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(CBS) It may come as no surprise that the pharmaceutical industry is
the most profitable business in the country. Americans pay far more
for their prescription drugs than citizens of any place on Earth.
It will also come as no surprise that as a political issue, the high
price of drugs has united both Republicans and Democrats. More than
a million Americans now buy their medications in Canada.
And it's no longer just older people taking buses across the border.
Mayors and governors from Minnesota to Alabama are helping Americans
get Canadian drugs by mail.
Such purchases are technically illegal. So far, the government has
declined to prosecute individual customers or the cities and states
involved. But the FDA - The Food and Drug Administration - has raised
the specter of safety.
For more than a year, the FDA Commissioner, Dr. Mark McClellan, has
been waging a campaign against Canadian importation. The FDA has also
issued a serious warning that using Canadian drugs could be unsafe.
Correspondent Morley Safer reports.
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How unsafe? How common are the problems for drugs that people are buying
in Canada?
“Well, that's the problem. We don’t know,” says Dr.
McClellan. “Because we don't have the authority to tell where
these drugs have come from, or to monitor closely how they're getting
into the United States. And to make sure that the drugs that come in
are safe, it could be a widespread problem.”
“That's a lot of hooey. There is no reason that buying drugs
in Canada is any less safe than buying them in the United States,”
says Dr. Marcia Angell, who was executive editor of The New England
Journal of Medicine for 11 years. She’s currently writing a book
on the secrets of the drug industry.
“The people who say you have to worry about the safety of drugs
from Canada are imagining the way it was in the old days. That there's
a moat around the United States that drugs that are sold in the United
States are made by only American companies. And made in this country,”
says Angell.
“It's not that way anymore. Pfizer, for example, has 60 manufacturing
sites in 32 countries. So the drugs are made all over the world. They're
sold all over the world.”
Most of Pfizer's anti-cholesterol drug Lipitor is made in Ireland.
The same Lipitor that's sold in both U.S. and Canadian pharmacies. Other
familiar drugs like Zocor, Nexium, and Prevacid are the same as the
ones sold in Canada. They're much cheaper there because the drug companies
must abide by Canadian government price controls.
Do the drug companies still make a profit?
“Oh, sure. Why else would they sell them in Canada? They're not
charities. Of course they make a profit,” says Angell.
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The United States is the only industrialized country without some form
of control on the prices of drugs. The U.S. also accounts for more than
half of the industry's profits.
In order to keep those profits up, the drug companies have joined the
FDA in trying to shut down imports from Canada, and Canadian pharmacies
are feeling the pressure. In one pharmacy just over the border, Americans
account for 30 percent of its business. They were nervous about having
60 Minutes mention the actual name of the pharmacy.
“We've had several letters from the big multi-nationals, certainly
threatening to cut off the drug supply very explicitly if you are supplying
medications to U.S. patients,” says the pharmacist.
This pharmacy supplies drugs to municipal workers in the city of Springfield,
Mass., through a program set up by former Springfield Mayor Michael
Albano.
“Major pharmaceutical companies are saying, ‘We're going
to limit our supply.’ What does that tell you? It tells you that
they want to keep the artificially high prices in America,” says
Albano. “How brazen is that? It just boggles my mind that they
can get away with this.”
When Albano was faced with a budget crunch last year, he had to lay
off firefighters, police officers, and teachers. By arranging for 3,000
city employees, retirees, and family members to buy Canadian drugs,
the city can make substantial savings.
“We can save anywhere from $4 to $9 million on an annual basis
if I get everybody enrolled and everybody goes to Canada. And that's
a huge amount of money right now,” says Albano. “If I can
save $9 million for my city and put it back, redirect it back into police
and fire and to public education, it'll make a world of difference.
So it's a huge savings.”
Does he do it himself?
“I do it for my family's use. My son Mikey is diabetic. And we
get his insulin and related products for diabetes from Canada,”
says Albano, who saves that saves his family $250 a year because there
is no co-payment. “And it’ll save the taxpayers who front
76 percent of the payment about $850 a year. So it's a rather substantial
savings for my family and for the taxpayers of Springfield.”
The FDA says importing drugs from Canada or buying drugs from Canada
is unsafe. Does Albano agree?
