FDA threatens stores that sell Canadian drugs
to U.S. residents
USA TODAY
April 09, 2003 08:57 AM ET
By Julie Appleby
New drugstores popping up in neighborhoods around the country don't stock drugs or shampoo or
anything else. But they offer something many Americans consider more valuable: a portal to
Canada's cheaper prescription drugs.
Instead of merchandise, the stores contain a few fax machines, phones and computers. Dozens
have opened in the past six months, catering to customers eager to buy lower-cost prescription
drugs from pharmacies outside the United States, but unable or unwilling to use their own
computers to order through the Internet.
The storefronts can be just down the street from U.S. pharmacies, but their prices are miles
apart. Anti-cholesterol drug Lipitor costs about $268 for 90 pills in the USA. From a Canadian
pharmacy, 90 pills cost about $169.
But the stores' very popularity is stoking a controversy that pits senior citizens who need
lower-cost medications against federal and state regulators trying to slow an increasing tide of
foreign prescriptions, which they say endangers public health.
"To some extent, we're caught in the middle of a problem that is not our responsibility, which
is drug prices. Our responsibility is safety," says William Hubbard, associate commissioner of
policy and planning for the Food and Drug Administration (FDA), which last month issued its first
warning letter to a storefront pharmacy, saying its practice violates federal law.
With no certainty that Congress will add a prescription drug benefit to Medicare, the debate is
not likely to end soon.
Many U.S. residents say they struggle to afford prescription medications, turning in recent
years to buying from pharmacies in Canada and Mexico.
About 1 million U.S. residents buy drugs each year from Canada, according to estimates from
Canadian pharmacies. That represents about $1 billion in sales, a small slice of total U.S. drug
sales, which topped $192 billion in 2002.
A nurse, who says she sees many patients suffer because they can't afford their prescriptions,
manages the Panama City American Drug Club. "Now I can provide customers with an opportunity to
get medication that's been prescribed to them at a 30% to 80% savings," says Dawn Aycock, whose
store opened in Panama City, Fla., last week. "My conscience says we're not doing anything
illegal."
The FDA steps in
But the FDA sees it differently, writing in a recent legal opinion that those who "aid" U.S.
residents in purchasing drugs from other countries are violating federal law.
Critics of the FDA say the agency's move against storefronts is being pushed by the
pharmaceutical industry, which fears that cross-border sales could eventually cut into profits.
The sales also highlight how much more U.S. residents pay for drugs, potentially fueling calls for
price controls in the USA similar to those in Canada and much of the rest of the world.
But supporters say the FDA has legitimate concerns about whether the drugs pouring into the USA
from all over the world are safe. Some may be counterfeit or from countries with regulatory
standards that fall short of U.S. or Canadian rules. And they say the sheer volume of packages at
some international mail facilities threatens to overwhelm inspectors, whose main focus since Sept.
11 has been to watch for terrorist shipments.
"They allege these are Canadian versions of drugs approved in the United States, but we don't
know what they are because there is no regulatory oversight of these drugs," Hubbard says.
Storefront owners scoff at the FDA's concerns about safety, saying the drugs come from licensed
Canadian pharmacies. Many will provide the name and license number of the pharmacy, although a few
refuse to disclose their affiliation.
Most are owned by entrepreneurs who see a business opportunity: a commission for every
prescription filled. A few charge customers an annual membership fee. Owners say they are
performing a public service in a country where prescription drug costs are the highest in the
world.
"We believe we're morally and ethically right," says Carl Moore, whose Rx Depot stores are the
first to be challenged by the FDA on allegations that they violate federal law. He is not swayed
by the warning letter he received from the FDA last month or an injunction filed by the Oklahoma
state Board of Pharmacy. He's opened four more stores since then.
"We're going to fight like a wild animal," Moore says.
Anne Hinson, who last week took her 81-year-old mother-in-law, Gladys, to the opening of the
storefront in Panama City, agrees that there needs to be more oversight, mainly to ensure that
pharmacies the storefronts deal with in Canada are licensed and in good standing. But, she says,
the FDA should not stop people from buying lower-cost drugs from other countries.
