Pfizer Moves to Try to Stop Drugs From Canada

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Pfizer Moves to Try to Stop Drugs From Canada

By Bernard Simon, the New York Times

January 14, 2004

The Minnesota Senior Federation has sponsored bus trips to Canada for the elderly to buy drugs. The group has 4,000 to 5,000 members in 50 states

TORONTO - Pfizer is stepping up its efforts to stop exports of low-price prescription drugs from Canada to the United States by imposing new restrictions on sales to Canadian drug wholesalers.

In a letter to Canadian retail pharmacies, Pfizer said that it would immediately require wholesale distributors to report past and present orders of Pfizer products from individual drugstores.

"Under Pfizer's new sales policy," the letter says, "distributors will only be authorized to deal with approved purchasers of Pfizer products."

Online and mail-order drugstores in Canada supply prescription drugs to an estimated one million Americans. Drugs are significantly cheaper in Canada because of government price controls.

Although drug imports are banned under United States law, the Food and Drug Administration has the discretion to allow small amounts to be imported for personal use. A growing number of states and municipalities have called for the ban to be eased so they can lower drug costs for their employees.

But the pharmaceutical industry, concerned about the potential erosion of its biggest market, opposes any relaxation of the import ban.

"We are strongly against the export of our medications," Jill McKinlay-Morris, a spokeswoman for GlaxoSmithKline's Canadian unit, said. "This practice presents serious issues for Canada 's health care system, puts a strain on supply of medicines for Canadians and poses a safety risk for American patients accessing Canadian medications."

She added, "We continue to do everything we can to manage our medication supply in Canada ." Unlike Pfizer, Glaxo sells directly to retail pharmacies, hoping to cut off supplies to online drugstores and any distributor or pharmacy that might supply them.

The online drugstores have used different tactics to circumvent restrictions, including payments to storefront pharmacies in exchange for supplies. Some shareholders in online drugstores also own retail outlets, allowing them to move supplies between the businesses.

"There's been a tremendous amount of ingenuity from Canadian exporters in finding ways to do this," said Peter Wyckoff, executive director of the Minnesota Senior Federation's metropolitan region in St. Paul . The federation, a nonprofit advocacy organization for older people, began a program last year to help them buy drugs from Canada and has signed up 4,000 to 5,000 members in 50 states, Mr. Wyckoff said. He added that he had noticed no decline in supplies from Canada .

Nevertheless, the drive to curb exports and a sharp appreciation in the Canadian dollar have eaten into the business of online pharmacies.

"We're a cornered badger right now," said David MacKay, director of the Canadian International Pharmacy Association, which represents about 20 online drugstores. "Sales have plateaued somewhat. The dollar is squeezing us."

One big Canadian distributor said that his company had always supplied the information that Pfizer now required, but that he did not know whether Pfizer's policy complied with a Canadian privacy law that took effect on Jan. 1. The distributor said he was consulting lawyers to determine whether he could supply data on his customers to Pfizer.

Don Sancton, a spokesman for Pfizer's Canadian unit, based in Montreal , said that until now, some distributors had supplied the information, while others had not. "We're making this a requirement for everyone," Mr. Sancton said, adding that he knew of no connection with the new privacy law.

Last month, Pfizer told its distributors that they must seek approval to sell to any new pharmacy or any pharmacy whose purchases exceeded certain amounts. Pfizer's letter, sent Monday, forbids pharmacies to export its products.

"This includes not selling, transferring or distributing products to any person that you know, or have reasonable grounds for believing, will or may export Pfizer products out of Canada ," the letter said. "Any breach of the terms of this letter will result in Pfizer refusing all further sales to you."