Canadian Pharmacies Eye Lawsuit

From The Star-Ledger Friday, August 08, 2003

BY ED SILVERMAN Star-Ledger Staff

A trade group for Canadian pharmacies may file an anti-competitive lawsuit against drug makers that are restricting supplies of their medicines to Canada.

The threat comes after Pfizer this week told nearly 50 pharmacies purchases must be made directly from the company and not from wholesalers. Shipments will be cut off to pharmacies that sell to U.S. customers, according to pharmacists and wholesalers who saw the letter. From our Advertisers

Similar steps were taken earlier this year by Wyeth, GlaxoSmithkline and AstraZeneca. The companies were responding to the growing number of Americans who buy discounted medicines in Canada or from Internet sites. Drugs cost less in Canada due to government controls.

A decision on filing a lawsuit hasn't been made, according to an official with the Canadian International Pharmacy Association. He said the group is concerned drug makers are undertaking an industrywide campaign that is unfair and designed to hurt their businesses.

"We're looking at a lawsuit," said Andy Troszok, who runs Total Care Pharmacy in Calgary and is an official with CIPA, which represents 35 Internet and retail pharmacies in Canada. "We want to know if there's any direct evidence that this is an organized effort."

A spokesman for RXnD, the pharmaceutical industry's trade association in Canada, said the organization opposes Internet sales of prescription drugs, because the system does not offer safeguards to patients. The group also has voiced its concerns to Canadian authorities.

"But we have to very careful, as in industry, in taking a position that would effect the commercial interests of others," said Jacques Lefebvre, the spokesman. "The actions taken by individual companies are individual positions. It's not an industry position."

The cross-border fight is erupting now that Congress is debating a pending bill that would allow U.S. consumers and pharmacies to re- import drugs from Canada and other countries at prices below what they cost in the United States.

In the absence of a Medicare prescription-drug benefit, which Congress also is weighing, many seniors are traveling to Canada or ordering from Internet sites that offer lower-cost drugs from Canada.

The pharmaceutical industry is resisting the trend because much of its profits come from the United States, which, unlike Canada and many other countries, does not regulate prices. Drug makers say needed research would be diminished without sufficient profits.

The drug companies also have joined the Food and Drug Administration in arguing that the safety of medicines can't be guaranteed. The agency cautions that some Internet sites claiming to be located in Canada sell drugs that have expired or originated elsewhere.

Restricting supplies is likely to anger seniors, who lack insurance coverage for increasingly expensive medicines. Last year, prices of the 50 most-prescribed drugs to seniors rose more than three times the inflation rate, according to Families USA, an advocacy group.

"Further restrictions will simply invite the next step from Congress," said John Rother, policy director at AARP, the seniors group that supports reimportation. "And that would be to limit or prohibit that kind of activity, which discriminates against those pharmacies."

Ed Silverman can be reached at esilverman@starledger.com or (973) 392-1542.

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