[Ip-health] Theresa Agovino: US may overwhelm Canadian Pharmacies

[Joy Spencer]

US may overwhelm Canadian pharmacies
By THERESA AGOVINO, AP Business Writer
Friday, December 12

<snip>
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.
<snip>

http://story.news.yahoo.com/news?tmpl=3Dstory&u=3D/ap/20031213/ap_on_bi_ge/=
canadian_drugs_7


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 =97 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 =97 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 =97 and no one knows when =97 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 (news - web sites) to address
the problem of the high cost of medication in this country," said John
Auerbach, executive director of the Boston Public (news - Y! TV) 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."
--
Joy Spencer

Consumer Project on Technology
1.202.387.8030 (p)
1.202.234.5176 (f)
joy.spencer@cptech.org