“The American public is not buying that safety issue. The fact
is that it is getting insulting for the FDA to say that. I view myself
as a responsible father,” says Albano. “And I could tell
you that I would not let my son inject insulin into his body three times
a day if I thought there was a safety factor here.”
Mayor Albano concedes that casually buying drugs on the Internet could
be risky, but says it was quite simple for him to check out his Canadian
supplier, and challenges the FDA to do the same thing.
“The FDA has become a pawn of the pharmaceutical industry, that
they are protecting those high profit margins. If the FDA wanted to
put a plan together similar to what we're doing in Springfield, that
would be good for all Americans, they can do it in 15 minutes, relative
to safety,” says Albano.
“We get all our medications from certified, regulated pharmacies
in Canada. It's no different than going to your neighborhood pharmacy.
And it's the exact same medication.”
So why can’t the FDA insure the safety of products from Canadian
pharmaceutical exporters – and make sure that it’s as safe
as any product leaving an American company?
“Under current law, we don't have the authority to insure the
safety of foreign produced, foreign distributed drugs,” says McClellan.
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So what would motivate the FDA, which is not in the business of profiting
from drugs, to put out an alarm about Canadian drugs?
“The influence of the pharmaceutical industry on our government
is huge. And the FDA is a part of the executive branch of the government.
And this is just the propaganda that's put out to do the drug company's
bidding, to make sure that Americans don't have access to cheaper drugs,”
says Angell.
“Because then they'll come to know what's going on. And what's
going on is that these drugs, while they're made by global companies
all over the world, are sold in this country for about double what they're
sold for everywhere else. And that they wanna keep secret.”
“Our interest is in protecting and promoting the health of the
public,” says McClellan.
Of course, the whole controversy over Canadian drugs would be moot
if Republican Congressman Dan Burton of Indiana had his way. During
the recent debate over the Medicare bill, he co-sponsored a provision
that would have legalized bringing in Canadian drugs with safeguards.
But Burton says he ran into two brick walls: the drug industry and
the U.S. government: “This is a perfect example, in my opinion,
of where a special interest, the pharmaceutical industry, has been able
to manipulate the Congress and the government of the United States to
their benefit, and to the detriment of the American taxpayer and the
American people.”
Since 1999, the drug industry has given more than 45 million dollars
in political contributions, and it's spent hundreds of millions more
on an army of more than 600 lobbyists to work its will on Capitol Hill.
Congressman Burton says the new Medicare act makes it clear the industry
got its money's worth. He says billions of dollars are in it for drug
companies in this new Medicare Prescription Drug Benefit.
“In the new Medicare Act, the federal government is specifically
prohibited from negotiating prices with drug companies,” says
Safer.
“That is unconscionable. The government of the United States
negotiates prices in the Defense Department, in every area of government,”
says Burton. “And here we are, going to spend billions and billions
and billions and probably trillions of dollars on pharmaceutical products.
And we cannot negotiate the prices with the pharmaceutical industry.
That's just not right.”
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In December, surrounded by members of Congress, President Bush signed
the new Medicare act. Since 1999, these legislators have accepted more
than a million and a half dollars in campaign contributions from people
working in the pharmaceutical industry. President Bush alone has received
more than half a million dollars.
But now, the new Medicare prescription drug benefit is being billed
as a big victory for America’s seniors.
“You gotta be kidding me,” says Burton. “Seniors,
when they find out what's in that bill, are gonna be very angry. The
problem is, they're not gonna find out about it until after this next
election.”
The plan doesn’t start until 2006. Does Burton think that will
reduce the attraction of importing drugs from Canada?
“Oh, I don't think so,” says Burton. “Because even
when you talk about the discount cards and the other things, you're
gonna find that seniors are gonna be paying, in many cases, more than
they are paying for Canadian imports right now.”
60 Minutes contacted Bristol-Myers Squibb, Pfizer, Merck, Wyeth, Glaxo
SmithKline, and Eli Lilly. None of them would agree to be interviewed.
Safer asked Dr. Angell about the case the industry invariably makes
to justify drug prices.
“This is a kind of blackmail. What they're saying is, ‘Don't
mess with us. Let us charge whatever we want for our drugs. Otherwise,
you won't get the miracles,’” says Angell. “And the
truth is that they spend less in R&D then they make in profits.
