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Date Posted: 23:52:41 10/17/03 Fri
Author: Dalziel
Subject: Net pharmacies pose dilemma for U.S.
In reply to: Jill 's message, "Canada: Change in law prescribed for online pharmacies" on 06:20:52 10/05/03 Sun

'Net pharmacies pose dilemma for U.S.

Canadian Press

Thursday, October 16, 2003

The Canadian prescription for brisk drug sales: sell to grateful Americans now paying much higher prices.

Some pharmacists, especially in Manitoba, are making more money than they ever dreamed possible.

But critics of the $650-million US pill trade said it could cause major headaches for Canadian consumers.

Some analysts on both sides of the border warn about drug shortages, less attention from pharmacists, higher prices and pharmaceutical firms that leave Canada and take their jobs and research with them.

Supporters, thrilled by the new jobs and the big profits, say they've seen no evidence of those doomsday predictions. But they're watching, all the same.

Scott Ransome, executor director of the Manitoba Pharmacists Association, said the province's 62 international stores, employing some 3,000 people, have created a badly needed boom.

"If information on drug shortages is available, I haven't seen it. We don't see any evidence to suggest those ramifications will become a reality.

"At this point, we're observing and we'll see what happens next."

Four major drug companies, alarmed at the spread of the illegal cross-border sales and their impact on routinely huge profits, have reduced supplies to Internet businesses and regular pharmacies that sell to Americans.

"Where we get unusual orders for product, like ordering 300 per cent more than they did at the same time last year, we're not filling it," said Sheila Frame, vice-president of public affairs for the Canadian division of AstraZeneca.

"We're not cutting people off. We're trying to make sure Canadians have access to the product, which is our mandate."

Safety is often the primary reason given by health officials and companies for discouraging the drug trade but U.S. legislators who support it said those concerns have been overstated.

The White House, swayed by the powerful pharmaceutical lobby and its political donations, is staunchly opposed to the cross-border trade.

But President George W. Bush may have no choice but to reconsider before the 2004 election if he can't find a way to lower costs, especially for seniors on fixed incomes, with a new medicare drug bill.

Unlike Canada, the United States has no price controls on medications. Americans pay the highest prices in the industrialized world, up to 80 per cent more than Canadians, and it's bound to become a big election issue if it goes unaddressed.

Legislation under consideration by the U.S. Senate would legalize the trade and make it illegal for drug companies to cut off supplies to Canada.

Jacques Lefebvre, spokesman for Canada's Research-Based Pharmaceutical Companies, said the firms simply don't have the capacity to meet the needs of a U.S. market of 300 million people.

"The industry is structured to respond first and foremost to the needs of Canadian patients."

For now, though, Canadian Internet shops have found a couple ways around the big drug companies.

They've created underground networks, buying from stores that only serve Canadians, then selling the products to Americans.

And a research paper from Prudential Equity Group in New York City said some Canadian companies are increasingly obtaining their supplies from countries like Bulgaria -- which has recently increased exports to Canada by 300 per cent -- Singapore, Argentina, South Africa, Pakistan and others.

Transhipping these products through Canada to the U.S. "could, ironically, lead to more genuine safety concerns as the sources and quality of those products is more suspect," the Prudential paper said.

Jeff Poston of the Canadian Pharmacists Association, sees safety problems at home, including a shortage of professionals in regular stores, since those who supply Americans can pay much higher wages.

One pharmacy recently closed in a small town north of Winnipeg. While there is no proven link with the cross-border trade, Poston said it can only exacerbate the existing problem of attracting professionals to rural areas.

Hospitals are offering bonuses to keep staff, said Poston, and there's anger in some quarters about subsidizing pharmacists as they obtain their educations and then losing the expertise to U.S. customers.

Another potential pitfall is higher prices in Canada, said Poston, noting two major pharmaceutical firms raised the cost of some drugs by four per cent in the last couple of weeks.

"Manufacturers are putting increasing pressure on Canadian officials to drop price controls. One day, they might not bother to release drugs in Canada."

Frame, at AstraZeneca, said that's a definite risk to the industry, which employs 23,000 people and provides more than twice that in spinoff jobs.

"My concern, as a Canadian, is that when you start to see diversion of product, then Canada becomes less attractive for research and development investment."

Frame also contends Ottawa could do more to clamp down on funnelling drugs from around the world to the U.S., a responsibility that falls to Health Canada.

But Canadian government officials generally view the cross-border trade as a U.S. problem with a flawed social policy that allows so many to go without drug coverage.

Some Americans pay reasonable rates for drugs, though.

A USA Today study of the Department of Veterans Affairs health system showed it provided most popular drugs at lower prices than those available from Canada.

But people who pay for prescription drugs themselves typically pay top retail prices.

The impact on seniors -- and local governments struggling with huge costs for health coverage -- has led to a rebellion.

Some 10 million Americans now buy their drugs in Canada, either by crossing the border or ordering on the Internet.

In July, the city of Springfield, Mass., became the first to offer a voluntary program for employees and retirees, saving an estimated $9 million a year by buying cheaper prescription drugs from Canada.

Illinois is conducting a study of potential savings and several other states have expressed interest.

The U.S. Food and Drug Administration has been warning jurisdictions. It has threatened legal action against CanaRx, a Canadian exporter based in Windsor, Ont.

And the U.S. Justice Department filed suit last month against RxDepot, a U.S. company involved in exporting Canadian drugs.

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  • Eli Lilly fights drug sales from Canada -- Don, 22:32:59 10/20/03 Mon
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