Canadian online pharmacies face U.S. ban

The U.S. Food and Drug Administration is cracking down on Canadian online pharmacies selling cheap prescription drugs to Americans.

Joe Castaldo 0

(Roland Magunia/Newscom)

For more than a decade, the U.S. government has reluctantly tolerated Canadian online pharmacies selling cheap prescription drugs to Americans. Now the U.S. Food and Drug Administration is cracking down on what is believed to be the country’s largest player: Winnipeg-based Canada Drugs.

The FDA recently sent a warning letter to Canada Drugs requesting it stop marketing “unapproved and misbranded” medication, notably Viagra, through 3,700 websites it controls. Typically, online pharmacies source products from licensed suppliers in Canada, the U.K. or even Turkey. While the drugs may be identical to those in the U.S., they are considered unapproved by the FDA because the suppliers are not subject to its oversight.

Online pharmacies have always operated in a grey area. It is illegal for Americans to purchase foreign drugs online, but the government will not prosecute people buying drugs with a prescription that they would have trouble affording at home. About one million Americans take advantage of Canada’s lower drug costs every year. Still, the pharmaceutical industry detests the practice, and lobbies against any attempt to legalize it. Meanwhile, industry organizations such as the Canadian International Pharmacy Association (CIPA) certify and verify the safety of online operations, and push for legitimacy.

The FDA appears to be taking a hard line with Canada Drugs, and made a request to the company’s domain registrar to shut down its websites. Canada Drugs moved its sites elsewhere. The FDA made an identical request to the new registrar, but the sites are still up. (Canada Drugs did not respond to interview requests.) The FDA has also been investigating its role in distributing fake cancer drugs in the U.S. A Wall Street Journal investigation earlier this year linked companies controlled by Canada Drugs through its wholesale division to a shipment of a fake cancer drug, though the FDA hasn’t reached a conclusion. The wholesale and consumer divisions are separate, and the FDA’s warning letter targets the consumer side, an area previously left alone.

What happens next is unclear. Roger Bate, an economist with the American Enterprise Institute who researches the industry, doubts the FDA is trying shut down Canada Drugs’ consumer business. “If they massively enforce action against Canada Drugs, then they’ve got to do the same against all the other good, credentialed sites,” he says. Bate published a study this year that found products ordered from certified sites (including Canada Drugs, a CIPA member) are identical to those purchased in the U.S. He argues the FDA and pharmaceutical industry are doing Americans a disservice by failing to distinguish the certified sites from the thousands of rogue online operations that sell fake or counterfeit drugs. “They intentionally lump everything together because they don’t want people buying from Canadian pharmacies,” he says. The FDA’s intent with Canada Drugs could be to restrict sales of erectile dysfunction drugs, appeasing the pharmaceutical lobby angry about lost sales of popular products, without targeting the sale of heart medication and similar life-saving drugs so as not to punish low-income Americans. But Viagra is likely a big money-maker for online pharmacies, too, and to stop marketing to Americans could hurt profits.

Tim Smith, CIPA’s general manager, is nevertheless optimistic about the industry’s prospects. “We see ourselves as part of the solution in the United States,” he says. The FDA’s next steps may challenge that view.

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