| Pfizer
cuts supplies to some online Canadian pharmacies for exporting
medications
THERESA AGOVINO, AP Business Writer
Thursday, February 19, 2004
©2004 Associated Press
(02-19) 12:02 PST NEW YORK (AP) --
Pfizer announced Thursday it had cut off several
Canadian internet pharmacies for exporting its drugs, raising
tensions between pharmaceutical firms and U.S. patients seeking
less expensive medicines.
Officials with the world's biggest drug company
would not say Thursday how many companies received a Feb.
12 letter ordering the move, which came after Pfizer issued
a warning to pharmacies last month.
The New York-based Pfizer said the pharmacies
violated business agreements by either selling drugs to individuals
outside Canada or selling to others who would export. The
letter said Pfizer's authorized distributors in Canada were
to cut the companies off immediately.
In a statement, Pfizer said the decision was
designed to protect the safety of patients and the integrity
of the pharmaceutical supply system.
But critics said the move was intended to
influence profits since prescription drugs are up to 50 percent
less expensive in Canada, which has government price controls.
"This is all about Pfizer sales, profits
and the bottom line," said Jeff Uhl, president of Universaldrugstore.com,
which received one of the letters and was cut off.
Last month's warning to pharmacies reminded
them they could not sell drugs outside of Canada and would
need authorization to buy from wholesalers. The letter also
said Pfizer reserved the right to examine drug stores' buying
patterns.
Uhl said he has stockpiles of Pfizer drugs,
including the cholesterol-lowering agent Lipitor, the world's
best-selling drug.
Pfizer and four other drug companies, citing
supply and safety concerns, have limited shipments to Canadian
pharmacies to keep drugs from being sold to Americans seeking
less expensive medicine.
Internet pharmacy executives say it is getting
harder and more expensive to buy drugs from those companies
but vow to continue with their businesses.
It is illegal for Americans to import drugs
from Canada, but regulators have largely turned a blind eye
to individuals who fill their prescriptions over the border.
Two U.S. cities have programs that let workers buy drugs from
Canada, and scores of mayors and governors are considering
following their lead.
Biotechs rally
to battle a legislative disease: Canadian drug imports
Daniel S. Levine
A set of bills before the California Legislature promises
to save consumers and taxpayers millions of dollars by importing
drugs from Canada. But the biotech industry warns the results
will be disastrous.
The legislation will be high on the agenda
March 3 when leaders of the life sciences industry descend
on Sacramento for an annual day of meetings with lawmakers.
The legislation comes as the state faces a
$16 billion shortfall this year and consumers and senior groups
clamor for relief from the soaring costs of prescription drugs.
Prescription drug spending in the United States in 2002 increased
15.3 percent, to a total of $162.4 billion. Consumers' out-of-pocket
spending reached $48.6 billion, a $6.1 billion increase over
the previous year.
"The whole Canadian pharmacy issue is
really about importing Canada's price controls to the U.S
for California. It's just a Trojan horse for price controls,"
said David Gollaher, president and CEO of the California Healthcare
Institute, an advocacy group for the biomedical industry.
"Instead of saying we're going to control prices throughout
the state, we will import somebody else's system of doing
the same thing and that would have a big systemic effect to
the entire pharmaceutical industry."
Chief among the bills concerning the biotech
industry is one from Sen. John Burton, D-San Francisco, that
would require California's Department of General Services
to include Canadian pharmaceutical sources in purchasing to
get the best price. The Department of General Services purchases
drugs for the Department of Corrections and four other state
agencies and spent $171 million on drugs last year. Burton's
office estimates the plan would save $30 million a year.
Though such a plan would run afoul of federal
laws that prohibit the importation of prescription medication
from other countries, Burton's bill and others filed in recent
days are likely to press the national debate on drug importation
and price controls, pitting the pharmaceutical industry against
consumer and senior groups, and the state against the federal
government.
"It's a wonderful way for California
to set a model for the whole United States and for all the
states to get behind and apply some pressure on the federal
government," said Joan Lee, legislative liaison in California
for the senior advocacy group Gray Panthers. "It's a
way for California to not only take control of its own future,
but to say, 'Don't be in the pockets of the lobbyists.' "
The biotechnology industry and its supporters
argue that de facto price controls of imported drugs from
Canada will discourage investment, dampen innovation and cost
California high-value jobs.
"The importance of sustaining innovation
is all too real," said Rep. David Dreier, R-Glendora,
at a California Healthcare Institute news conference. "Real
people, our friends and loved ones, are depending on scientists,
researchers, and, yes, our state's vibrant biomedical industry
to develop new cures. That hope will darken if we adopt short-sighted
policies that penalize the innovators on which we depend."
But advocates of the legislation present the
issue as little more than putting a stop to corporate fat
cats lining their pockets at the expense -- and health --
of citizens.
"No one should have to forgo lifesaving
medical care to increase some CEO's bottom line," said
state Sen. Don Perata, D-Oakland. "If the federal government
chooses not to address this important issue, the state of
California will."
