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They come across the border in busloads, or make clandestine treks as individuals, to sample our quality drugs. Many desperate souls buy from our e-commerce sites, with Canada Post acting as an efficient drug mule. No, they're not hippies trying to cash in on Canada's lax marijuana laws. They're American seniors, trying to prolong their lives. Thanks to government price controls, bulk purchases and our weaker dollar, brand-name prescription drugs such as Lipitor, a cholesterol reducer, and antidepressant Paxil typically cost half as much in Canada as in the States. In July, passage in the US House of Representatives of a controversial bill that would legalize the import of drugs from 25 countries, including Canada, put those drug-seeking little old ladies and men--and their Canadian suppliers--at the centre of a cross-border dustup.
As it stands, importing any drug into the US is technically illegal. But the trade is growing nevertheless, in part because US authorities tolerate it. An internal US Food and Drug Administration memo from last year suggests the agency won't go after individuals who import maintenance medications for personal use--it's more concerned about storefronts that import mass quantities. The House bill could give the trade a further push, even though it likely won't get through the Senate or the White House as is. But even if imports are eventually allowed only from Canada, as some observers predict, US consumers could save US$38 billion a year. That could put a big dent in drugmaker profits, giving them a major headache.
Drugmakers are fighting back by trying to curb exports from Canadian online pharmacies. In recent letters to nearly 50 of those pharmacies, Pfizer, the world's largest drug manufacturer, alerted them that they would have to buy direct from the manufacturer--no more quantity discount wholesale buys. UK-based drug multinational GlaxoSmithKline PLC went at it another way, announcing last January that it would stop supplying drugs to online pharmacies and wholesalers that had export sales.
But eliminating the online trade will take a lot more work than that. A survey done in June by PharmacyChecker.com, an online pharmacy evaluator based in White Plains, NY, found that while Glaxo's policy resulted in an average price increase of 22% at online pharmacies, it didn't affect all sites equally. The price of allergy drug Flonase, for example, increased 40% at one site, but just 6% at others--and remained well below US prices in all cases.
There are as many as 150 online pharmacies in Canada, and their numbers are increasing. Tod Cooperman, president of PharmacyChecker.com, believes more Web sites will hide their licence information and pharmacy affiliations to get around supply restrictions, or simply become more innovative. Take Windsor, Ont.-based CanaRx Services Inc. It acts as a Web middleman between US consumers and various Canadian pharmacies. Neither Pfizer's nor Glaxo's decisions to restrict supply have hurt CanaRx's business yet, says president G. Anthony Howard. "I feel very good about what we're doing," he says.
The Canadian Pharmacists Association (CPhA) doesn't. It supports the idea of using the Internet for patient care, but not for exporting drugs. CPhA spokesperson Janet Cooper says the popularity of online pharmacies could force manufacturers to delay new product introductions and cut R&D spending in Canada, or lead to drug shortages (Health Canada hasn't reported any yet), or exacerbate an existing shortage of retail pharmacists. (Online sites offer better pay.)
But what to do about those problems is hardly clear. Online exports from Canada aren't going to stop. Even if they did, driving a billion- dollar industry underground would only force American seniors to deal with less savory characters in other countries. In the long run, either drugmakers have to convince consumers to shop at home, or the US government has to somehow bring drug prices in line with those in other countries. Hordes of US seniors have already made clear what they want.
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