Thursday, May 24, 2007
U.S. demand for Canadian drugs dwindles

BARRIE McKENNA

WASHINGTON -- The once-booming business of selling Canadian prescription drugs to Americans has shrunk in half since 2004-05 as the surging loonie and better U.S. government health insurance erode the price gap.

Annual sales have slipped below $500-million, down from nearly $1-billion in 2004, according to figures supplied by the Canadian International Pharmacy Association (CIPA), which represents Internet and mail-order drugstores.

The figures include sales of drugs to Americans from third countries, mainly in Europe, but brokered by Canadian pharmacies.

The number of Internet pharmacies operating in Canada has also dwindled -- to roughly 30 from 55 over the same period.

Meanwhile, many of the state and city-sponsored drug import programs that had sprung up in defiance of U.S. law have been shut down or curtailed because of a lack of interest from U.S. consumers.

Politicians in Illinois and elsewhere had predicted that the programs would save consumers millions of dollars. Instead, the cost of administering the programs has sometimes outstripped the net savings to buyers.

Earlier this month, the Democratic-led U.S. Senate reignited the drug import debate controversy by voting to legalize the purchase of drugs from other countries.

Most experts, however, say the bill is unlikely ever to take effect because of a clause in the legislation that requires the U.S. Food and Drug Administration to certify that imported drugs are safe -- something the agency has repeatedly refused to do.

Currently, U.S. Customs and Border Protection blocks bulk sales of drugs, while generally turning a blind eye to individual cross-border purchases, even over the Internet.

CIPA president Dawn Polley acknowledged in Washington yesterday that the addition of drug coverage to the U.S. Medicare system, combined with a stronger Canadian dollar, have taken a toll on sales.

Millions of previously uninsured U.S. seniors now get partial reimbursement of their drug costs. Most working Americans don't pay for their drugs directly because they are covered by insurance.

Experts said other factors have cut into cross-border drug sales, including the availability of cheaper generic drugs in the U.S. and fears imported drugs may not be safe.