Eli Lilly takes steps to stop drug reimportation
April 02 2004 1:00 AM ET
Drugmaker Eli Lilly has escalated its campaign to curb Canadian drug reimportation by U.S. consumers by requiring Canadian Internet pharmacies to inform Lilly of the quantities of their drugs they order from wholesalers. Noncompliance can cause such pharmaceutical Web sites be cut off from supplies. In a letter to Canadian Internet drug retailers and Lilly's authorized Canadian wholesalers, the Indianapolis-based company outlined a policy to help Lilly more closely track the flow of its drugs across the border, Lilly spokesman Ed Sagebiel said Tuesday. "Effective immediately, information regarding the volume of each of your purchase orders to all distributors of Eli Lilly Canada Inc. products is to be faxed" to Lilly's Canadian customer response center, the March 22 letter said. The letter said Lilly would then review the order within two business days and "respond in writing the result of its review of the order quantities to you and the distributor you had indicated." With clearance, the retailer could then submit purchase orders to wholesalers.
Lilly officials say the decision to step up the war against drug reimportation was made to help guarantee that enough of the company's products remain in Canada for Canadian citizens who need them. But Jeff Uhl, president of the Winnipeg-based Universaldrugstore.com, says Eli Lilly's real motive is to prevent the cheaper drugs from being sold to U.S. consumers, who would pay much more for them from U.S. pharmacies, thus generating a higher profit for the drug firms. "They're pulling out all the stops to try to avoid letting drugs get south of the border," he said. "They're coming up with an artificial shortage to scare the Canadian public to think the Internet trade is going to negatively affect Canada's supply of these drugs."
Because of Canadian price controls, medications sell in Canada for a fraction of the cost charged to U.S. consumers. Many anti-HIV medications sell in Canada for less than half the amount charged in the United States, and some other drugs are discounted by as much as 70% from their U.S. price tags. Lilly is among at least five drugmakers that have recently imposed tougher restrictions on the Canadian drug supply chain to discourage reimportation. Bush administration officials also oppose drug reimportation, claiming that there is no way to ensure that drugs shipped from Canada are safe for U.S. consumers.