News Article

Canadian Web Drugstores Offer Deep Discounts, Legal Quandaries
The Wall Street Journal
Laura Johannes

Harriet Joy White wanted to get rock-bottom Canadian prices for her cholesterol-lowering medication, but she was too far away to conveniently hop a bus, as others have done. Instead, she ordered from her home in Fort Myers, Fla.

With a few clicks of the mouse, the 73-year-old connected to a Canadian pharmacy 1,400 miles away and, after faxing her prescription, ordered a three-month supply of Zocor for $220 -- about 20% less than the cheapest U.S. price she could find.

"As a senior citizen living on a retirement income," says the elated Mrs. White, "I think I should get the best price I can."

While politicians stand on their soapboxes and wail about high prescription-drug prices in the U.S., a growing number of Americans are quietly finding a solution. By logging onto three different Web sites owned and run by Canadian pharmacists and entrepreneurs, U.S. residents are saving 20% to 50%, and occasionally more, on prescription drugs, even after dispensing and shipping fees.

The Internet is a far more convenient alternative than the well-publicized bus trips to Canada organized for seniors last year by sympathetic legislators. Government controls in Canada help keep prices low. Customers ordering from Canada also enjoy a favorable exchange rate: about 66 U.S. cents per Canadian dollar Wednesday.

One catch: Ordering drugs from Canada to save money is technically illegal in the U.S., though authorities so far have mostly looked the other way. Under U.S. Food and Drug Administration guidelines, citizens can import up to three months of medicines for personal use -- but only if those medicines are not available in the U.S.

The FDA, however, is concerned mainly with policing large commercial shipments and isn't able to seize all, or even most, of the small parcels of medication arriving for personal use. "We haven't been going after individuals, because we don't have the manpower," says Tom McGinnis, director of pharmacy affairs at FDA headquarters in Rockville, Md.

Canadian authorities, meanwhile, are considering new rules that would make it harder for Internet pharmacies based there to fill orders from the U.S.

Demand for Canadian imports has been fueled as increasingly expensive drugs have hit the U.S. market in recent years. Since Medicare doesn't cover prescription drugs, only about a third of U.S. seniors have full prescription-drug coverage, according to University of Minnesota's Prime Institute, a research group in Minneapolis studying pharmaceutical-industry economics. Another third have partial coverage, and the rest have no coverage at all.

Last year, Congress passed legislation that would allow pharmacies and wholesalers to import drugs from certain countries and resell them here. But last month, implementation of the law was blocked by the Clinton administration, which said the law's many loopholes rendered it useless.

Meanwhile, the Canadian drugstore says it is shipping 100 prescriptions daily to U.S. customers, many of whom are uninsured seniors. The Toronto business, started last fall by three entrepreneurs, two of whom are pharmacists, is already scrambling to secure larger office space and hire more employees to fill orders. Co-owner Billy Shawn, a Toronto businessman, says he has gotten little sleep the past month. "If I go to sleep," he says, "we'll get behind."

Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, Washington, D.C., says the growth of such online businesses "just underscores the urgency" of reforming Medicare so that it covers prescription drugs.

If Congress doesn't pass new legislation to legalize importation from Canada, consumers will continue to find loopholes, says Stephen W. Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota, Minneapolis. "You can't keep them down on the farm once they've been to Paris -- or Quebec in this case," says Mr. Schondelmeyer, who is also director of the Prime Institute.

In addition to cheaper prices on brand-name drugs, the Canadian Internet sites allow U.S. citizens to get generic versions not yet available in this country. George Richards, 56 years old, of Glen Ellyn, Ill., says his local pharmacy charges $224 for 90 Prozac pills. But through Canadian drugstore, he ordered a generic equivalent of the antidepressant for less than $70. "If this is illegal," he says, "the law is stupid."

A spokesperson for Eli Lilly & Co., Indianapolis, the maker of Prozac, says the Canadian sites are "obviously violating our patent-protection laws" and warns there's no guarantee of the quality of the drugs.

After hearing about CanadaRX from a happy customer, Janice Long, an elder advocate at the Marlborough, Mass., Council on Aging, started helping her clients log onto its site. Since June, Ms. Long says she has helped 20 seniors get discounts collectively worth $14,000 a year. "This has been a godsend for us," says 74-year-old Marlborough resident Eleanor Lacouture, who cut her family's monthly bill for four prescription drugs to about $100 a month from $239 with Ms. Long's help.

In Canada, authorities have begun looking at the practices of the Web sites. However, each of the three says it operates within Canada's laws, which allow pharmacies to fill only prescriptions signed by Canadian doctors. CanadianDrugstore has a local doctor review the U.S. prescription and write a new version. Canada Meds has a doctor review U.S. patients' medical histories before co-signing their prescriptions; it charges $50 for the review, but the customer still comes out ahead when buying a three-month supply. Canada Meds is run out of Point Douglas Pharmacy, Winnipeg, Manitoba. The site and the drugstore are owned by pharmacist Jasmine Wong.

CanadaRX mails medications to the patients' U.S. doctors. The Web site's owner, Hamilton, Ontario, pharmacist John Lubelski, says what it is doing is legal. Mr. McGinnis of the FDA, however, says U.S. doctors who receive such shipments are probably breaking the law. He says it depends on a complex legal interpretation of whether the doctor is acting as a pharmacy under the terms of the law.

The Ontario College of Pharmacy, the regulatory body for pharmacies in Ontario, says it's looking into CanadaRX, which is run out of Mr. Lubelski's Hamilton-based Kohler's Drugstore. Other pharmacies work with the site as well, but Mr. Lubelski declines to name them.

Meanwhile, a movement is afoot to tighten the rules in Manitoba, where Canada Meds is based. A committee of the Manitoba Pharmaceutical Association recently recommended adopting a standard that could make it tougher for Internet pharmacies to fill orders from the U.S. Some say the standard could be interpreted as barring Internet pharmacies from filling prescriptions originally written by U.S. doctors but signed by Canadian doctors who never saw the U.S. patient.