Healthy Skepticism Library item: 1383

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Publication type: news

Zehr L.
U.S. drug boycott threat called 'ridiculous'
The Globe and Mail 2003 Aug 8

Full text:

It’s inconceivable that multinational drug companies will stop shipping pharmaceuticals to Canada as part of a political battle to break the back of Canadian Internet pharmacies that supply American consumers with drugs, industry sources say.

“It’s fear-mongering, nothing more,” said Laurie Gauthier, president of drug wholesaler Prairie Co-operative of Calgary, referring to drug industry threats making the rounds in Washington yesterday where the U.S. Congress continues to debate allowing Americans to have access to lower-priced drugs from other countries.

“These [drug] companies have Canadian patents and if they stop selling or if significant shortages of patented products crop up, the Canadian government can step in and have a generic drug maker supply that product,” he said.

“That’s the last thing the drug industry wants to see happen.”

Jeff Connell, a spokesman for the Canadian Generic Pharmaceutical Association, agrees.

“Any talk of a boycott is ridiculous,” he said, adding that in terms of a backlash, “it would rank up there with the drug industry decision to sue the South African government for importing [lower-priced] AIDS drugs.”

While Ottawa does have the ability to issue so-called compulsory licences to generic companies under the Patent Act, Mr. Connell suggests that “we’re still a very long way from there.”

Nevertheless, Health Canada has shown it isn’t afraid to go up against the multinationals.

Citing a national emergency two years ago, the agency asked generic drug giant Apotex Inc. of Toronto to make the anti-anthrax pill Cipro after patent holder Bayer Inc. initially claimed it couldn’t satisfy Ottawa’s needs to stockpile the drug after the 9/11 terrorist attack.

The latest salvo in the Internet pharmacy war was fired by Pfizer Inc., which last week informed 46 pharmacies in Canada that they must now buy their medicines from the company instead of wholesalers.

The world’s largest drug maker joined GlaxoSmithKline PLC, AstraZeneca PLC and Wyeth in trying to stem the flow of mail-order pharmaceuticals from Canada to the United States, where an estimated one million Americans are saving anywhere from one-third to one-half because of Canadian government price controls and a favourable exchange rate.

While discounting the threat of a boycott, Mr. Connell said he is concerned that the drug lobby has earmarked money to put pressure on the Canadian government to end price controls.

“The issue is to lower prices in the U.S., not raise prices in Canada,” he said.

“What reimportation does is threaten drug prices in the most lucrative market in the world, which is the U.S., and which also has the highest drug prices in the world,” he added.

In a statement yesterday, Glaxo’s Canadian subsidiary said reimportation legislation is still a “work in progress in the U.S. Congress and has not been passed into law. Therefore, it would be inappropriate to speculate on outcomes or scenarios at this time.”

Two weeks ago, in a rare defeat for the drug lobby, the U.S. House of Representatives overwhelmingly approved a bill that would give bulk distributors as well as individual Americans access to buy lower-priced drugs abroad.

It and a Senate bill, which requires the Secretary of Health to guarantee the safety of drug imports, are scheduled to go to committee after Labour Day as part of a compromise plan to add prescription drug coverage to Medicare.

“The genie is out of the bottle,” Mr. Gauthier said. “Americans have seen prescription drugs produced by U.S. companies shipped into Canada and then shipped back at lower prices.”

According to IMS Health, a pharmaceutical sales tracking firm, annual mail-order drug sales from Canada have reached $650-million (U.S.).

“Probably not even 1 per cent of Americans are buying medicines in Canada today but the danger for the drug industry is that if they don’t stop it now, it could grow to 20 per cent in five years and then it would have an impact on the bottom line,” Mr. Gauthier said.

Despite Big Pharma’s crackdown, insiders say Canadian mail-order pharmacies are alive and well.

“Pharmacies that aren’t on the blacklist have become sort of middlemen, supplying the mail-order companies as best they can for a fee,” the source said. “Glaxo products are now coming into Canada from New Zealand [and being sold to Americans] because they’re even cheaper than the Canadian prices.”