Online Pharmacies: Is the Tide Finally Turning?

U.S. Sen. Judd Gregg, chairman of the Senate Committee on Health, Education, Labor and Pensions, recently introduced the Safe Importing of Medical Products and Rx Therapies Act, a bill that will allow for importation of prescription drugs from Canada and a number of Western European countries. The Act is designed to combat the high cost of prescription drugs. If signed into law, it would allow individuals, pharmacies and wholesalers to safely import cheaper Food and Drug Administration (FDA) approved prescription drugs from these countries.

The Act would require the federal government to set up a Web site to help consumers purchase drugs online safely. It also would oblige the government to establish licensing requirements and penalties for Internet pharmacies that conduct or solicit business without adhering to the relevant regulations.

There are other legislative initiatives being discussed at both federal and state levels, in addition to actual measures taken by some state and city governments, that basically support the importation of prescription drugs from countries such as Canada as a money-saving tool.

States Taking Action

For example, earlier this year, Minnesota started a state-run Web site that directs consumers to state-approved pharmacies in Canada that sell drugs cheaper. This move resulted in the FDA issuing a warning to Minnesota Gov. Tim Pawlenty.

Alleging that the site is “unsafe,” “unsound” and “illegal,” the FDA is trying to encourage Pawlenty “to do the right thing” and has so far refrained from threatening or taking legal action to shut down the Web site. The governor, however, appears to be standing firm, declaring that the state will continue to operate the site.

Also, the city of Springfield, Massachusetts, has started buying prescription drugs from Canada for its city employees and retirees, saving an estimated US$2 million in the past nine months.

Proponents of drug imports argue that drug companies are now choking off supplies to Canada in an effort to stop such imports into the US. For example, Eli Lilly recently announced that it would be reviewing all orders for Lilly products placed by Internet drug retailers with Lilly-authorized wholesalers before the sale is authorized. According to Lilly, this will enable it to more closely track cross-border flow of its drugs and thereby guarantee adequate supply in Canada.

Lipitor Lawsuit

Also, Pfizer recently filed lawsuits against five Internet sites and is trying to limit the amount of drugs it sells in Canada so that they are not resold in the US.

Specifically, on May 4, Pfizer filed lawsuits against WorldMeds RX, Online RX DrugStore, Generic Lipitors, B.M. International and Offshore Pharma for selling generic versions of a cholesterol-lowering drug, Lipitor, the patent for which has not yet expired in the US.

Some of these sites that are the target of Pfizer’s lawsuits claim that the products originated from India, where drug patents are not recognized.

Pfizer also has tried to eliminate references to Lipitor in advertisements and to eliminate links to sites that direct consumers to unapproved drugs.

These moves by the pharmaceutical companies have a number of Canadian health care groups, including the Canadian Treatment Action Council and the Canadian Hemophilia Society, calling on the Canadian government to ban Internet pharmacies, claiming that Canadians will face drug shortages and higher prices as a result of such pharmacies.

Change of Attitude

Meanwhile, several bills are pending in Congress to permit drug imports from countries such as Canada. Until now, Administration and Republican congressional leaders have opposed such legislation.

However, Senator Gregg’s bill signals a change in US attitudes towards drug imports from countries such as Canada. In further evidence of this change, Secretary of Health and Human Services Tommy Thompson has been quoted as stating that drug imports would help US consumers and that he would advise the federal government not to stand in the way of legislation legalizing the importation of drugs.

Thompson, however, warns that such a move would be expensive because, in order to maintain the safety of these drugs, regulators would have to increase inspections of foreign pharmaceutical plants and packages of prescription drugs being imported into the US.

One example of this is a bill signed by Florida Gov. Jeb Bush that would require operators of online pharmacies seeking to sell medical drugs to people in Florida to apply for an Internet pharmacy permit from the state’s health department.

Despite these concerns, state government sanction of online pharmacies is picking up steam. For example, West Virginia recently set up a council to draft recommendations for controlling drug costs in the state, and one suggestion the council is considering for achieving this goal is setting up state Web sites directing residents to approved online Canadian pharmacies.

Financial Pressure

The financial pressure for action is considerable when it is considered that if, for example, consumers in West Virginia paid the same prices for prescription drugs as those in Australia, the Public Employees Insurance Agency in the state would save $13 million a year on its 10 most prescribed drugs alone.

It is this financial pressure on local and state governments, along with the popular demand for cheaper drugs, that could finally turn the tide in favor of online pharmacies. Specifically, with the support of state governments behind them and with both major parties rushing to introduce legislation to demonstrate their support of cheaper prescription drugs, online pharmacies might have finally found a strong enough ally and the required political climate to fight back against the pharmaceutical industry.

However, whether they will succeed in this fight remains to be determined.

Javad Heydary, an E-Commerce Times columnist, is an e-businessattorney (Ontario & New York) at the Toronto-based law firm of HeydaryHamilton LLP and the managing editor of

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

E-Commerce Times Channels