By ABIGAIL KLINGBEIL
THE JOURNAL NEWS
(Original publication: January 14, 2003)

The pharmaceutical company GlaxoSmithKline PLC will stop selling its drugs to Canadian wholesalers and pharmacists Jan. 21 if they continue shipping drug orders to Americans, the British company said in a letter.

Other pharmaceutical companies contacted yesterday, including Wyeth and Pfizer Inc., said they are closely monitoring the situation in Canada.

A growing number of American citizens, mainly seniors, have turned to Canada as an alternative prescription supplier as U.S. drug prices have escalated. Unlike the United States, Canada's government negotiates nationwide drug prices, on behalf of its citizens, with manufacturers. This often leads to less expensive drug prices than in the United States. In addition, the exchange rate strongly favors U.S. dollars.

The Manitoba International Pharmacists Association estimates about one million U.S. residents obtain drugs through Canadian pharmacies that they otherwise could not afford. Typically, U.S. customers pay half what they would pay for the same drug in the United States when they buy from Canadian sources, the Canadian industry group said.

In letters sent to Canadian pharmacists and wholesalers, GlaxoSmithKline said its Canadian products are approved for sale only in Canada.

"In the interest of patient safety and the maintenance of an adequate supply in this country, GSK is strongly against the Internet sale and export of its Canadian medications," Steven Popp, director of customer operations and distribution strategy for GlaxoSmithKline said in the letter.

"Our medications should be prescribed and monitored by a physician through face-to-face visits, with a continuity of care from the healthcare providers, in order to ensure proper diagnosis of disease and management of medication use," Popp said.

Sixty-nine-year-old James McKinney, who lives on Manhattan's Upper East Side, buys three prescription drugs from an online Canadian company, Hometown Meds. The former business consultant lost his company-provided health care benefits when he retired six weeks ago.

"The drug companies are going to have to come to a realization, either through national legislation or by giving up some of their greed, that drug prices in this country are too high," McKinney said.

Those cost differences have encouraged Canadian pharmacies to find customers in the United States, despite a change in U.S. law that restricts those exports.

Assuming these drugs are made in the United States, it would be illegal for them to be sold back into the United States to anyone other than the original manufacturer, a U.S. Food and Drug Administration official said yesterday. In the late 1980s, Congress issued a bill to prevent re-exportation by anyone other than the manufacturer to thwart counterfeiters.

The FDA official said the agency practices enforcement discretion and focuses more on preventing large amounts of re-exported prescription drugs from flooding the U.S. market than stopping small shipments for use by individuals.

The FDA official said the agency does worry that U.S. patients may not get the label information they need when they buy the drugs over the Internet instead of from a U.S. pharmacy.

New York's state comptroller, Alan Hevesi said yesterday that he'll urge GlaxoSmithKline to reverse its stance on trying to block Canadian pharmacies from selling low-cost drugs to New Yorkers. Hevesi oversees the state's $102 billion employee retirement fund, which holds 5.2 million shares of stock of Glaxo Smith Kline.

"I'd be glad to talk to them and urge them to understand the concerns of the retirees," Hevesi said.

Michael Burgess of the Statewide Senior Action Council called on Hevesi yesterday "to consider 'blacklisting' the company and withdrawing any pension investments in it," if it doesn't change its stance. "We are asking you to consider taking action against them through your considerable power as head of the state Retirement Fund," Burgess said in a letter to Hevesi.

Paul Clark, a pharmacist in Carman, Manitoba, opened Hometown Meds on the Internet this past summer and has customers throughout the New York metro area.

"Our customers, generally speaking, are a group of people, particularly seniors, who quite honestly don't have another option," Clark said. "None of the manufacturers have been particularly thrilled about us selling into the U.S. market just from a profit standpoint."

American customers must send a copy or their original prescription from their physician before Hometown Meds will fill the order. A physician and two pharmacists at Hometown Meds review the prescription before filling it.

"It seems to me this is more about bullying than legitimate concerns," Clark said. "I would assume that if GlaxoSmithKline is successful in shutting down this part of the business that other manufacturers will jump on soon," he said.

Lowell Weiner, a spokesman for Madison, N.J.-based Wyeth, said the company is concerned about patient safety and also maintaining adequate product supply for patients in Canada. With 2,900 employees, Wyeth's manufacturing and research and development campus in Pearl River is Rockland County's largest employer.

"We have similar concerns that Glaxo raised and we are monitoring the situation very carefully. In addition, we did send a letter in July to customers in Canada from the Canadian affiliate," Weiner said. "That letter basically said that this concern involved exportation of Canadian products outside of Canadian borders and the purpose of the letter is to advise that all products distributed by Wyeth in Canada are for sale in Canada only and are not for export."

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