Stores Selling Drugs From Canada Thrive

Grace Hickman heard about it from her Leisure World lawn bowling club: There’s a store nearby where prescription medicine can be had at cut-rate prices.

Grace takes 10 pills a day, and her husband, Gerard, a retired restaurant owner, takes three. Their costs were so high that three months ago Grace stopped taking the pill to lower her cholesterol.

Some of their friends in the Laguna Woods retirement community buy medicine on bus trips to Mexico, but not the Hickmans, who worry about quality. As for finding better deals on the Internet, they can’t tell the difference between a hard drive and a line drive.

So they went to Rx of Canada in Laguna Hills, one of a growing number of stores around the nation that help customers who are more comfortable in a store than on the Web buy drugs inexpensively from Canada.

FDA officials say the stores are illegal. Business owners say they’re providing seniors a way to reduce their drug bills. On Friday, the FDA faxed a letter to an Arkansas affiliate of Rx of Canada, warning that it had 15 days to close or face legal action.

Rx of Canada’s Laguna Hills store is the seventh branch -- offering discounts of 20% to 80% below U.S. prices -- it has opened within two months. It is surrounded by 18,000 seniors living in Leisure World. Three weeks earlier, the company, owned by professional soccer player Joe-Max Moore, opened a store in La Mesa in San Diego County. Five more are scheduled to open today, in Woodland Hills, Colorado, Florida and Oklahoma, with still more to come.

Just as ambitious is Earle Turow, a former clothing manufacturer who owns Discount Drugs of Canada in Delray Beach, Fla. He said he has signed deals to open 40 franchises next week, 40 the week after and an additional 100 in three months, including one in Palm Springs.

The emergence of such stores is the latest way for consumers to sidestep the high cost of prescription medicines -- especially seniors, who use the most drugs and often lack insurance to pay for them.

“This is a growing phenomenon,” said David Certner, director of federal affairs for the AARP. “It will continue to grow, and from what we hear, exponentially. It’s partly a sign of the desperation of people trying to afford prescription drugs.”

The Canadian government caps drug prices, and a weak Canadian dollar also helps keep costs lower for Americans.

There are no official figures on how much Americans spend on Canadian drugs. But Rep. Bernie Sanders (I-Vt.) estimates that it is nearly $700 million, a fraction of the overall U.S. market. Sanders has sponsored legislation to lower drug prices and has helped residents of his state travel to Canada to buy medicine.

In October, UnitedHealth Group Inc., which insures nearly 100,000 people through AARP, agreed to reimburse clients for prescriptions filled abroad.

The federal Food and Drug Administration says that in all but a few cases it’s illegal to bring in prescription drugs from other countries and that there’s no guarantee the drugs are the same as those sold in the United States, even if they are manufactured by the same company. There are problems with counterfeiting and improper handling and storage of the medicine, according to the FDA.

No Charges

No one has been charged with importing prescription drugs from Canada, FDA officials say. The letter to the Arkansas store suggests that could change.

Last month, an FDA legal analysis widely circulated in the pharmaceutical and health insurance industry “put everybody on notice,” said one FDA official. “If these storefronts don’t cease and desist, they will be at risk of action from the FDA.”

Some states, such as Oklahoma and Florida, have made noises about closing the storefront operations, but none has taken action. Patricia Harris, executive director of the California Board of Pharmacy, said that the agency is studying the issue but that the FDA appears to have jurisdiction.

Drug makers and pharmacies, whose profits could suffer if the practice grows, also are concerned. British pharmaceuticals giant GlaxoSmithKline has stopped supplying Canadian pharmacies that sell to Americans.

Carl Moore, who operates Rx of Canada for his son, said lawyers have assured them they are operating legally. “Go find me customers who are unhappy with Canadian drugs,” he said. “The only people mad at us are pharmacy boards and drug companies.”

Owners of stores like Rx of Canada say they function as middlemen, agents who place orders with Canadian pharmacies. They don’t deal with habit-forming drugs or those needing refrigeration.

Drugs Come in Mail

Rx customers must bring in their prescriptions and fill out a three-page medical history. That information is faxed to a Canadian pharmacy, which then mails the drugs to the customers in 14 to 21 days. Each order includes a $15 mailing fee, no matter how many drugs the customer buys.

Rx makes its money from commissions the pharmacies pay. Carl Moore wouldn’t be specific, but said his company charges more than the 5% to 8% commission of most businesses that arrange Canadian drug sales.

“I get asked daily why are drugs so cheap in Canada,” Carl Moore said. “A better question is why are drugs so expensive in the U.S.?”

That’s the question that brought Joe-Max Moore into the business. Moore, 32, attended Mission Viejo High in Orange County and was a two-time All American striker at UCLA. He made his first appearance for the U.S. national team in 1992 and plays for the New England Revolution in Major League Soccer.

His mother, diagnosed with breast cancer about two years ago, was prescribed Tamoxifen, which she had to pay for. Joe-Max checked the Internet and discovered how much cheaper the Canadian version costs.

The cancer drug is one of the most dramatic examples of the price differences. RX sells a three-month supply for $45.37, while a local drug store chain charges $398.59, Carl Moore said.

Angry, Joe-Max and his father started a Web site, which got little business. In January, they opened their first store in Tulsa, Okla., where Carl Moore lives. They opened another in Lowell, Ark., in early February, followed by three stores in Florida and the two in California.

“I would be lying if I didn’t say I was doing this for business interests,” Joe-Max Moore said. “But it also makes me feel good to be able to help people who are having to make decisions on whether to pay their rent or their prescription bills.”

Carl Moore said pressure from the pharmaceutical companies has pushed the FDA to act, and he vowed they would stay in business. “Somebody’s got to lead this fight, and if we’re those chosen ones, so be it.”

Rx’s Laguna Hills store is run by Howard Meek, Joe-Max’s uncle. It is a spare operation, with four desks and decorated with fake plants.

Pam Moffett came into the store to find out how much it would cost to buy the cholesterol-lowering drug Lipitor. Moffett, who looks younger than her 61 years, had spent hours on the Internet but couldn’t find a better deal. Then, while shopping near the Laguna Hills storefront, the RX sign caught her eye.

Moffett is a registered nurse, but she is self-employed and has no drug coverage. She discovered that if she bought Lipitor from Canada, she would save $156 a year. “That’s enough for me to consider,” she said.

The Hickmans also walked into the Laguna Hills store for the first time -- to buy Plavix, 80-year-old Gerard’s anti-clotting drug. They ordered a 90-day supply for $187.27, well below the $300 it would cost through their HMO. It offered one solution for their substantial drug costs. Gerard had another. He pulled a lottery ticket from his shirt pocket.

“I hit this, and I won’t have to worry about it,” he said.