And far less then they spend on marketing. And they don't make that
many miracles in the first place … The problem is, is that we're
no longer getting our money's worth.”
Adds Albano: “The pharmaceutical industry is gouging the American
consumer. There's no other conclusion one can draw. And why should we,
in this country, have to pay the highest prices in the world? Why isn't
the president doing something? Why isn't Congress doing something? Someone
has to wage this battle. So we're prepared to do it here.”
Political pressure is building. Congress now plans to reconsider legislation
that would legalize Canadian drugs. As for Dr. Mark McClellan, he is
leaving the FDA and becoming President Bush's new head of Medicare and
Medicaid.
... When he developed lung cancer in 1991, she stopped
working to care for him until he died. She has lived in the same house
since she was 1 year old. She seldom buys anything for herself, reuses
already reused sewing material and carefully budgets her food money.
"You plan out what you can afford," she says.
What has turned Clark into a renegade bargain hunter is the price of
her medications. Like many other elderly people, she takes multiple
prescription drugs for several conditions, including high blood pressure,
elevated cholesterol and glaucoma. To make the money stretch, she joins
other seniors in her state on overnight bus trips to St. Stephen, N.B.,
just across the border from Calais, Maine. On average, name-brand prescription
drugs in Canada cost an estimated 40% less than they do in the U.S.
On a trip last November, Clark did even better than that, buying a six-month
supply of medications for a little more than $1,000, a cache that she
estimates would have cost about $3,000 in Maine for the same drugs.
One of them is Lipitor, the expensive, heavily marketed cholesterol-lowering
drug developed by Pfizer. "Lipitor is my biggest savings,"
Clark says. "For a six-month supply, it's $1,900 in the U.S. I
paid $500 [in Canada]." At U.S. prices, she couldn't afford her
total drug bill and would have to pick and choose which conditions to
treat.
Yet what Clark and others are doing is technically illegal, since the
U.S. forbids the import of prescription drugs by anyone other than the
original U.S. manufacturer, and even then only when the drugs meet all
the approval requirements of the U.S. Food and Drug Administration (FDA).
The FDA contends it is looking out for consumer safety, but in fact
a growing volume of prescription drugs sold in the U.S. is made overseas
and brought in by domestic manufacturers. What's really being protected,
critics say, is the pharmaceutical industry. It has a powerful partner
in the FDA, which over the past year has conducted widely publicized
seizures of prescription drugs shipped into the U.S. from Canada, Mexico
and elsewhere that it maintains could be harmful to consumers. The most
recent disclosure came last week, when the FDA revealed a blitz inspection
of medicine being imported from Canada that turned up five packages
of an asthma medication, Serevent, that had been recalled in Canada
because of a manufacturing defect.
While there is no doubt that counterfeit and adulterated medicines—some
potentially injurious, possibly even lethal—are sold over the Internet
by unscrupulous vendors, a TIME investigation suggests the FDA's actions
against Canadian imports have been part of a concerted campaign to simultaneously
discredit its counterpart agency in Canada, provoke fear among American
consumers who buy their drugs there, blunt an exploding political movement
among local and state governments to begin wholesale drug buys in Canada
and ultimately preserve the inflated prices charged U.S. consumers and
taxpayers.
Canadian Prescription Drug Bargains Could
Be Tougher To Find
May 28, 2003
By April Zepeda
Now, the U.S. is siding with drug companies to make
it harder for Americans to buy Canadian drugs. Watch Video Video requires
the use of the free QuickTime Player. Tools Email This Story Printer-friendly
Version BELLINGHAM - The big Canadian bargain on prescription drugs
may be in more jeopardy.qNow, the U.S. is siding with drug
companies to make it harder for Americans to buy Canadian drugs.
The feds insist "consumers who go to other countries
can not be sure of buying a safe drug."
The FDA has already shut down one Arkansas company,
leaving patients here to wonder how much longer they'll have access
to low Canadian prices.
"Yes, I mean I've been so happy with this and
have saved a lot of money. I want it to continue," said Carol Ghio.
Ghio gets her asthma prescription for half the cost through a Bellingham
company, Can Drug USA. It helps Americans get cheaper prescriptions
from Canada through the mail.
