Busy medicine trade alleged to hurt Canada

Critics in Manitoba say huge U.S. demand is drying up supplies

Drug firm retaliation blamed

Boom has raised pay of druggists beyond reach of rural stores, they say

January 04, 2004|By Cyril T. Zaneski | Cyril T. Zaneski,SUN STAFF

VITA, Manitoba - Dueck Drug Store is booming in this speck of a town on the endless prairie near the Minnesota border.

Dueck's - whose motto is, "We do the little things" - is where folks post notices of garage sales and want ads. And it's where a dozen shoppers browsed for greeting cards, beauty supplies and Christmas decorations while waiting for their prescriptions to be filled one recent weekday morning.

But the store's owner, Lothar Dueck, fears that stores like his are being blown off the Canadian map by a blizzard of new companies that sell prescription drugs to Americans over the Internet.

The Internet pharmacies, which are expected to sell almost $1 billion in drugs to Americans this year, have gone in just three years from an eBay lark by a twenty-something pharmacist to an industry with 175 businesses.

As Dueck sees it, the new pharmacies are creating a crisis in Canada by depleting drug inventories, raising medicine prices and pushing salaries for pharmacists beyond the reach of small-town drugstores like his.

"The only reason I have a pharmacist working with me is I grew my own," Dueck said, referring to his daughter, Marla, who recently returned from college to join her dad behind the pharmacy counter. "Without her, I wouldn't be able to stay in business."

This is the flip side of the U.S. prescription drug crisis. Rising prices for medicine and lack of prescription drug insurance coverage at home have driven elderly Americans to take advantage of a Canadian health care system that regulates the price of prescription medications. Americans have begun buying large numbers of drugs by computer, mail and fax from Canadian pharmacies that offer prices as much as 70 percent lower than those in the United States.

The American demand for inexpensive drugs from Canada is exploding, even though U.S. law restricts their importation.

The Bush administration has been reluctant to crack down on senior citizens and the growing number of state and local governments that are joining them in the quest for cheaper medicine in Canada. But the drug manufacturers have begun taking steps to protect their $192 billion U.S. market by quashing the cross-border drug trade.

Four pharmaceutical companies - Pfizer Inc., Glaxo- SmithKline PLC, AstraZeneca PLC and Wyeth - announced plans in recent months to limit supplies to Canada. Pfizer Canada Inc., for example, told its distributors in a Dec. 4 memo that it would permit sales of its products only to those purchasers that have been approved by the company, meaning those that do not sell across the border.

The squeezing of supplies has grabbed the attention of Canadian seniors.

"We feel for our American friends south of the border, but we feel that it's an American problem, and one that should be solved in Washington and not at the expense of Canadians," said Chuck Cruden, 69, a retired Winnipeg businessman and an officer in the Manitoba Society of Seniors. "With all that we're hearing, there's a real concern about what's going to happen with drug prices and availability here."

The Coalition for Manitoba Pharmacy, which formed last summer to represent so-called "brick and mortar" pharmacies, blames the rise of the Internet operations for driving the salaries of pharmacists beyond the reach of tiny, isolated rural communities like Vita.

Internet pharmacies offer about 60 percent higher salaries and have driven up pharmacist salaries 25 percent in the past two years, said Greg Skura, a partner in Super Thrifty Drugs, a chain of 14 stores. The pay is lucrative for pharmacists, he said, because they can make C$100 for filling a U.S. prescription, compared with C$6.75 for filling a government-subsidized prescription for poor Canadians.

As a result, Skura said, he has been forced to close one rural pharmacy two hours west of Winnipeg, despite offering a C$110,000 annual salary, a share of the store's profit and use of a three-bedroom house.

"What's happening is a cash grab," Skura said. "And it isn't benefiting ordinary Manitobans."

Dueck, the president of the coalition, said that it has become difficult to get some drugs in Canada because drug manufacturers are cracking down on exports to the United States.

"We're rationing our supply of some drugs," Dueck said. "And it's because we're diverting an awful lot of medicine from the Canadian drug system to the United States. The shortages are not coincidental."

Leaders of the Internet pharmacy industry dispute accusations that their businesses are upsetting traditional pharmacies.

Salaries for pharmacists, especially those in rural Canada, began rising prior to the birth of the Internet pharmacy business, and the increase is linked to the rise of "big box" chain pharmacies like Wal-Mart's, said David MacKay, executive director of the Canadian International Pharmacy Association, which represents about 25 Internet pharmacies.

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