Posted by Sandy Donchess on January 21, 2003 at 15:00:01:
Glaxo eases threat -- for now -- to keep drugs from those that sell to U.S.
WINNIPEG (CP) -- Canadian pharmacies have received a stay of execution but not a pardon from a leading drug manufacturer that wants to shut off the flow of cheap prescriptions to the United States.
"At the end of the day, nothing has changed," said Laurie Gauthier of Calgary-based Prairie Supply Co-operative, a drug wholesaler contacted personally by GlaxoSmithKline Inc. operations director Steven Popp.
"Glaxo still does not want Canadian product winding up in American hands."
Drug wholesalers, who had been told they would be cut off themselves after Tuesday if they continued to supply pharmacies they knew were retailing to Americans, have now been told the policy is on hold.
"They tried the sledgehammer approach," Gauthier said Tuesday.
"Now they're going to try the more politically correct approach."
He said the company appears to be shifting its arguments from safety for American consumers to a guaranteed supply for Canadian consumers, even though it could easily address that issue by making more of its products.
He said he was sure the announcement that the federal Competition Bureau was looking at Glaxo's earlier move, to see if it ran afoul of Canadian legislation, had some impact.
"How could it not? Glaxo doesn't want negative press and they've been getting a fair bit of it."
Glaxo officials refused to comment directly on the about-face, other than to issue a brief written statement Tuesday.
"GlaxoSmithKline continues to speak with a number of key stakeholders regarding Internet pharmacies and their export of our medications that are approved for use only in Canada," said the statement, provided by Canadian company spokeswoman Alison Steeves.
"We are currently working on implementing a process that will allow us to maintain a continuity of supply of medicines for Canadian patients."
Gauthier and others have been skeptical all along about Glaxo's claims it is worried about the safety of products exported to the United States.
"It has nothing to do with safety, it has nothing to do with the reasons they've stated. They don't want it there because it costs money."
John Graham, who has written on drug pricing for the Vancouver-based Fraser Institute, agrees it's all about money and the failure of the United States to control soaring drug costs for seniors and the poor.
"The real goal here is to preserve the American profit margins."
Canada is a $7-billion annual market for drugs while the United States is a $145-billion market, thanks in part to much higher drug prices. Canada regulates prices; the United States does not.
Glaxo products include Zyban for people trying to quit smoking and the anti-depressant Paxil. Glaxo products represent perhaps 10 per cent of the dollar value of the cross-border trade, but the fear is if Glaxo succeeds, other manufacturers will take similar action.
Over the last decade, thanks largely to the growth of Internet sales, the cross-border trade has turned into a $1-billion pipeline.
Much of that flow is through Manitoba, which boasts about 45 of Canada's approximately 150 pharmacies selling to the United States. They take in about $400 million a year and employ about 1,000 people.
Glaxo's latest move also means a legal challenge being planned by Manitoba's Internet pharmacies is on hold, said Kris Thorkelson, a spokesman for the group.
"You can't take someone to court if they haven't done anything," he said.
He said they must now wait until Glaxo makes its next move before deciding how they will respond.
Thorkelson didn't know whether the company would attempt to impose some sort of rationing system, which was a trial balloon floated by one of the largest Canadian wholesalers in response to Glaxo's earlier threat.
As for the consultation process the company proposes, Gauthier was also skeptical.
"Who all the stakeholders are in their opinion, I'm not sure," he said.
"Perhaps the wholesalers, perhaps the pharmacies concerned, but I doubt they're in contact with the American customers, who of course would be the biggest stakeholders."