What do you think? Would a buyer rather pay $200 for a prescription of AstraZeneca's ($AZN) heartburn medicine Nexium, or $620? Seems pretty simple, but that math is at the heart of a court battle in Maine over whether governments and companies are going to buy drugs from Canadian pharmacies at lower prices than they can get in the U.S.
The state's new law allowing citizens to get drugs from Canada, the U.K., New Zealand and Australia goes into effect today, but is being opposed in court by pharmacies and some drugmakers over questions of authenticity, of course. There are "serious safety concerns," because it is hard to track the drugs and make sure they are real and safe, a Pfizer ($PFE) spokesman told The Wall Street Journal. But proponents counter that U.S. citizens in border states have been buying drugs in Canada for decades without issue. They are cheaper there because the country imposes price caps.
Safety concerns are not without some foundation. One of the largest Canadian internet pharmacies, CanadaDrugs.com, has been a target of the FDA for years. It has been tied to imports of counterfeit Avastin discovered in the U.S. last year, as well as unapproved foreign-made cancer drugs that doctors bought and used because they were cheaper.
Maine actually allowed mail prescriptions from Canada until last year, when the state's attorney general stopped the practice because the Canadian pharmacies they bought from were not state-licensed. That action came after the Maine Pharmacy Association raised a red flag when a state employee association with thousands of members contracted with CanaRx, the Journal points out. After a legislative tussle this year, that requirement was waived for accredited pharmacies in the four countries. The FDA could stop the practice but has not been active in opposing it for consumers.
Maine is a small state, so any revenue lost by drugmakers is miniscule. Still, it could set a precedent. Other states as far from Canada as Kansas reportedly have looked at the practice. "It's not a safety issue," Maine's Republican Gov. Paul LePage has said. "It's turf."
- read the Wall Street Journal story (sub. req.)