Healthy Skepticism Library item: 1145

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Publication type: news

Silverman E.
The Canada Connection: Drugs cheaper, if more controversial, through our northern friends
The Star-Ledger 2003 May 22

Full text:

The road to cheaper prescription drugs may run through Eatontown.

That is where Sidney Goldwert, a retired garment executive, has just opened what is believed to be the first store in New Jersey devoted to importing prescription medicines.

Called Discount Drugs of Canada, the shop offers the usual brand-names, but claims to charge less than pharmacies. All a consumer must do is provide a prescription, medical history and a credit card, which are reviewed in Canada. Three weeks later, the drugs are shipped to their homes.

“We’re performing a service. People will go where the prices are right. And we have the right prices,” said Goldwert, 73, who was quick to add that he isn’t a pharmacist and doesn’t stock medicines at his sparsely furnished storefront. “Just watch. This is going to be big.”

That remains to be seen. Drug makers and federal regulators say importing medicines from Canada places Americans in jeopardy.

“It’s illegal,” Mark McClellan, the Food and Drug Administration commissioner, told The Star-Ledger in an interview last week. “We’ve made clear that we can’t guarantee the safety of those medicines.”

Goldwert’s store is the latest symbol of the heated battle about the cost of prescription drugs, which pits the nation’s pharmaceutical industry against anxious seniors and cash-strapped state governments.

Between 1997 and 2002, the prices of 50 medicines most frequently used by older Americans rose an average of 27 percent, which was more than twice the 12 percent inflation rate during that period. Spending on prescription drugs rose 17 percent in 2001, the last year for which data was available.

The out-of-pocket costs are onerous for many.

Up to 65 million Americans lack insurance for medicines, including about one-third of the estimated 40 million senior citizens and people with disabilities on Medicare, which doesn’t cover prescription drugs. The Bush administration and Congress have vowed to add a Medicare drug benefit, but have yet to do so.

Nearly 20 states, including New Jersey, are considering programs for their uninsured residents that would demand bigger discounts from drug makers. Earlier this week, the Supreme Court allowed Maine to start a program that Wall Street thinks may be imitated nationwide.

Meanwhile, angry and impatient seniors are increasingly traveling to Canada, where the same drugs are often sold for less because the Canadian government regulates prices. Some consumers are turning to the Internet, where mail-order businesses promise easy medical approval and fast deliveries.

“The rising costs are being felt by everybody,” said John Rother, policy director of AARP. “It doesn’t make any difference if you’re a senior, a company executive or a state treasurer — drugs are becoming more and more expensive. It’s bad out there.”

For his part, Goldwert aims to provide some relief.

He opened last month after reading about another retired garment executive who opened a Florida storefront last winter and had begun selling franchises.

Goldwert’s store is the 37th in the Discount Drugs of Canada chain that spans 10 states, according to founder Earle Turow. Goldwert plans to add another in Monmouth County.

It’s not clear, however, whether he will get the chance.

Drug makers are fighting what they call “reimportation,” the practice of buying drugs in Canada that were shipped there by drug makers based here. GlaxoSmithkline, for instance, recently cut off wholesalers that allow its drugs to be shipped to U.S. consumers by Canadian pharmacies.

The FDA has sent a warning letter to a similar chain based in Arkansas, but the agency has not taken any action against Turow, although he said he was visited by Florida health officials. Nor has the FDA contacted Goldwert, who hasn’t been shy about letting the public know where he can be found — he’s advertised regularly since opening in mid-April.

But the FDA’s McClellan said the agency plans to work with the states on enforcement. A spokeswoman for New Jersey’s Consumer Affairs Department, which oversees the Board of Pharmacy, said the state does not have any laws that would prevent Goldwert or others from opening such stores.

Last week, the New Jersey Assembly passed a bill containing an amendment that would make it illegal for anyone outside the United States to ship prescription The Canada Connection