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Drug Industry Tries To Kill Cheap Medicine From Canada

by Mark Bourrie

Prescription Drug Political Stalemate
(IPS) OTTAWA -- The huge U.S. pharmaceutical industry is trying to crush Canadian-based Internet companies that sell drugs at relatively low prices to U.S. customers, Canadian pharmacists say.

The Canadian-based pharmacies have won the support of the powerful senior citizens' lobby in the U.S., known as AARP, formerly the American Association of Retired Persons. Its members constitute the biggest voting block in the U.S. and are major contributors to both of the main political parties.

The business is huge and growing fast. U.S. government figures show about 1 million U.S. customers, 90 percent of them senior citizens, bought some $600 million worth of drugs through Canadian online or mail-order pharmacies last year. The Internet pharmacies filled 2 million prescriptions.

The year before, Canadian Internet pharmacies filled $300 million worth of prescriptions. The year before that, they didn't exist.

Most Internet pharmacies are based in Manitoba.

Because of the low U.S.-Canadian dollar exchange rate, Canadian government drug price regulation and generic alternatives, Canadian-based Internet pharmacies are able to offer prescription medication for less than it costs in U.S. drug stores.

Canadian Internet pharmacies are also fighting a battle to survive in their home country. The Manitoba Pharmacists Association, which regulates all pharmacists in the province, and the Manitoba International Pharmacists Association are locked in a battle over regulation of Internet pharmacies.

Colin MacArthur, lawyer for Manitoba's Internet pharmacists, says a mediated settlement between the two groups broke down in July when the members of the province's pharmacists association refused to ratify it.

"Seniors groups in the United States have very effectively and very loudly made known to the politicians in the United States that they feel that continued access to Canadian prescription pharmaceuticals is critical," he said. "My clients have no desire to negotiate themselves out of business."

GlaxoSmithKline, which supplied $60 million worth of those prescription drugs to Internet pharmacies, has stopped shipping its drugs to Canadian pharmacists that have web sites and to warehouses that supply them. The Canadian International Pharmacy Association and the Manitoba International Pharmacists Association filed a complaint about Glaxo's move with the Canadian Competition Bureau and is threatening to sue Glaxo.

Glaxo said drugs should be prescribed and monitored by a physician based on face-to-face visits to ensure the medication is needed and is used properly. The company claims it cannot be sure the drugs are being properly stored or shipped. "We're doing this out of concern for patients' safety," Glaxo spokeswoman Patty Seif said of the cut-off.

MacArthur says his association has threatened legal action against Glaxo but, so far, is relying on its application to the Competition Bureau.

The Canadian International Pharmacy Association disputes Glaxo's assertion that U.S. customers face potential hazards by buying from Canadian pharmacies.

"Our members across Canada are all licensed pharmacists that adhere to all of the appropriate standards imposed by their respective regulators," said Andy Troszok, the association's vice president for standards.

Twenty-one members of Congress wrote to Glaxo's Chief Executive Officer Jean-Pierre Garnier, urging him to reconsider the decision, warning it would "severely hurt" many senior citizens and even cause some to die prematurely because they can't afford medications.

Boycotts of Glaxo products have been organized by senior citizens' groups in several states and by the largest U.S. AIDS organization, the AIDS Healthcare Foundation. The AIDS group calls Glaxo's decision "unconscionable, greedy and heartless" because it could deny life-saving AIDS medications to low-income people.

According to documents leaked to the New York Times this spring, the U.S. drug lobby group PhRMA has budgeted an extra $450,000 to attack the legitimacy of the online drug industry, which is centered in Manitoba.

The association wants the Canadian government to drop its caps on drug prices that keep drug costs here lower than those in the U.S.

"We believe price controls are bad for patients because it takes away innovation," said Mark Grayson, PhRMA's senior director of public affairs. "The Canadian system couldn't exist without the United States and we're trying to ensure that there is some burden-sharing with the Canadian consumer to enjoy the fruits of the medicines they are using."

In their Feb. 4 letter to Glaxo, 21 members of Congress -- including Rep. Pete Stark of California, the leading Democrat on the House Ways and Means subcommittee overseeing health care issues -- urged Glaxo to reconsider its decision.

"America's seniors are already struggling to afford the costs of the life-saving drugs their physicians prescribe them," the letter reads. "Some are forced to choose between food, heat and medicine. Others are forced to ignore their physicians advice and simply not take the medication at all."

AARP, while not directly criticizing Glaxo, said the dispute illustrates the need for more affordable prescription drugs as well as congressional action.

"What this is really showing us is the extreme hardship of people on this side of the border to afford the medications they need," said Steve Hahn, an AARP spokesman. "And it speaks volumes of the need for the Medicare prescription drug benefit."

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Albion Monitor July 24, 2003 (

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