions for state employees and retirees.
So far, 24 state legislatures have passed, or are considering bills to allow such import programs, said Richard Cauchi, a health program director with the National Conference of State Legislatures.