Canada Tackled on Internet Drugs Sales to US

US regulators of medicine are starting discussions with their Canadian counterparts on the increasingly sensitive subject of Canadian internet pharmacies selling price-controlled drugs to US residents.

An official with the US Food and Drug Administration (FDA) said the agency had "just begun discussions" on internet pharmacies with Canada's federal drugs regulator, Health Canada.

The Canadian regulator has been consistently concerned that a flood of sales to US customers could leave shortages of key drugs at home. Internet pharmacies, which sometimes undercut US drugs prices by as much as 80 per cent because of stringent government price controls, have raised a wide spectrum of ethical, trade and political questions.

The growing cross-border Canadian internet drug business illuminates the holes in US healthcare policy and the insufficient drug insurance of many elderly people who cannot afford expensive prescriptions.

Such issues have provided a useful political tool for US politicians currying favour with senior citizens. Even Canadian politicians have used the issue to blast the US system as erroneous.

Although Canadian-purchased prescription drugs bought by US consumers represent only a fraction of the $192bn spent on drugs in a year, it also brings up interstate and international trade questions between the two trading partners.

Big pharmaceutical companies, heavily reliant on the higher profit margins of US sales, would like the practice curbed. GlaxoSmithKline, the UK drugmaker, has already warned Canadian internet pharmacies that it would stop offering them its products if the cross-border sales continued - which in turn prompted a consumer boycott in the US.

Moreover, the issue has backed the FDA into a corner on how it can respond to the growing number of the US senior citizens breaking the law by buying cheaper drugs from Canada. It is unclear what the FDA seeks from its talks with Canadian health authorities, but it has shifted its stance to curbing some import practices.

In another recent policy move, the agency has decided to crack down on "store-front" pharmacies based in the US that simply act as middlemen for Canadian pharmacies. These businesses take Americans' prescriptions and forward them to Canadian pharmacies, where they are filled and returned to US customers.

Health insurers have been put on notice too. The FDA has made clear to insurers that paying for patient's drugs purchased from Canada is against the law. But the FDA intends to focus its policing on businesses, and does not plan to pursue lawbreaking senior citizens. "We're most interested in commercial operations," said Tom McGinnis, FDA director of pharmacy affairs. "We wouldn't target individual consumers."

The powerful senior citizen lobby favours allowing US citizens - particularly fixed-budget elderly people with little health insurance drug coverage - to buy the cheaper drugs from Canada. A law passed in 2000 allowed so-called reimportation but never took effect because federal health authorities would not implement it.