Senior Groups Begin Boycott of Drug Maker

They take action after Glaxo halts supplies to Canadian pharmacies that give Americans steep discounts on prescription medicines.

By Catherine Saillant, LA Times

 February 9, 2003

With a battle cry of "Tums down!" senior citizens groups have started a boycott of drug giant GlaxoSmithKline, after the company cut supplies to Canadian pharmacies that sell its drugs to Americans on the Internet at bargain prices.

The seniors are taking aim at the British maker of Tums antacid, Aquafresh toothpaste, Contac cold remedy and dozens of common prescription medicines, calling Glaxo's decision "mean-spirited" and harmful to older people.

Last week, hundreds of groups began an e-mail and phone campaign urging U.S. consumers to stop buying Glaxo's over-the-counter products. Organizers plan to publicize the boycott with a Feb. 20 rally outside Glaxo's U.S. operations in Philadelphia, said Pedro Rodriguez, who heads that city's Action Alliance of Senior Citizens.

"Glaxo has really picked a fight with the wrong group," Rodriguez said. "They have the money, but we have the people."

On Jan. 21, Glaxo stopped shipping its prescription drugs, including such popular medicines as the antidepressant Paxil and allergy drug Flonase, to Canadian pharmacies. Shipments will not resume, the company said, until the pharmacies stop filling U.S. prescriptions. Patients could be putting themselves at risk from unsafe or counterfeit medicines that are not regulated by U.S. authorities, the company said.

"We're sorry to hear that seniors may choose not to buy our over-the-counter products in response to this," Glaxo spokeswoman Patty Seif said Friday. "But we are doing this out of patient safety."

Company officials also suggested the boycott is being engineered by Canadian druggists, who stand to lose business. Rodriguez scoffed at that, saying, "This is pure and simple American anger at the corporate greed of the drug industry."

Activists maintain that Glaxo's move was prompted by profits. Like other drug companies, it has been losing American customers to Canadian pharmacies that offer cut-rate deals over the Internet, senior advocates say.

A favorable currency exchange rate and Canadian government price controls mean prescriptions can cost up to 80% less in Canada than in the U.S., and many Americans are taking advantage of the savings.

If consumers do not challenge Glaxo, the world's second-largest drug maker with $29.5 billion in annual sales, other drug companies may follow its lead, the activists say. That would effectively shut off an avenue to lower-priced medicines that is used increasingly by the uninsured and seniors of moderate means, they say.

Elvira DeBernardis, 83, is one of them. Her daughter learned that her mother could save 50% on the eight medications she relies on to control blood pressure, cholesterol and other ailments by buying them from Canada. For the last year, DeBernardis' doctor has called a Winnipeg pharmacy every three months to renew her Internet order. The drugs are mailed to her West Los Angeles home.

DeBernardis, who gets by on Medicare and her Social Security check, worries about what will happen if cross-border sales are curtailed. Medicare does not cover prescription drugs.

"We are paying a tremendous amount of money in the United States," she said. "So I hope it all turns out OK."

Chicago interior designer Kirstin Williams turned to Canada to help her 89-year-old grandmother find bargains. Lucille Gustafson had insurance that covered her drugs until her husband, a retired railroad man, died recently, Williams said.

"These are people who worked for hardly anything their whole lives and now they are having to struggle again," Williams said. "It's really kind of dehumanizing."

Seif said Glaxo offers two discount cards that can slash up to 40% off prices for eligible seniors. She also noted that the regulations governing importing drugs for personal use are muddy and seniors could be violating U.S. law.

U.S. Food and Drug Administration officials, however, have repeatedly said they will not act against Americans who are buying Canadian prescriptions for their own needs.

The move against Glaxo has senior action councils in Pennsylvania, New York, California and 15 other states tapping hundreds of local senior groups, sympathetic physicians and union members to get out word of the boycott, dubbed "Tums Down."

One New York group's Web site urged seniors to use their consumer power to "strike back" against Glaxo. The posting by New York Statewide Senior Action Council also lists the products that boycott supporters should refrain from buying "in direct retaliation for Glaxo refusing to sell to Canadian Internet pharmacies that sell to Americans."

Bruce Livingston, executive director of the Senior Action Network in San Francisco, said his group voted last week to join the campaign.

"The people have to make their voice heard because the pharmaceutical industry has way too much power over the legislative process," he said. "They've held up [price] reforms we think are necessary."

American drug makers do not release cross-border sales tallies or information about the effect of such sales on their $400-billion industry. But an official with AARP, the senior citizens' advocacy group, said drug company officials have told him that the Internet trade to Canada is growing by 20% to 30% a month.

"What this is showing is the extreme hardship of people on this side of the border to afford the medications they need," AARP spokesman Steve Hahn said. "It speaks volumes about the need for a Medicare drug benefit for seniors."

Glaxo also supports congressional passage of a drug benefit.

"We believe that is the long-term answer to this problem," Seif said.

New York-based Pfizer Inc., the world's largest drug maker, and New Jersey-based Merck & Co., the third largest, said they are closely watching Glaxo's action but have not decided whether they would follow suit.

Cross-border Internet pharmacies now number in the dozens. They sprouted up in recent years as the cost of U.S. prescriptions spiraled, Canadian pharmacists said.

Daren Jorgenson, a Winnipeg pharmacist who operates Canadameds.com, said his Web site business grew from two to 500 employees in three years, serving 200,000 U.S. customers. He and other druggists stockpiled supplies in anticipation of Glaxo's action, he said.

"But in about a month from now, they will be calling to refill their prescriptions," he said, "and we will have to tell them we can't fill it because we don't have any."