'Buy Canada' drug plan sweeping U.S.

"When the drug industry talks about safety of Canadian drugs, they're talking about the safety of their profits, not my safety…I'm standing here today because I am the recipient of Canadian prescription drugs.''…prices in Canada are generally 40 per cent less than in the United States — and can be up to 80 per cent cheaper…the top 10 drug companies in the U.S. spend three times more on marketing, public relations and administration than they do on research and development.

The Toronto Star
October 26, 2003

'Buy Canada' drug plan sweeping U.S.
Seniors lead call for cheaper pills. Massachusetts city cuts health costs.
Tim Harper

SPRINGFIELD, Mass.—As he tentatively shuffles to the podium, stooped over his walker for support, 77-year-old Isaac Ben Ezra appears an unlikely revolutionary.

And then he speaks, a baritone rich with passion and anger, defiance and resolve, a voice that is being heard from more and more regions of the United States, and a voice which should be heard loud and clear by U.S. President George W. Bush as he seeks re-election.

It's the voice of American seniors fed up with paying the highest prescription drug prices in the world.

"We are not going to roll over and die,'' says Ben Ezra.

Instead he and some 10 million other Americans are turning to Canada for their drugs. America's senior citizens are now being joined by union members and beneficiaries of government plans who are ignoring U.S. law, threats to choke off supplies and daily warnings from the U.S. Food and Drug Administration that these Canadian buying binges are unsafe

They are disdainful of drug industry profits and angry with politicians, overwhelmingly Republican lawmakers, who have accepted millions of dollars in donations from pharmaceutical firms. Polls have shown Bush losing support among America's seniors, traditionally Republican voters.

Here, in the cradle of the prescription drug revolution there is no turning back.

This tiny western Massachusetts city of 152,000 has already given the world basketball, Dr. Seuss, Milton Bradley board games and Good Housekeeping magazine.

Now it has become the first American city with a Canadian drug plan.

Springfield has so far supplied 1,600 of its insured employees, retirees and dependents with prescription drugs purchased from CanaRx Services in Windsor. The average saving for the city on each prescription is 40 per cent, but can range as high as 80 per cent and it says it can save up to $9 million (U.S.) annually with its "Buy Canada" plan.

Illinois, New York, Minnesota, Michigan, Wisconsin, California and Iowa are either pursuing or studying plans to make it easier for their citizens to buy drugs from Canada.

Other cities in Massachusetts and Vermont are following Springfield's lead and access to Canadian drugs has now become an issue in the gubernatorial election in Kentucky.

American authorities and big drug companies appear powerless to stop a tide of Canadian drug imports which topped $700 million (U.S.) last year — a 50-fold increase over three years.

The Congressional Budget Office estimates Americans could save $40 billion a year by buying drugs in Canada. And Democratic presidential candidate Howard Dean says he would support drug importation if elected.

"The reason I get impassioned,'' Ben Ezra says, "is that I lived through poverty and I lived without access to needed resources. I've been on a breadline, I've been in foster care and I've been on welfare.''

Now, he wants to leave a legacy for generations to follow. He wants American seniors in years to come to have a level of dignity which many today do not have as they try to balance housing, food and soaring prescription drug prices.

"When the drug industry talks about safety of Canadian drugs, they're talking about the safety of their profits, not my safety,'' he says.

"I'm standing here today because I am the recipient of Canadian prescription drugs.''

Moments later, at this rally in support of Canadian drug importation at a Springfield seniors' residence, the entire room joins Bob Lawson, a Longmeadow, Mass., senior who left Charlottetown as a teenager, in standing and singing O Canada, in tribute to a "nation which has saved thousands of lives.''

There are 43.6 million Americans without health insurance, the highest number in five years.

Medicare, a government insurance plan, now covers less of the health costs of beneficiaries than at any time since it was established in 1965, and elderly Americans are paying 22 per cent of their income on health care, more than they spent before the program was established.