Perata this month introduced legislation that
would permit state-contracted pharmacies to purchase drugs
from Canada for Medi-Cal and the AIDS Drug Assistance Program.
Perata estimates the plan would save $30 million a year.
In addition, five Democratic members of the
California Assembly introduced a package of bills this month
that call on the state to establish a web site that lists
prices for drugs in Canada and provides consumers with reputable
sources from which to purchase them. The package also calls
for a California Drug Purchasing Consortium so the California
Public Employees Retirement System can join with other drug
purchasers to leverage its buying power.
While supporters of the legislation are quick
to a paint picture of pharmaceutical spending on golf clubs,
Hawaiian getaways and other inducements used to lure customers,
the biotech industry says lawmakers don't understand the high
cost of drug development.
"Our elected officials still don't understand
what it takes to put a very good biotech drug together,"
said Sue Markland Day, director of government relations for
BayBio, the Bay Area's biotechnology trade association. "People
don't appreciate the art of making a protein-based drug in
the biotech area."
But others argue that the bulk of spending
on research for new drugs comes from tax payers through federal
grants and that they should be able to enjoy the benefits
of that investment.
"Our tax dollars support two-thirds of
the research and development drug companies do," said
Assemblyman Dario Frommer, D-Glendale, one of the legislators
behind the package of drug bills. Yet, many of us cannot afford
to buy those new drugs when we get sick."
Daniel S. Levine covers biotechnology for
the San Francisco Business Times.
U.S.
May Overwhelm Canadian Pharmacies
By THERESA AGOVINO
AP Business Writer
NEW YORK
As CEO of Canadameds.com, one of the popular new enterprises
selling low-price prescription drugs from Canada to U.S. customers,
Mike Hicks is used to watching business grow fast.
But even
he is unsure how he would respond if the city of Boston, which
this week announced a plan to buy drugs from Canada, asked
his firm to handle prescriptions for a pilot program open
to roughly 7,000 of its current and retired employees.
"It
would be exciting _ and frightening," said Hicks. "That
would be a lot of stress on our operation."
Executives
at Canadian pharmacies that sell drugs to Americans are watching
with a mixture of delight and dread as more and more cities
and states announce they are exploring purchasing drugs north
of the border to save money.
While
they want business to keep increasing, they aren't sure how
to handle a massive influx of new customers _ or even whether
they could. They also don't want to taunt the pharmaceutical
industry, which is already limiting supplies to Canada to
discourage the sales.
This week,
New Hampshire's state government announced plans to purchase
some drugs from Canada. And representatives from a dozen states
met with six Canadian drug companies in Atlanta to discuss
business possibilities. So far, only Springfield, Mass., has
a program that allows its employees to purchase Canadian drugs.
"I
think even if half the people talking about buying from Canada
did it, there would be problems," said Hicks, whose company
is based in Winnipeg, Manitoba.
No one
believes that Canadian Internet pharmacies are a long-term
solution to soaring drug costs and the pressure felt by state
and city budgets. At some point _ and no one knows when _
availability will become an issue: There are only 31 million
people in Canada, and there is no way drug companies will
ship enough medicine there to supply possibly millions of
American state and city workers.
Some officials,
like those in Boston, believe buying Canadian drugs will send
a powerful message to federal regulators, requiring them to
act before supply becomes a problem.
"The
more states and cities that buy Canadian drugs, the more pressure
on the U.S. Food and Drug Administration to address the problem
of the high cost of medication in this country," said
John Auerbach, executive director of the Boston Public Health
Commission.
It is
illegal for anyone but drug manufacturers to bring their products
into the United States, and U.S. regulators have cracked down
on some storefront operations. The FDA also says that the
safety and quality of drugs imported from Canada can't be
assured.
No one
knows how many Americans are buying their drugs in Canada,
where medicines are up to 50 percent cheaper because of government
price controls. The number of pharmacies supplying cost-conscious
Americans is also unclear, but is estimated to be between
80 and 100. Some are very small, so they probably could not
supply a major city or state.
Since
the beginning of the year, five drug companies announced they
were limiting their supply to Canada to stop the drugs from
being shipped back to American consumers. Some Canadian Internet
pharmacies have reported problems getting drugs.
"At
the end of the day, getting supply is getting more difficult
and expensive," said Hicks.
Al Kula,
director of pharmacy services at Toronto-based Meds Via Canada,
said he hasn't had any trouble obtaining drugs to sell his
American clients because the company has a chain of 42 drug
stores besides its Web site. He said the company fills about
3,000 prescriptions a day, and could go up to 10,000 without
too much of a problem.
Yet Kula
says it is difficult to say how many cities or states he could
service. Both Kula and Hicks say their ability to service
new clients depends on how many people would want to buy their
drugs from Canada, and what kind of medicine those people
take.
Hicks
said he would need to know that before making any major commitment
to expanding the business. He and Kula fear that if the Canadian
business grows exponentially, drug companies will take even
more drastic measures to cut supply and they don't want to
put Canadian clients in jeopardy.
"I
don't want to cause a drug shortage," Hicks said.
If the
drug companies did cut off Canada, the government could break
patents and allow generic production, Kula said. But he's
not sure either the companies or Canada wants to get to that
point.
