FREEPORT, Bahamas – (KRT) – On an island used by bootleggers in the 1920s and speedboat-running cocaine cowboys in the 1980s, a drab warehouse now conducts a new kind of enterprise American authorities consider illegal – selling prescription drugs.
The warehouse near the Freeport airport is run by a Canadian pharmacy, CanadaRX.net. It buys prescription drugs from wholesalers in Europe and elsewhere. It sells them to Americans at prices generally 30 to 50 percent lower than they can get in the United States.
Harvey Organ, co-owner of CanadaRX, says he was forced to set up the Freeport operation because the major American drug manufacturers, led by Pfizer, have reduced shipments to Canada to block pharmacies there from selling drugs to U.S. citizens.
“This is a conspiracy of the highest order,” Organ says.
CanadaRX’s Freeport warehouse is the latest maneuver in the ongoing war between Canadian pharmacies and drug manufacturers over whether Americans should be allowed to purchase lower-cost Canadian medicines.
Their supplies cut off at home, pharmacies seeking cross-border business are now looking to other countries for product. Since Canadian law prohibits them from importing drugs simply to export, they are arranging for drugs to be shipped directly to U.S. customers from Europe and elsewhere, including the Fiji Islands. Organ’s CanadaRX seems to be the first to have set up a complete operation in a third country.
The Food and Drug Administration, which has consistently opposed Americans’ buying drugs abroad, believes this latest move to be particularly dangerous.
“They used to say they were regulated by Canadian authorities, which was as good as being regulated by U.S. authorities, but that’s not true now,” says William Hubbard, an FDA associate commissioner. “When you get drugs from unknown origins, you have reason to wonder.”
CanadaRX lawyers, meanwhile, have invited the FDA to visit the Freeport facility and see for themselves how it works.
“We can’t do that,” Hubbard says. “The drugs there aren’t legal in this country, and we don’t regulate drugstores.”
One person who did visit the operation was Lee Graczyk, an official with the Minnesota Senior Federation, which endorses CanadaRX and has about 6,000 members using the pharmacy.
“I think it was very professional,” Graczyk says. “It would match up against any facility here.”
Last week, a Herald reporter became the first journalist to visit CanadaRX’s Freeport center, where he was shown around by Anne Matsumoto-O’Brien, a veteran Canadian pharmacist supervising a staff of six Bahamians, including two pharmacists.
CanadaRX pharmacists process about 300 orders a day. The system starts with U.S. customers and their physicians submitting prescriptions to CanadaRX’s headquarters in Hamilton, Ontario. The forms are then forwarded to Freeport.
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The drugs come from wholesalers, mostly in Europe. Organ says he does not want to provide their names out of fear that the drug manufacturers would stop their supplies.
CanadaRX deals only with sealed bottles and boxes, mostly 90-day supplies kept in a large storeroom. The labeling of many bottles indicates they were intended for the United Kingdom. The label on a bottle of Flomax, used to shrink enlarged prostates, showed it was manufactured in Japan and intended for customers in Canada.
Lipitor is the operation’s most popular order. No. 2 is Fosamax, for osteoporosis.
The operation will not sell refrigerated drugs, injectables or controlled substances, Organ says. He also avoids Viagra because it is commonly counterfeited.
Matsumoto-O’Brien and the two Bahamian pharmacists fill orders only with sealed bottles and boxes. No pills are counted by hand. The orders are sent to customers through the postal system.
The process is not fast. U.S. customers are warned that it could take a month to fill an order.
Originally, the plan was to use Federal Express to ship directly from the Bahamas to the United States. But in July about 400 packages from the Freeport operation were seized by U.S. Customs in Miami, apparently after FedEx alerted Customs they contained suspicious substances.
The FDA examined the seized packages and reported on its Web site “about half” of the orders were “foreign generic drugs or drugs for which there were generic versions available in the United States.” U.S. customers could have saved considerably by buying in the United States.
Organ disputes that, saying he thinks occasionally a generic he sells might be found cheaper in the United States, “like at some Wal-Mart on sale,” but “many customers aren’t near a place where they can get that price.” He adds U.S. physicians sometimes demand brand names even when generics are available.
Graczyk, of the Minnesota Senior Federation, which has thousands using CanadaRX, says he has never received any complaints about the service.
On Oct. 7, the FDA faxed copies of several stories from Canadian newspapers in 1997 and 1998 concerning the charging of Organ and another man in a drug-pricing scheme.
The first reports alleged the pair, operating a wholesale distribution firm, took drugs from poor countries and sold them for profit on the Canadian market.
The next year, criminal charges were dropped and Organ paid a fine of about $200,000 for violating provincial drug-pricing laws.
“It was only a pricing issue,” Organ says. “It was civil, not criminal. So I paid a fine, and that was it.”
He says he maintains his pharmacy license and no questions were ever raised about the quality of the drugs he sells.
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In recent days, the FDA has fired off letters about CanadaRX to senators who support the Canadian connection, calling its drugs unreliable.
Organ says that is nonsense. He points out all the Lipitor in the world comes off a Pfizer assembly line in Dublin.
“They have FDA inspectors there,” he says. “It’s the same stuff, going to different countries.”
“The bottom line,” says Peter Wyckoff of the Minnesota Senior Federation, “is that the FDA is trying to stop Americans from getting drugs that are affordable.”
Still, he added, the allegations against Organ in the 1990s “give us pause” and the federation may rethink its relationship with CanadaRX.
“But,” he says, “we’ve received letters from a dozen other companies, in Canada and Europe, that would like to have our business.”
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BY JOHN DORSCHNER
Knight Ridder Newspapers
οΎ© 2004, The Miami Herald.
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