Pfizer Cuts Supplies to Canadian Drugstores

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Pfizer Cuts Supplies to Canadian Drugstores

By Ceci Connolly, The Washington Post

February 19, 2004

Pfizer Inc., the world's largest drug manufacturer, has cut off supplies to a number of Canadian mail-order pharmacies as part of the escalating battle between the industry and U.S. consumers hunting for bargains across the border.

Pfizer sent a letter Feb. 12 to Winnipeg-based Universal Drug Store and a half dozen other companies informing them that "effective immediately, your pharmacy is no longer approved to purchase Pfizer products from Pfizer Canada's authorized distributors."

Officials at Universal said they have stockpiles of most Pfizer drugs and will look for other distributors. But they and others said that the increasingly tense relations between drug companies and Canadian retailers could make it harder for patients in both countries to purchase life-saving prescription medications.

"This has definitely made it more difficult for mail-order pharmacies in Canada to supply U.S. patients," said Andy Troszok, vice president of the Canadian International Pharmacy Association and an executive at Crossborderpharmacy.com. "The U.S. pharmaceutical industry is threatening the Canadian people. If you allow this to continue, it will create shortages in Canada."

Despite enactment of a Medicare prescription drug package last year, the fight over drug importation by U.S. consumers has not abated. Many seniors, saying they cannot wait for the benefits to begin in 2006, purchase medicines from Canada, where prices can be 30 to 75 percent lower than in the United States.

The Food and Drug Administration maintains that drug importation, sometimes called reimportation, is illegal. But the agency has never prosecuted individual customers, and now several state governments are pursuing Canadian supplies as an option that could save millions.
Pfizer, following the lead of GlaxoSmithKline, said it was limiting supplies to Canadian pharmacies that sell to U.S. customers out of concern that Canadian patients could face shortages.

"The export of pharmaceuticals from Canada represents a violation of our long-standing business terms," said Pfizer spokesman Andy McCormick. "We want to ensure that in Canada, medicines developed by Pfizer are in sufficient supply for Canadians."

The company, which produces drugs such as Lipitor for high cholesterol and Viagra for erectile dysfunction, had international sales of $29.2 billion last year, according to industry analyst IMS Health. Drug sales from Canada to the United States more than doubled to $1.1 billion in 2003, Philadelphia-based IMS reported this week. Even so, Canadian sales were small compared with the $216 billion in total U.S. drug expenditures.
McCormick would not say which drugs might be affected or why the company could not increase production.

Minnesota Attorney General Mike Hatch, who has filed an antitrust suit against GlaxoSmithKline, said concern over drug shortages is "a phony argument" made by a "highly arrogant" industry. If American patients do their shopping from Canadian pharmacies, demand has not gone up, it has simply relocated, he said.

On Capitol Hill, a bipartisan group of senators, including Democrat Edward M. Kennedy (Mass.) and Republicans Charles E. Grassley (Iowa) and John McCain (Ariz.), is considering pushing legislation to legalize drug importation. One version of the bill passed the House easily last year.

Mike Naylor, director of advocacy at the grass-roots seniors group AARP, said the organization supports legal imports from Canada but would have reservations about a broader program that includes the European Union.

"Reimportation continues to be an important issue with our members," he said. "We have heard some expressions of fear that pharmaceuticals will move to make this channel an impossible route for them."

Next week, Illinois Gov. Rod Blagojevich (D) and Minnesota Gov. Tim Pawlenty (R) plan to convene a summit here on rising prescription drug expenditures. Along with Iowa Gov. Tom Vilsack (D), they have taken the lead in pursuing lower-cost pharmaceuticals from Canada.

"Drug companies are far more concerned with protecting their U.S. profits than making sure consumers have access to the life-saving drugs they need," Blagojevich said in a statement yesterday.