Pill Purveyors Run, But They Can't Hide

It seems that Pfizer will try anything to maintain its inflated American drug prices. Having been unsuccessful at putting the lid on Canadian pharmacies selling their products to Americans, they're now applying the same pressure to pharmacies in England. These guys just don't get it: the global economy is available to everyone, and it's time they got used to it. American corporations can't ship our jobs overseas and not expect our purchasing power to follow.

Drug giant targets U.K.
in battle against Net sales
Sources say firms linked to Canadian sales
By Leonard Zehr
The Globe and Mail, September 1, 2004
www.globetechnology.com

The world's biggest pharmaceutical company is taking its battle against Canada's Internet pharmacies across the pond.

In a letter dated Aug. 17, Pfizer Inc.'s British unit said it is introducing a new supply policy for its pharmaceutical products in an apparent bid, sources say, to slow the flow of lower-priced drugs to Americans from British pharmacies linked with Internet drug sites in Canada.

"Pfizer will, at its absolute discretion, make allocations of its products to customers in sufficient quantities so that demand from patients and health care professionals in the U.K. can be satisfied," sales director Philip Watts said in the letter. "Allocations to Pfizer's customers will be determined fairly and objectively, and the policy will be applied uniformly. Pfizer will not supply amounts that exceed allocations." Mr. Watts couldn't be reached for comment.

But Don Sancton, a spokesman for Pfizer's Canadian unit, said the company is taking steps in Britain, as it is in Canada, to ensure the "integrity of the pharmaceutical supply system and safety of Pfizer products" so there is an adequate supply of drugs for patients.

New York-based Pfizer didn't outline how it will allocate supplies of such top-selling drugs as Lipitor, Celebrex and Viagra to British wholesalers. But allocations don't seem to be working in Canada.

Americans spent nearly $700-million (U.S.) on drugs from Canada last year, a 68-per-cent rise from 2002, as price controls, the lower value of the Canadian dollar and the buying power of public sector drug plans keep prices 44 to 78 per cent cheaper than in the United States.

Sources have predicted that sales could reach $1-billion (U.S.) this year as more than a dozen U.S. states and cities help residents buy cheaper drugs in Canada.

A further crackdown by Pfizer earlier this year prompted Canadian mail order companies to begin sourcing drugs for their American customers from pharmacies in Britain and New Zealand, where prices in many cases are even lower than they are in Canada.

"This is an example of Pfizer trying to shut down every opportunity for Americans to buy drugs at less than U.S. prices," said Mike Hicks, chief executive officer of canadameds.com, one of Canada's top three pharmaceutical Internet sites.

"None of our British pharmacies have told us that supply is an issue so far because there's still product in the pipeline," he added.

In the Pfizer letter, Mr. Watts said orders accepted in writing by the company prior to the new allocation policy, "barring unforeseen circumstances . . . will be delivered in accordance with the agreed quantities and delivery dates."

David MacKay, executive director of the Canadian International Pharmacy Association, which represents the mail-order industry, doubts that Pfizer's allocation strategy will have great success. That's because the overseas price advantage stems from a practice in Europe known as parallel trade. It allows wholesalers and importers to search member countries of the European Union for the lowest possible priced drugs, effectively creating free trade in pharmaceuticals.

"If Pfizer locks down some wholesale product in Britain, parallel traders can access product from other wholesalers in other countries," he said. "Pfizer would have to shut down all wholesalers in 20 countries to be effective."