Drug cost gap puts heat on FDA Lawmakers consider legalizing practice to cut drug prices

As more Americans buy cheap prescription drugs from Canada, theU.S. government is warning that these medicines might not work andcould be dangerous. "Don't risk your health," a Food and DrugAdministration brochure warns.

Yet, when FDA Associate Commissioner William Hubbard was askedduring a congressional hearing how many times Canadian drugs haveharmed American citizens, he responded, "I know of none."

On Thursday, Gov. Blagojevich called the safety issue a "redherring" and urged the FDA to allow state and local governments toimport drugs from Canada for their employees and retirees. Thegovernor also has ordered a study to determine how much Illinoiscould save by importing drugs. Backing the governor is U.S. Rep. RahmEmanuel (D-Ill.), who has co-sponsored a bill that would allowpatients, pharmacists and wholesalers to import drugs from Canada,the European Union and nine other industrialized countries, thoughnot Mexico. The bill has passed the House.

Canada and most other industrialized countries fix prescriptiondrug prices. In the United States, drug companies can charge whateverthey please for drugs still protected by patents. (Once a drug'spatent expires and generics become available, the competition pushesthe price down sharply.)

Depending on the drug, a consumer can save 20 to 80 percent, saidBrett Bombicino of People's Meds, a Chicago middleman for Canadiandrug sales. Customers, or their doctors, send their prescriptions,along with health questionnaires, to People's Meds. The companyforwards the documents to Total Care Pharmacy in Calgary, Alberta,which then mails the drugs to the patients' homes in seven to 10days.

People's charges a commission of 5 percent to 12 percent.Consumers can avoid such commissions by doing the research themselvesand buying directly from a Canadian Internet pharmacy.

Ninety-year-old Mildred Gunther, of West Rogers Park, said she hascut her drug costs to $350 a month, from $600, by buying from Canada."I was paying a fortune for medications," she said.

Customers typically buy drugs from Canada for chronic conditionssuch as high blood pressure and arthritis, but not for conditionssuch as infections that require immediate treatment.

Like Gunther, many customers are on Medicare, which doesn't payfor drugs. Canadian prices also benefit younger customers who lackdrug coverage. Robert Miller, who is self-employed, saves $120 amonth by buying his diabetes and cholesterol drugs from Canada."Everyone should," the Northbrook man said. "Then, you would seeAmerican drug companies lower their prices."

AARP, the powerful lobby for people 50 and older, supportsimporting drugs from Canada, where "safety violations appear to beminimal in extent and insignificant in nature." The American MedicalAssociation argues that legalizing imports "would be dangerous topatient safety."

Drugs in Canada are regulated by Health Canada, an agency similarto the FDA. And each Canadian province has a pharmacy regulatoryboard, similar to state pharmacy boards in the United States.

"The Canadian system has high quality, First World regulations,"said Dave Robertson, of Total Care Pharmacy. "Millions of Canadianscan't be wrong."

Some drugs in Canada have different brand names but the sameingredients and manufacturer. For example, the heartburn drugPrilosec is sold as Losec in Canada. In most cases, the drugs havethe same brand names, doses and ingredients, Robertson said.

An estimated 50 to 100 Web sites sell Canadian drugs, but it's noteasy to determine which ones are legitimate, the FDA said. Severalsites claiming to be Canadian pharmacies are actually based in Asiaor the Caribbean, Hubbard said, adding, "They all look alike and makethe same claims."

The FDA knows of "isolated and anecdotal" cases in which customersbuying from Canada received either the wrong drug or a drug that wasoutdated, mislabeled or inadequately refrigerated, Hubbard said.

Americans bought $650 million worth of drugs from Canada lastyear, according to IMS Health, and the FDA believes the volume isgrowing. Anyone who buys from Canada is breaking the law, though theFDA said it won't crack down on individuals. The agency has sentabout 100 warning letters to businesses but prosecuted few of thembecause it takes too much time and money, Hubbard said.

Drug companies might prove more successful than the government inshutting off sales from Canada. Several companies reportedly havebegun to restrict drug sales to Canada to keep their drugs fromcoming back to the United States at lower prices.

Jeff Trewhitt, of the Pharmaceutical Research and Manufacturers ofAmerica trade group, said other countries keep drug pricesartificially low. Drug companies have to charge higher prices in theUnited States to recoup research and development costs that total$800 million for a new drug. These higher prices are a big reason whythe United States leads the world in new drug development, Trewhittsaid.

Emanuel counters that the industry spends more on marketing,advertising and administration than on research and development.Companies set prices high to maximize profits, not cover researchcosts, he said.

"People come to the United States from around the world to accessthe best medical care in the world," Emanuel said. "It is ironic andunfair that Americans must go overseas to find affordablemedications."

Comparing drug prices in U.S., Europe and Canada

Drug U.S. Europe Canada

Augmentin $55.50 $8.75 $12.00

Cipro $87.99 $40.75 $53.55

Claritin $89.00 $18.75 $37.50

Coumadin $64.88 $15.80 $24.94

Glucophage $124.65 $22.00 $26.47

Norvasc $67.00 $33.00 $46.27

Paxil $83.29 $49.00 $44.35

Pravachol $85.60 $29.00 $40.00

Premarin $55.42 $8.95 $22.46

Prempro $31.09 $5.75 $14.33

Prilosec $112.00 $49.25 $59.00

Prozac $91.08 $18.50 $20.91

Synthroid $33.93 $8.50 $13.22

Zestril $40.49 $20.00 $20.44

Zocor $123.43 $28.00 $45.49

Zoloft $114.56 $52.50 $47.40

SOURCE: Life Extension Network, 2002