Bush is banking on a congressional agreement on a Medicare package, which would provide help for about 10 million Americans with no prescription-drug coverage, in a historic overhaul of the program. Part of the package, which has to be reconciled by the House of Representatives and the Senate, is a House vote that allows drugs to be imported from Canada and Europe.

A majority of senators, however, are on record as opposing it. The two bodies of Congress are expected to vote on the joint bill next month.

But more and more American seniors are saying the Medicare package is not good enough and going on the Internet, or using their fax machines, to buy from Canada.

"We put this on the radar screen,'' Ben Ezra says.

"Five years ago, politicians weren't even talking about this. Now we've got to make sure they understand that instead of a phony deal from Congress, we get the real thing.''

The clamour for prescription drugs from Canada is a world away from seniors' bus tours which used to head across the border for pill-buying expeditions. Springfield Mayor Michael Albano has become a crusader for access to Canadian drugs, but it didn't start that way.

"It started out as cost containment,'' he said in an interview.

His drug costs for the 20,000 who can access city benefits had gone from $8.6 million in 1996 to more than $18 million this year.

He had to lay off 323 city employees this year, including 70 police officers and 52 firefighters and his drug provider, Blue Cross, told him costs next year were heading up another 15 to 20 per cent.

"I had to do something and I just saw what everyday Americans were doing. I didn't invent going to Canada,'' he says.

He flew up to Detroit, crossed the border, met with Canadian doctors and pharmacists and Tony Howard, president of CanaRx Services Inc. He bought insulin last March for his 13-year-old son's diabetes — it was safe and effective.

"It became a no-brainer. It's the responsible thing to do,'' Albano says.

Since then, the mayor has become the poster boy for Canadian drug re-importation and he has a warning for Congress, if it doesn't move quickly to make drugs more affordable.

"This thing is going to land in George Bush's lap next year,'' he says.

The FDA has taken direct aim at CanaRx — even launching a sting operation on an insulin shipment from Howard's company — but finally decided last week they can do nothing to stop the Internet pharmacy because it is based in Canada.

"I don't think we're breaking the law,'' Albano says. "As long as it is personal use, small amounts and 90-day prescriptions, we're like senior citizens going across the border by bus. The FDA also has testified they will not interfere with Internet sales.

"I believe we are no different than those seniors.''

Howard says he is proud to be providing safe affordable medications to Americans and is breaking no law.

In a recent speech to a Washington audience, FDA Commissioner Mark McClellan said he understands the frustration of Americans, but drug imports have become a magnet for criminal and fast-buck artists and state and city governments should not foist their own responsibilities on Canada.

"Rogue medical merchants who have dubious or no medical background are selling potentially dangerous drugs to people who never see the prescribing doctor in person or undergo tests,'' he says.

"At a minimum, these drugs are of unclear origins and safety. At worst, they are improperly repackaged, stored, and labelled, or are out-and-out fakes.''

McClellan says a blitz of four airports over three days recently identified 1,100 unapproved drugs from Canada flooding into this country.

"For many Americans who are left on their own when it comes to prescription drugs, who don't have good coverage and who receive little or no assistance in getting lower prices, the only alternative to high prices here seems to be buying cheap medicines outside this country.

"And more and more people are finding themselves with no other alternatives.''

While it has been well-documented that prices in Canada are generally 40 per cent less than in the United States — and can be up to 80 per cent cheaper — the reasons are not always well understood.

The exchange rate between the Canadian and U.S. dollar plays a role, but in Canada, legislation limits drug price increases to the annual level of inflation.

The Patent Medicine Prices Review Board (PMPRB) sets the price for each new patent medicine placed on the Canadian market, pricing it after comparing it to seven other countries, the United States, Britain, France, Germany, Switzerland, Sweden and Italy.

Canada and every other country in the comparison basket — except the United States — has a form of universal health care which drives down costs in every facet of the system.

Some have argued that including U.S. prices in that comparison basket artificially drives Canadian prices higher, but Canadian prices are only one per cent above the median price in those seven countries, the PMPRB says.

And adds that prices actually dropped by 1.2 per cent in Canada in 2002. Some provinces have frozen prescription drug price increases.