"There is no reason why American consumers
should pay twice as much as Canadians do, said owner, Chelle Davidson.
Can Drug hopes consumer outrage will keep it in business. "There's definitely
been a backlash against the pharmaceutical companies, their headquarters
have been picketed, people have said, 'Then we refuse to buy your other
products,' " said Davidson. But in just the past three months, the number
of new patients ordering Canadian drugs over the Internet has dropped
25 percent as anxiety builds over the crackdown builds. The FDA says
it will "warn" consumers not to buy Canadian drugs but has no plans
to go after patients.
Can Drug USA is still getting 500 new patients
a month, and says it has no intention of slowing down.
Can Drug can
be reached at (888)-488-3784.
Mail-order Medicine
Bellingham Company lets U.S. residents buy less expensive prescriptions
from Canada
Bruce and Carolyn Galloway took their first run at buying cheaper Canadian
prescription drugs a month ago-without taking a single step north of
the border.
The Lynden-area retirees are using CanDrug USA, a new Bellingham business
that fills prescriptions by mail for local residents trying to avoid
escalating US drug prices-some of whom are self-rationing drugs or simply
going without them.
Patients get forms from CanDrug USA and fill them in, obtain their
prescriptions from their doctor(s) and then fax or mail them to the
pharmacy in Canada. The pharmacy processes the order, sends the drugs
and bills the customer's credit card. U.S. law allows Americans to bring
legal drugs that are not classified as controlled substances into the
country for personal use, generally considered a 90-day supply.
The Galloways bought three months' worth of prescriptions that Carolyn
uses for asthma and Bruce needs for heart problems, high blood pressure,
diabetes and controlling his cholesterol level.
Because of lower prices and favorable exchange rates, Bruce Galloway
said he figures their bill from CanDrug USA was $800 less than what
it would cost at a U.S. pharmacy.
"I have diabetes, and I have also had a heart bypass," said
the 69-year old former YMCA administrator. "I Have back problems.
I have had five back surgeries. I was going to the poor house in a hurry
purchasing drugs through this country."
The couple was getting drugs through a U.S.-based internet business,
but it wasn't nearly as cheap as CanDrug USA, which provides many of
the same drugs at lower prices, he said.
An example: a diabetes drug called metformin-also known as Glucophage-costs
Galloway $56 through the Surrey, B.C. pharmacy used by CanDrug USA.
In the U.S., Glucophage costs $171 for the same three-month supply from
Internet seller drugstore.com.
"It's a very significant amount when you figure what you are spending,"
said Galloway, who got wind of the fledgling business through friends.
"That (Canadian price) relieves some of the pressures."
Prescriptions Worldwide
CanDrug USA's partners are banking on seniors without prescription benefits
like the Galloways and a growing uninsured population to add to the
500 clients it has garnered since it started taking orders in December.
Americans who need only a few prescriptions might balk at purchasing
cheaper Canadian drugs, but older Americans and others with chronic
health problems that require several drugs can reap significant savings
because Canada has both price controls and a liberal generic-drug industry.
An estimated one million Americans are using Canada to buy prescription
drugs, said Bellingham resident Larry Thompson, one of the four partners
who started the business with $25,000 start-up money.
People also are obtaining prescriptions from Mexico, New Zealand, Australia
and Switzerland, he said.
"We're getting an increased amount of trade-not just in pharmaceuticals,
but everything," said Thompson, a former administrator of Group
Health Cooperative's Bellingham office. "We're becoming more and
more of a global society and these borders are beginning to disappear."
The company is marketing itself as a local alternative to big Internet
pharmacies and businesses with storefronts in British Columbia and other
Canadian provinces.
Targeted Marketing
CanDrug USA says it's filling a niche market, especially for local residents
who want to know they are calling a local phone number and can visit
the company's office near Barkley Village, said Chelle Davidson, one
of the company's founding partners.
The company makes its money from a mark-up of the drugs. There is no
direct doctor or transaction fees and a $19 fee for shipping, regardless
of how many prescriptions are mailed or where to in the U.S., she said.
The partners are going to senior retirement centers, marketing to doctors'
groups in Whatcom County as well as San Juan County, Davidson said.
