Seniors groups boycott Glaxo over Canada move

Published 02/21/2003


Seniors groups from 12 states, including Minnesota, launched a boycott Thursday of nonprescription products of GlaxoSmithKline because the drug company has cut off drug sales to Canadian firms that resell the drugs to Americans.

"People in America, including Minnesotans, pay the world's highest prices for drugs," said Kate Stahl, 83, metro president of the Minnesota Senior Federation. "Now, if they're going to boycott us, we're going to boycott them."

The federation began a drug-import program for members last month on the same day Glaxo announced it would not provide its drugs to companies supplying programs such as the federation's.

British-based Glaxo is one of the world's largest drug makers, with sales last year of $31.8 billion, 85 percent of that from sales of pharmaceuticals such as Paxil, Advair and Zyban. Its pretax profit margin last year was 30.5 percent.

"We're not asking people to stop using Glaxo prescriptions if that's what you need," Stahl said. "But we are asking you to stop buying their other products, like Aqua Velva Aftershave, Nytol, Polident, Sominex and Tums.

The boycott is called "Tums Down to Glaxo," and includes seniors' groups in New York, California, Wisconsin, Indiana, Pennsylvania, Maine, Vermont, Massachusetts, New Hampshire, Washington and Texas.

Glaxo officials Wednesday told some of the boycott organizers they would like to meet, said Peter Wyckoff, executive director of the federation. No meeting has been set yet.

Some seniors picketed outside Glaxo's U.S. headquarters in Philadelphia Thursday, and rallies were held in New York and San Francisco.

The Minnesota Senior Federation has provided staff support for organizing the nationwide boycott. The coalition of seniors groups is chaired by Miriam Reibold, 86, of West St. Paul, who also heads the National Coalition of Consumer Organizations on Aging.

In addition, the senior groups have asked state attorneys general in Minnesota and New York to investigate whether Glaxo's action violates state laws.

Glaxo cites safety

A Glaxo spokeswoman said the sales through Canadian firms to Americans represent less than 1 percent of total U.S. sales, and said the company's concern is not lost profits but whether the shipped drugs are safe for patients.

The U.S. Food and Drug Administration has warned consumers that there may be safety risks in using imported drugs, and that it violates U.S. law. But it has not taken action against the estimated 1.2 million Americans who are spending between $500 million and $1 billion a year in the rapidly growing reimportation market.

Sen. Mark Dayton, D-Minn., who has used his Senate income to finance the federation's bus trips to Canada to buy cheaper drugs, endorsed the boycott during a news conference Thursday at the federation office in St. Paul.

The drug company's action "reminds me of the robber barons back in the days of the industrial monopolies, when somebody tried to set up economic competition and they sent in their goons to bust it up," he said. "Now we have companies trying to dictate trade policy."

On Wednesday, Dayton joined as a sponsor of legislation proposed by Sen. Russell Feingold, D-Wis., that would withhold tax breaks to pharmaceutical companies that restrict shipments of drugs to Canada.

Cut-rate prices

On Jan. 21, the federation unveiled a program, test marketed by 400 members for the previous half-year, in which members could order prescriptions at prices averaging about 45 percent lower than in the Twin Cities. About 1,800 drugs are available.

Within 10 days, the number of people ordering through the program grew from 400 to 700, and federation officials said they expect about 1,500 users by the end of February. Since Jan. 22, more than 1,000 people have joined the 25,000-member group.

But the same day the federation announced the program, Glaxo announced it would stop selling drugs to about 70 Canadian companies selling them to Americans at prices near those the government has set for Canadians.

The Canadian government regulates both wholesale and retail drug prices. The Minnesota Senior Federation and other groups have lobbied Congress for years to either control prices or negotiate lower prices in the United States.

CanadaRX, a Toronto-based company that supplies prescriptions to the Minnesota Senior Federation program, has been cut off from Glaxo drugs but still has several weeks of supplies, its president, John Lubelski, said Thursday.

"Glaxo drugs represent about 10 percent of our sales, so we can continue supplying prescriptions, but we may run out of Glaxo drugs if there is no change," he said.

-- Warren Wolfe is at wolfe@startribune.com.

© Copyright 2003 Star Tribune. All rights reserved.



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