Posted on 12/22/2002 7:27:23 PM PST by Sparta
ORLANDO, Fla. (Reuters) - A Florida company is moving the concept of ordering prescription drugs from Canada one step closer to bargain-hunting American patients by opening a series of storefronts across the Sunshine State.
Winter Springs-based GFE Inc. plans to open its Canada Rx Shop in 15 locations, allowing customers to walk in and set up their prescription drug orders through Canadian pharmacies.
Although U.S. regulators question the legality of such storefronts, no action has yet been taken against GFE.
Thousands of Americans cross the border each year or place orders via the Internet to buy medicine in Canada, where the government health system puts price caps on drugs, and a weak Canadian dollar makes them much less costly.
While technically illegal, this over-the-border trade is largely ignored by U.S. authorities apparently reluctant to prevent consumers from buying necessary medicines at significant savings.
The first Canada Rx Shop opened in Oviedo in June and others have since appeared in Orlando, Kissimmee, Sarasota, New Port Richey and Naples. More stores are expected to open by the end of the month in Sanford, Lakeland, Tarpon Springs, Boca Raton and Miami.
The marketing-based company is owned by insurance brokers Rosemarie and Hans Jenau, whose Web site, CanadaRx Shop.com, was set up earlier this year, offering cost savings of 49 to 89 percent on prescription drugs via the Internet.
On the site, the highest savings are listed for the post-operative breast cancer drug Tamoxifen -- $38.56 for 90 20-mg tablets, compared with a U.S. price of $351.91.
The arthritis drug Vioxx is listed at $107.52 for 90 25-mg tablets, with the average U.S. price at $250.17. A physician's review fee and pharmacist dispensing fee are included.
While the Web site has remained busy, the Jenaus said they were missing a key block of customers: senior citizens.
"The seniors told us they want to talk to real people," Hans Jenau said.
"Our idea was: Why deprive the majority of seniors that don't order on the Internet from the opportunity to obtain less expensive drugs in Canada?" Rosemarie Jenau said.
Their Canada Rx Shop only provides access to discounted Canadian prescription medications, they say.
"Canada Rx Shop is not a pharmacy. We do not order, receive, fill, store, disperse, charge, ship, sell or solicit any kind of medications. We are giving the benefit of personal assistance to order via the Internet," Hans Jenau said.
Storefront and Internet customers are required to fill out a confidential medical questionnaire, read and sign a power of attorney and user agreement, and provide a prescription. The information is forwarded to a Canadian doctor, who reviews the information and writes the prescription.
While the Jenaus maintain they have taken every precaution to operate legally, U.S. state and federal regulators say the company falls under laws prohibiting such activity.
Florida Board of Pharmacy executive director John Taylor cites a law that says no pharmacy, employer or employee may obtain a location other than a pharmacy, for which a permit has been issued by the Florida Board of Pharmacy, from which to solicit, accept or dispense prescriptions.
"It's a consensus of the board that this type of activity, the solicitation of prescriptions at storefronts, is not permitted under the law," Taylor said.
He said he could not confirm or deny whether any investigation was under way.
Despite the Jenaus insistence that they are only providing access to prescriptions, Edwin Bayo, a senior assistant attorney in the Florida attorney general's office said they are "in the business of pharmacy."
"They are in the business of helping people obtain medications without a license," Bayo said. The definition of a pharmacy is a "very broad definition," he said. It includes consulting, assisting, and "not just simply handling."
Bayo said the ordering of prescription medications from out of the country is a hot issue at Board of Pharmacy meetings.
"The issue is an issue that has national scope. So we are waiting and looking for the federal government to say 'Hey, you can't do this,"' Bayo said.
The Jenaus said they believe they are operating a legal business.
"The legal department of the Florida Board of Pharmacy has investigated our business, but has not taken any action," Hans Jenau said. "We have a disclaimer in every store that we do not counsel or dispense drugs."
Jenau said he has also received an official opinion from the Seminole County tax appraiser's office stating that "the Canada Rx Shop occupational license is correct and valid."
The U.S. Food and Drug Administration is not taking any action against patients receiving FDA-approved prescription medications from out of the country, but advises Americans that it is safer to buy from American pharmacies.
"It goes back to nobody wants to prevent your grandmother from getting her drugs at a more affordable cost," FDA spokeswoman Laura Bradbard said.
Hans Jenau said the Canada Rx Shop works only with Canadian pharmacies that guarantee FDA-approved drugs manufactured in the United States by American companies.
As I vaguely recall, the reason the same drugs are available in Canada at a lower price is because somehow the US taxpayers are subsidysing the American drug companies for the drugs they are forced to sell to Canada.
Therefore, by selling Canadian drugs in America, buyers are buying drugs subsidized by the US taxpayer. Sort of sliding into a National Health System for presciptions.
I would be very appreciative to anyone who heard that show, and has a better memory than mine.
In Canada, drug companies are told they can't charge more than X. But the drug companies still sell there because of the marginal profit on each pill.
Suppose you've got ABC Pharmaceuticals, and they spend $50 million to develop a new drug. Each prescription costs $5 in chemicals to make. Suppose that they believe that demand is 50,000 prescriptions per year. To get their $50 million back over 10 years, assuming no time value of money, would require $5 million in revenue per year, or $105 per prescription (since $5 per prescription would go to the actual chemicals). Now they do this, and then in Canada, with an extra 5,000 prescriptions per year, they can sell the drug too. There, the government says they can only charge $30. Well, they go for this reduced rate, because $30 is higher than $5, and they still make $25 on each prescription. Now suppose the US comes in and also imposes a cap of $30. Well, then the drug company throws in the towel. Same thing happens if so many Americans go to Canada that they cannot recoop their investment.
Price caps are horrible. They distort the market, and cause people to stop R&D and production. It's a great deal if the drug has been developed already, and you can mooch of their labors. It's a horrible deal if you have a disease for which the cure hasn't been developed yet!
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