The real battleground for the Medicare prescription-drug benefit may be the Internet, not the halls of Congress. Rising numbers of Americans-nobody knows precisely how many but some estimate a million or more-are going across the virtual border to Canada through the Internet to get their prescriptions filled online at Canadian pharmacies. The prices for most medications used by people on Medicare are often far cheaper at Canadian pharmacies than they are at pharmacies in the United States or through mail-order discount sources.
Technically, shopping for pharmaceuticals online is illegal. The U.S. Food and Drug Administration (PDA) says people should not buy drugs over the Internet because the agency cannot certify the safety and quality of products coming from outside the United States. But the rules are not enforced, for the same reason that the U.S. agents at the border with Canada or Mexico don't demand that grandmothers open the trunks of their cars to disclose any prescriptions filled in foreign drugstores. And elders from the United States who ride buses to and from Canada are not searched for bottles of pills, either.
The loss of U.S. business among people in border states who travel to Canada is not regarded as a market threat by the pharmaceutical industry. The Internet is something very different, however, with the potential for a major leakage of commerce into the Canadian market. The United States is the most profitable market for drug manufacturers because prices are determined without government interference. Canada, by contrast, has a system under which the government controls the prices the drug companies are permitted.
GlaxoSmithKline, one of the major drug manufacturers in the United States, recently announced it, will stop selling medications to Canadian pharmacies that ship the products in fulfillment of U.S. Internet orders. In response, a coalition of advocacy groups for elders in 18 states have picketed the GlaxoSmithKline headquarters in Philadelphia, held protest rallies and invited people to flood the e-mail inboxes of top Glaxo officials. This "Turns Down to Glaxo" boycott is aimed at curtailing the sales of such Glaxo consumer products as Turns, Aquafresh, Geritol and Polident.
The drug company says it wants to protect consumers against the dangers of importing counterfeit or diluted or otherwise spoiled medications. Advocates of online commerce with Canada say the real motivation is a fear that the firm will lose business in the United States, its best market. The pharmaceutical giant counters that it is not concerned with losing business, because Internet sales currently amount to only 1% of its sales.
Meanwhile, the cheaper prices in Canada are drawing attention from customers and entrepreneurs. In Florida, a storefront enterprise is doing a booming business with the retiree residents of the nearby condominium communities. People take their prescriptions to the store, where workers fax it to Canada with an order form. On the other end, a Canadian pharmacist reviews the prescription, fills the pill bottles and mails the packages of medications to the Florida customers.
PRESCRIPTION DRUG SALES $150 BILLION
Many Americans now regularly use the Internet to find bargains on books, air travel, consumer loans and children's toys, so it is a natural extension to think about looking there for savings on medications. People in the United States spend more than $150 billion a year filling prescriptions. …