Glaxo Under Fresh Attack in US

Lauren Chambliss in New York, This is London

 March 6, 2003

DRUGS group GlaxoSmithKline is facing a growing consumer boycott in the US, at the same time as it is fighting in court to protect its patents from cheaper generic alternatives.

Consumer and healthcare groups say thousands are boycotting Glaxo's over-the-counter products, such as Tums, Aquafresh and Contac, to protest against the company's decision to cut off Americans' access to less-expensive drugs shipped from Canada.

The trouble for Glaxo began when the company stopped shipments of products to Canadian pharmacies. Price controls there mean that prescriptions can cost from 30% to 80% less than in US drug stores. The practice of cross-border-shopping has become so widespread that many US pensioners' groups have websites offering links to Canadian pharmacies that specialise in handling US patients.

Glaxo says so many of its drugs were being diverted to US that there were shortages for Canadian patients. It insists it is shutting down the Canadian pipeline to protect patients from poorly regulated internet sales.

'The issue is one of patient safety and illegality,' said spokeswoman Nancy Pekarek. 'In the past week we had the head of the Food and Drug Administration saying you can't guarantee the safety of prescriptions filled through the internet. We don't know if the drugs have been stored properly or tampered with.' Glaxo has the backing of America's biggest pharmacy group and other medical organisations.

But consumer groups and politicians say profit is its real motive. There is a bill in the US Congress to deny tax breaks to companies that restrict shipments to Canadian pharmacies and full-page adverts in the New York Times and other newspapers have generated publicity for the protesters. Pharmacists in Canada, some of which are running low on Glaxo supplies for shipment, are considering legal action.

'This issue has crystallised the anger people feel toward drug companies and the high cost of medicines in the US,' said Mike Burgess, director of the New York Senior Action Council in Albany.

• After losing a court case on patent protection for its blockbuster antidepressant Paxil, Glaxo was back in court on Wednesday, appealing against a previous ruling that opened up competition for Augmentin, its popular antibiotic. Several generic companies are already selling inexpensive versions. Analysts say GSK is unlikely to win an appeal that would force generics off US shelves, although it could receive compensation. A ruling is expected within four months.