The challenge is making sure people know that this is available, is
safe, and saves money, she said.
Company officials hope to have between 2,000 and 3,000 clients by next
year. They say about 15% of the more than 170,000 people in Whatcom
County don't have prescription benefits, and most of those are seniors.
The market is not only internet driven, since the vast majority of
people calling the business' toll-free number, Davidson said.
"We do not envision ourselves as an Internet pharmacy," Davidson
said. "We do have one-on-one contact with patients."
"We are not a Wal-Mart, she added. "We are a small business
and we have a small niche. We are looking at a certain segment of the
community. This gives people an option that have no options."
Drug Company Backlash
Pharmacists in Surrey say they hooked up with the Bellingham partners
because of their marketing skills, said Nav Baines, a CanDrug pharmacist
who fills the prescriptions for the Americans.
"The whole mail thing allowed us to explore an avenue that really
hasn't been touched on in smaller communities," said Baines, whose
business has formed a relationship with a local doctor to review the
prescriptions being sent in by the patients.
Resistance to the mail-order business prompted drug giant GlaxoSmithKline-makers
of allergy medicine Flonase and anti-depressant Paxil, among others-to
announce it would no longer supply drugs to Canadian distributors who
sell to Americans over the internet or by mail.
That has prompted a backlash among American consumers who have urged
a boycott of the company's products, which include everything from toothpaste
and the antacid Tums, and are finding alternatives for the prescription
drugs.
Company officials say they are worried about the integrity of the product
when it is shipped to the U.S. from Canada. Critics believe the company
is simply trying to protect its huge market share.
Until there is some kind of comprehensive federal Medicare package
that includes a drug benefit, people are going to look at Canada for
relief, Baines said.
And until there is parity in drug prices among the United States, Canada
and Mexico, the going will get tougher for American pharmacists, said
Mike Hoagland, a longtime Bellingham pharmacist.
"That's where the monster has been created," said Hoagland,
who calls the problem "multi-tiered."
"If everybody paid the same for the prescription, we wouldn't
have cross-border prescriptions," he added.
But Hoagland doesn't blame the seniors and others who are looking for
cheaper alternatives for a product that he's locked into a price to
offering, he said.
"Oh, I am not going to say you can't do that," he said. "
I am not going to be cast in that light. I'm here to do the best service
I can. I someone can do it cheaper, that's just the way it is."
A huge savings
For Bruce Galloway, the estimated $800 he saves every three months through
CanDrug USA translated to $3200 a year-a significant savings that can't
be ignored, especially since the drugs are sent to his home.
"That is an impact on our income that is tremendous," he
said. "We have not gotten to the point of not taking medicine and
paying other bills, but there are other folks out there like that."
It's the kind of money Galloway and his wife could have used for air
fare to visit their son in San Diego, before he left for duty as a soldier
in the Persian Gulf, he said. The Galloways have cut down on comforts
like dining out because of their fixed income, he said.
The fact that his experience at CanDrug USA was pleasant also helped,
Galloway said. He and his wife went to the business office to get the
necessary documents to send up the pharmacy and were treated with professionalism,
he said. They could have stayed home and received the forms by mail,
as well.
"This is something that has been going on for some time on the
southern borders," he said. "This isn't something that is
too new."
"If these folks (drug manufacturers) would be just a little more
realistic in their prices, we wouldn't have this happening. If the Canadian
government sells them at these prices, why can't we do this?"
CanDrug USA is Affordable Lifeline
A new Bellingham-based business is finding a way to help American citizens
beat the battle of prescription drug costs and do so safely.
With no relief on the horizon in Congress and zero hope that pharmaceutical
companies will see the light and begin selling drugs to American pharmacists
at the same lower prices Canadian pharmacists seek this service will
be a real savings and a real savior.
CanDrug USA opened in December as a locally based mail-order business
supplying U.S. residents with drugs at Canadian prices. Unlike the Internet
spam ads that are difficult to trust, CanDrug USA has an office in Bellingham
and is owned by local residents. Clients get their prescriptions from
their doctor, fill out a brief patient information form provided by
CanDrug USA that can be sent right to their homes and then send them
to the pharmacy in Canada where the orders are processed and shipped
right to the person's home. Since it opened in December, it is saving
people literally hundreds even thousands of dollars. It's also perfectly
legal, which cannot be said of some internet sales.