Legislation introduced by then-Conservative prime minister Brian Mulroney extended patent protection for the multinational pharmaceutical companies in return for greater spending on research and development and an agreement to abide by the price regulations.

The research spending was pegged at 10 per cent of sales and manufacturers hit that level in 1993, board spokesperson Wayne Critchley says.

But Canadian research spending has now lagged behind every other nation the agency compares the country with, except Italy.

The 10 per cent figure is barely half the average 19.1, but the United States is still behind the average at 18.4, far behind Britain, Sweden and Switzerland. The Swiss industry actually spends more on research than it takes in on sales.

The American industry argues that it is funding virtually all the drug research in the world, but that argument doesn't really hold up against PMPRB studies.

Its drug industry spends $90.51 per person on research, compared to the $23.16 per person in Canada, but again, the U.S. trails other countries, particularly Switzerland in per capita research spending.

Detractors of the big drug industry, including Illinois Governor Rod Blagojevich argue that the top 10 drug companies in the U.S. spend three times more on marketing, public relations and administration than they do on research and development.

His Web site also claims that since the FDA relaxed advertising restrictions for U.S. drug manufacturers in 1997, spending on advertising jumped from $791 million to $2.5 billion annually.

More than half that figure is directed to TV ads, he says.

Meanwhile, Illinois spent $340 million last year on prescription drugs for 230,000 employees and retirees, Blagojevich says.

In a letter he sent to McClellan, he says the FDA is "giving up'' by simply telling Americans that Canadian drugs are unsafe.

"Why not work to help purchase (these drugs) and save money?'' the governor says.

"Giving up so easily fails the millions of people in my state — and the tens of millions of people across the nation — who cannot afford the prescription drugs they need.''

Now the drug companies are fighting back, announcing they will limit sales to Canada.

Ed Sagebiel, a spokesperson for Eli Lilly of Indianapolis, who announced it would reduce shipments, says the drug maker had to protect the integrity of its product and the safety of its patients.

It's not a question of profit, he says. Eli Lilly gives away $300 million worth of drugs to needy seniors each year under two separate programs, he says.

"This is a question of safety for us, just as it is for the FDA,'' he adds.

Sagebiel says the company knows the Canadian rules and plays by them, but there are "side effects'' such as a lack of innovation and long waiting times for drug approvals.

"We, as an industry, invest more than $30 billion per year in research in this country and virtually all the new drugs developed are developed in the United States,'' he says.

"There is very little medical innovation in Canada, if any. France used to be a leader in medical innovation and then they brought in price controls and now there is none.''

The huge American appetite for Canadian drugs has raised the question of shortages in Canada and pressure on prices.

Rx&D, the representative of Canada's multinational drug companies, says it has no data to indicate a change in supply and demand.

Howard of CanaRx says he has travelled Canada promoting this issue and he has seen no drug shortage.

"We are supplying drugs to people who cannot afford them over here,'' he says.

"There is no shortage of drugs in Canada. The drug companies would like that to be the fact.

"These medications are being produced for a worldwide market, so if they restrict in Canada, I think they have a huge problem,'' he says.

But Marcel Côté, a Montreal economist and a founding partner of Secor consulting, told an Ottawa audience that the "gray market'' for Canadian drugs could ultimately lead to higher prices for Canadians.

Côté released a study which was partially funded by drug maker Merck Frosst Canada.

"Either national price differentiation policy will be legally recognized,'' he says, "or price differentials will narrow.''

Given the difference in the size of the two markets, this does not bode well for Canadian consumers, he adds.

"The onus is on Canada to stop gray market sales to the U.S. Otherwise, the likelihood is for higher prices in Canada.''

FDA Commissioner McClellan raises another fear — if Canada moves to limit exports, there will be more pressure on illicit exports to fill demand, further compromising the safety of the American consumer and potentially hurting already-strained relations between the two countries.

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Risks: Big Pharma, Money influencing public decision-making, Canada, United States, 20031026 ’Buy Canada’

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