Canadian mail-order pharmacy in turmoil

February 7, 2005

Already hurt by a drug company clampdown on supplies and a falling U.S. dollar that have raised prices to American consumers, Canadian mail-order pharmacies are bracing for a federal regulatory crackdown that they claim will force them to set up shop on friendlier shores.

Already hurt by a drug company clampdown on supplies and a falling U.S. dollar that have raised prices to American consumers, Canadian mail-order pharmacies are bracing for a federal regulatory crackdown that they claim will force them to set up shop on friendlier shores.

Canada Health Minister Ujjal Dosanjh has proposed three regulatory changes to protect the country's domestic drug supply and pricing structure. He has proposed making it illegal for Canadian doctors to co-sign foreign scripts, prohibiting noncitizens from acquiring drugs unless they come to Canada and are physically examined by a Canadian doctor, and prohibiting certain drugs in short supply from being dispensed to foreigners.

Dosanjh was expected to deliver his final recommendations to the cabinet late last month. By using the order-in-council process, the government does not have to consult with the House of Commons and members of the opposition. And a requirement for a 75-day stakeholder consultation period could be waived.

Most Canadian mail-order pharmacies have drafted contingency plans to move their operations if the federal government follows through with its regulatory plans. "We have already begun to diversify our operations as a result of the drug supply restriction schemes of seven manufacturers," MacKay told Drug Topics.

"All of the CIPA pharmacies have contingency plans for foreign fulfillment-primarily in the European Union," MacKay continued. "Fulfillment would occur overseas with some aspects of the operations such as call centers remaining in Canada. Some will be partnerships; some will be operations owned by the original Canadian pharmacy. Distance-based healthcare delivery is a global trend that cannot be stifled. Instead of regulating a small pipeline from Canada, this will become a worldwide distribution model that involves more than 20 countries without sacrificing safety."

It's not clear where the Canadian regulations will leave the states that have set up drug importation plans. Also up in the air is Rhode Island's new law authorizing the state pharmacy board to license Canadian mail-order pharmacies. The new law, which expires on Dec. 31, 2007, was enacted last summer without the signature of the governor, who was leery of openly flouting U.S. drug laws.

A legal challenge to the new licensure law has been ruled out by the Rhode Island Pharmacists Association, said executive director Jack Hutson. He added that communications with the Food & Drug Administration indicated the agency would send a letter to the state attorney general saying importation is illegal.

"Everyone already knows it's illegal," Hutson said. "The reality is that proponents of drug importation wear its illegality like a badge of honor. The pharmacy board rejected the licensure regulations that were proposed. The department of health did very little work on promulgating the regulations because it fully expected to be enjoined in a lawsuit. That's not happening. This thing is going through."

The state pharmacy board did not respond to requests for comment on the new law or how it plans to implement it. However, there have been inquiries about the licensure regulations that appear to require only that pharmacies hold a valid Canadian license, said Carmen Catizone, executive director, National Association of Boards of Pharmacy.

The Rhode Island situation is worrisome because if it is not legally knocked down, other states will opt for licensure of Canadian pharmacies, said Catizone. "Our concern is that legislators and governors are bypassing the pharmacy board and, second, where does it end?" he said. "I don't put much credence in the Canadian pharmacies' threats to move to Great Britain because they're already operating there anyway. It almost seems as if it won't end unless the FDA takes legal action against a state or municipality or we simply create global pharmacies."