Canadian net pharmacies wait for dotcom diagnosis

Open wide and say 'Aaaaaah'

By Tim Richardson • Get more from this author

Posted in Financial News, 10th January 2005 12:13 GMT

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Canada's thriving online drugs industry could be forced to swallow a bitter pill if the Government proceeds with plans to choke the sale of prescription drugs to the US.

Last year, Some C$1bn (£435m) of prescription drugs are sold to US patients, who are keen to pocket the discounts offered by Canada's drug etailers.

But now the Canadian Government wants to curb the industry amid fears that it could lead to drug shortages in Canada and lead to higher prices. Critics says the US Government is leaning on its neighbour, under pressure from the drugs industry.

Last year the Canadian International Pharmacy Association (CIPA) warned that Canadian Internet pharmacies are being driven to "the brink of collapse" by sales restrictions imposed by major US drug manufacturers.

According to industry estimates, one million - often underinsured - Americans buy their drugs from Canada, where they are often half the price. The cross-border price war has led to an online pharmacy boom in Canada, in particular in Manitoba, where 80 of Canada's 220 online pharmacies are now located. The big drug companies are complaining that they are losing money.

As the Canadian Government prepares to publish how it plans to deal with the matter, the Financial Times today reports that Canadian dotcom drug stores are already planning what to do next. Quoting CIPA executive director David MacKay, the paper says the pharmacies would move overseas and in particular, to the UK and Europe. ®