It is
unclear that it will. The states that sent representatives
to the Atlanta meeting haven't committed to buying drugs from
Canada for several reasons. Among them: the federal rules
prohibiting it, and concerns that a reliable supply could
be assured.
"It
is still a cottage industry," said Jill Floode, special
assistant for health policy to Delaware's budget director.
"I think the companies are going to have to decide whether
they want to make it take hold."
Article
Published: Friday, May 30, 2003 - 12:00:00 AM MST
Canada Rx may face state controls
Lower drug prices draw Colo. buyers
By Marsha
Austin, Denver Post Business Writer
Within
the next year, Coloradans could be buying prescription drugs
from a state-approved list of Canadian pharmacies.
A handful of disparate interest groups Thursday urged Colorado
regulators to begin overseeing Canadian pharmacies' sale of
prescription drugs to Colorado residents. The trade is unregulated
by the state because it violates federal law.
Consumer
advocates, Colorado-based pharmacists and Canadian drug importers
want the state to force Canadian pharmacies to abide by the
same quality and safety standards as U.S. mail-order pharmacies
doing business here.
During
the recent legislative session, the Colorado attorney general's
office suggested the state begin licensing Canadian pharmacies,
but some state officials wanted more time to study the issue,
said Rick O'Donnell, executive director of the Colorado Department
of Regulatory Agencies.
O'Donnell's
department is studying potential changes to Colorado law this
summer and will publish its recommendations on the Canadian
pharmaceutical trade in early October, he said.
In the
meantime, websites and storefronts selling Canadian drugs
are proliferating.
Trudy
Pueppke opened a retail store called Rx of Canada in Boulder
this month. She said business has been so good she's expanding
to Denver on Sunday.
Pueppke,
a Boulder resident, turned to Canada to fill her own prescription
for migraine headaches. The discount was so deep - pills that
cost $40 each in the U.S. she bought for less than $7 per
pill in Canada - that Pueppke wanted to help others.
"I'm
looking at grandmoms and granddads on fixed incomes and thinking,
well, what do they do?" Pueppke said.
As more
Coloradans buy from people such as Pueppke, the state's main
concern is patient safety, O'Donnell said.
The Colorado
Pharmacists Society has cautioned consumers against buying
imported drugs because the Food and Drug Administration doesn't
inspect the pharmaceuticals and can't guarantee such drugs
are safe.
To date
there have been no reports of a Colorado resident being harmed
by Canadian drugs, said Matt Mayer, deputy director of the
Colorado Department of Regulatory Agencies.
But state
officials worry that by licensing Canadian pharmacies in Colorado,
the state would be endorsing illegal behavior, Mayer said.
"You're
asking us to put our head in the sand," he said.
The FDA
prohibits businesses from reselling in the U.S. drugs manufactured
here and exported to other countries. The agency also bars
consumers from bringing drugs into the U.S. that are not FDA
approved. The only exception is for those who have a dire
illness that can only be treated by drugs not readily available
in the U.S., said Ron Conley, an attorney for Arnold &
Porter.
Consumers
who buy a 90-day supply of prescription drugs from Canada,
either through a website, a mail-order service or by traveling
north of the border are technically violating federal law,
Conley said.
But the
FDA has not actively enforced such laws.
Canada's
state-sponsored health care system imposes cost-controls on
prescription drugs, and thus pharmacies can offer the drugs
to consumers at anywhere from 20 percent to sometimes more
than 50 percent less than U.S. pharmacies.
Consumer
watchdogs favor licensing Canadian pharmacies to ensure patients
who purchase drugs online or through the mail get quality
medications and continued access to affordable prescriptions.
If the
state cracks down on the purchase of Canadian drugs, low-income
seniors in particular could turn to less reliable sources
for affordable medications, said Laurie Kiusalaas, a spokeswoman
for AARP Colorado.
"Seniors
will go somewhere else if Canada dries up - like Mexico,"
Kiusalaas said.
Canadian
drug importers are eager to gain legitimacy in Colorado and
boost their business here. Representatives of several online
pharmacies doing business in Colorado said Canada's pharmacy
regulations are just as vigorous as the FDA's.
"There
is no difference," said Lewis Jorgenson, president of
sales and marketing for Calgary, Alberta-based CrossBorderPharmacy.com
CrossBorderPharmacy
and other online drug importation services that buy drugs
from licensed Canadian pharmacies say they would easily qualify
for licensure in Colorado.
Colorado
pharmacies that compete with Canada for business want to limit
the amount of competition from north of the border.
Independent
pharmacists from Colorado say they support state regulation
of Canadian competitors because they fear for patients' safety
under the current unregulated system.
Only one
other other state, Arkansas, has stepped forward to officially
regulate the cross-border sale of prescription drugs. But
Colorado may do so if it's in consumers' best interest, O'Donnell
said.
"If
that's the case, we'll take an advocacy role," he said.
Arkansas
recently passed a law requiring Canadian pharmacists to have
a formal relationship with a state-based pharmacy to sell
drugs, Mayer said.
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