Canada isn't the only source of cheaper prescription
medications. People who live in the Southwest often cross the border
into Mexico to cash in on cheaper drugs there. The problem of expensive
drugs exists all over the country, but people in Whatcom county are
just geographically blessed to be so near the border they can drive
across if they need to.
With an increase in the population of seniors on fixed
incomes promising to grow, the problems of prescription drug coverage
will, too. For some families, they forego heating their homes or even
eating meals just so they can still buy their life-sustaining blood-pressure
medicine.
Any health care expert will tell you that we are no longer facing a
health care crisis, we're in one. Expensive prescriptions is just one
of many problems with the system, but it's a serious one. For some people,
a relatively simple prescription can mean the difference between independence
and institution-or life and death. Our medicines have advanced, but
our system of health care delivery has not. People who today are in
their 20s and 30s can't even expect to have Medicare by the time they
reach their golden years. And people now in their golden years are finding
their lifetime of contributions to the system isn't giving back very
much.
In Whatcom County, it's become difficult to find doctors
who will accept new Medicare patients. Some doctors have created a system
called Simple care to try to get around the hassle of dealing with low
reimbursement rates. Patients pay a fee each time they see the doctor,
cutting out the paperwork of insurance companies or Medicare. This type
of alternative and the alternative offered by this new business are
small, locally centered steps, but they can significantly impact the
quality of people's lives.
Canadian prices, Bellingham convenience
New company saves border crossings
by Christopher Key
High prescription prices are driving Americans to
purchase Canadian from Canadian pharmacies, according to Chelle Davidson
of CanDrug.
Exorbitant prices for prescription drugs have forced seniors, the chronically
ill, and those without insurance to make some difficult choices. Sometimes
it comes down to paying for medicine or putting food on the table. Many
people, especially in this area, have been going to Canada, where drug
prices are controlled, to purchase prescriptions. No need to explain
how big a hassle that can be.
Enter a new company called CanDrug USA. The company partners a Canadian
pharmacy with a local marketing firm to enable local consumers to purchase
at Canadian prices without ever leaving Bellingham. There are two ways
to take advantage of this system.
You can download patient and prescription information
forms from the website, http://www.candrug.com,
or call a toll free number for information and price quotes. Once you
have filled out the forms, fax them to another toll free number. The
Canadian pharmacy and physician staff will review your information and
contact you to complete a brief medical history and confirm medications.
Your order will arrive in seven to ten days.
Comparing the prices of several drugs at four local pharmacies and Drugstore.com,
CanDrug can save you from 62 to 119 percent. Such Internet pharmacies
started in Manitoba where busloads of seniors were regularly heading
north to save money. The Canadian firms wanted to make it easier.
East-West Consulting, the company's marketing arm, wants to work with
local physicians and health care groups to raise awareness of the program.
The Food and Drug Administration (FDA) has already issued a statement
saying it won't interfere with such businesses. However at least one
major pharmaceutical company issued, then withdrew, threats against
Canadian pharmacies selling to Americans. It was alarming enough that
Canadian pharmacies formed a coalition to counter the threats.
"Look at the huge number of Americans without prescription drug
coverage," said Chelle Davidson of East-West Consulting. "They
aren't going to take their meds if it means they can't put food on the
table."
Davidson says the big drug chains are probably concerned, but CanDrug
hasn't received any flak from them so far.
"One of our strong selling points is that we're local," Davidson
said. We're not just some anonymous presence in cyberspace. It's simply
about helping patients get affordable medications. Some pharmaceutical
firms have been using scare tactics claiming Canada cannot guarantee
the purity of drugs. That's nonsense. There is no difference in quality
between Canadian and American drugs."
Drug patents expire more quickly in Canada and generic drugs are available
much sooner. That is a factor in keeping prices down. Add in the favorable
exchange rate, and you're looking at serious savings.
It seems to be catching on. The company has doubled its business since
it opened last July and has attracted customers from as far away as South
Carolina. One big difference between CanDrug and other Internet firms
is that they can deliver in about one third the time and there is a flat
shipping and handling fee regardless of the size of the order.
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