"Yes, it is against the law, but the FDA has chosen to turn its head," she says. "They need to
keep turning their head until we get prices that these older people can afford."
Hinson has already helped her mother purchase prescription medication from Canada, buying heart
pills at half the usual cost.
"My mother had flat refused to buy the heart medicine (at U.S. prices) because it costs more
than she gets in a month," says Hinson, who has also found savings by using the discount cards
offered by some drug manufacturers.
Patients not FDA's targets
The FDA says it will not go after customers of the storefronts, just as it has not generally
prosecuted those who use the Internet or travel across borders to purchase prescription drugs for
their own use.
"There's a distinction between what the patient is doing and what storefront operators are
doing," Hubbard says. "The storefronts are luring people, facilitating the purchase of unapproved
drugs, which is clearly a violation of our (Food, Drug & Cosmetic) act. And it poses a safety
concern."
But whether the FDA can stop the practice remains uncertain.
Preventing U.S. residents from buying cheaper products from other countries may prove
difficult, short of seizing all packages containing prescription drugs at the border. The FDA last
year sought approval to turn back shipments of prescription drugs without the time-consuming need
to notify recipients, but that recommendation has not been approved by the Department of Health
and Human Services.
Politically, the Bush administration and its regulatory agencies are in a tough spot. The
pharmaceutical industry — a powerful lobby — wants regulators to halt the cross-border
sales. But senior citizens — also key because they vote — don't want the sales
stopped. They say they need access to lower-cost drugs in the absence of a prescription benefit in
Medicare.
Drugmakers are in a public relations bind. Efforts to cut off the supply of drugs from Canada have
met with resistance. Consumer groups have already organized boycotts of GlaxoSmithKline over that
company's move to stop shipping its drugs to Canadian wholesalers who sell to U.S.
customers.
Legally, the FDA's arguments against storefront businesses are untested, although the agency has
had success in prosecuting Internet drug sales, especially in cases where customers are sold
products without valid prescriptions.
Storefront owners are expected to fight the FDA by saying they are not violating the law because
they do not dispense drugs but merely assist customers with paperwork.
"Thousands of people order medication on the Internet already," Moore says. "The only
difference with us is that we assist people. People are able to do this at home on computer, and
it doesn't seem to be an issue, but if someone needs help, it's an issue."
Lawyers familiar with food and drug law say the FDA could seek an injunction against the
stores, seize any products they may have or try to file criminal charges.
"The FDA is not completely out of bounds on this, but I don't think it will be the easiest case
to make, either," says Jim Czaban, an attorney who specializes in food and drug issues for the
firm Heller Ehrman in Washington, D.C. The FDA will have to show that the storefronts are "in
effect, misbranding drugs" by helping customers bring in medications approved only for sale in
Canada, he says.
Years of looking the other way
The FDA action comes after years when the agency mostly looked the other way as U.S. residents
brought prescription drugs home from Canada or Mexico.
The agency said it is a misinterpretation of the law to assume that importing small amounts of
prescription drugs for personal use is legal. The policy of allowing small amounts for personal
consumption was aimed at allowing seriously ill patients to seek drugs not available in the
USA.
But as U.S. spending on prescriptions has risen dramatically in recent years, the practice of
importing small amounts of prescriptions has grown well beyond what was originally intended.
Hubbard at the FDA says that stopping cross-border pharmaceutical sales would probably require
legislation allowing the FDA to simply send back shipments without the time-consuming need to
notify addressees. Such legislation is unlikely at a time when Congress is hearing from residents
angry over high drug prices.
"Lawmakers are trying to be responsive to citizens complaining about high prices," Hubbard
says. "At what point does the risk outweigh the benefit? All we're saying is the FDA doesn't have
the means to assure the safety (of drugs brought in from) other countries."
© Copyright 2003 USA TODAY, a division of Gannett Co. Inc.
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