CALGARY, Alberta (AP) -- A few months ago, Dave Robertson had eight employees in the 800-square-foot office of his new Internet pharmacy business.
Today, Robertson's crossborderpharmacy.com has 150 workers and 20,000 square feet of office space, serving an ever-expanding customer base that he says now numbers close to 100,000 -- almost all of them U.S. consumers seeking cheaper Canadian medicine.
Scores of new, rapidly growing Canadian operations are filling prescriptions sent from south of the border, capitalizing on the disparity of drug prices between the North American neighbors.
Proliferation of Net Pharmacies Creates Worry
The business worries pharmaceutical giants like GlaxoSmithKline Inc., which wants to shut down operations like Robertson's. Drug makers, as well as regulators, say they worry about the proper medical supervision and quality controls.
Canada regulates drug prices as part of its national health-care system, while the market dictates pricing in the United States. Many popular medications for chronic conditions such as high blood pressure and high cholesterol can be bought in Canada at less than half the U.S. price.
Rough estimates put the number of Canadian companies in the business at 80 or more, and total annual revenues are believed to be as high as $650 million. Precise figures are unavailable because the companies are privately held and the situation changes daily.
Just ask Robertson, 39, a pharmacist who designed industry software until realizing the potential of reaching a U.S. market of aging citizens with diminishing medical insurance benefits and coverage.
He started crossborderpharmacy.com last fall in Calgary, and it has quickly blossomed into separate departments for receiving telephone and Internet queries, filing information, consulting with U.S. physicians and patients, and filling and shipping the orders.
One 50-by-30-foot room used to hold most of the administrative departments. Soon it will become an addition to the dispensary, where pharmacists and their technicians fill orders in plastic bags for shipment to the United States.
"Basically we cut a hole and move a wall and we have another dispensary," Robertson said. "It's an evolution. It's a never-ending process."
He might as well have been talking about the entire industry, which has taken the traditional mail-order system of delivering medicine to rural areas and applied it to a much more lucrative cross-border business.
Lower Canadian drug prices have attracted U.S. customers for years, with busloads of senior citizens from communities near the border making weekend trips to Canada to stock up.
Manitoba pharmacists were the first to market by Internet, extending service far beyond bordering states. Ronald Guse, registrar of the Manitoba Pharmaceutical Association that regulates the province's pharmacies, said Wednesday the latest figures indicate about 40 such operations there.
The flow of drugs to the United States is raising the potential for problems in supply to Canadians, Guse said. A rural hospital lost its longtime pharmacist to one of the new operations, creating a vacancy difficult to fill due to a nationwide shortage of pharmacists, he said.
Guse's association is studying possible guidelines for prescriptions to make sure they are professionally valid under Canadian regulations.
The Canadian companies generally have Canadian-licensed doctors who rewrite U.S. prescriptions submitted by American patients, satisfying regulatory requirements in most provinces for a Canadian prescription.
Some provinces, including Manitoba, require doctors writing prescriptions to personally consult with patients, and Guse questioned how that can be done by a physician handling hundreds of prescriptions a day.
At crossborderpharmacy.com, there are five or more pharmacists on duty at any time to oversee prescription validation and order filling, and the company attempts to contact every customer by phone, Robertson said.
"We require a U.S. prescription; we do have the U.S. prescription reviewed by a Canadian physician to have it rewritten, but you cannot purchase medication here without having a primary-care U.S. physician," he said.
GlaxoSmithKline, citing concerns about proper medical supervision, has told the Canadian wholesalers and retailers it supplies that they must provide assurances they are not selling drugs to the United States. If they don't, Glaxo will stop supplying them.
It originally set a Jan. 21 deadline for complying but backed off Tuesday, saying it was working on a plan to ensure that its customers still get enough drugs for Canadian consumers.
In response, Canadian pharmacies have banded together in associations and threatened lawsuits alleging unfair practices and trade violations. They say the issue is not quality of care but the money that GlaxoSmithKline sees going to Canadian companies.
Dave Adams, 56, who lives in the Los Angeles area and gets his Zocor medicine for high cholesterol from crossborderpharmacy.com, is like many U.S. consumers who dismiss product safety concerns.
The Zocor he gets from Canada is made by the same company -- Merck -- that made the supplies he used to buy in California. But now he pays $256 for a 90-day supply instead of $648.
"You can say all those things you want, but my cholesterol is the same" whether the prescription is filled in the United States or Canada, he said Wednesday by telephone.
Copyright 2002. Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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