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A Cure for Drug Running

No more trips to Canada for cheaper meds, hopes local merchant

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For George Risov, the Canadian border runs right down Murray Avenue in Squirrel Hill.


On June 23, Risov opened the first Pennsylvania outlet of Rx Depot, which fills U.S. prescriptions with Canadian drugs for people hoping to save the price of American pharmaceuticals -- and a six-hour trip north as well.


Most of Risov's initial clients were his acquaintances, but since the store began radio advertising it has filled more than $9,000 worth of prescriptions, he says.


Because the Canadian government imposes price caps on prescriptions, Canadian medications are up to 70 percent cheaper there than they are in the U.S. One hundred tablets of the antidepressant Prozac cost about $423, or $202 for the generic version, at the Squirrel Hill Rite Aid, for those without insurance. Rx Depot charges $160.97 for the Canadian equivalent.


Rx Depot's tiny Squirrel Hill business contains little more than a desk where Risov answers calls and fills out paperwork with clients, and a shelves full of computer parts that belong to A1-PC, a computer company that shares the storefront. No drugs are ever on the premises. Rx Depot places U.S. prescription orders with Canada Cares Pharmacy, located north of the border, from which it receives a 5 percent to 15 percent commission; prescriptions are shipped directly to clients' homes.


The idea is not a new one. Many Internet pharmacies already offer Canadian drugs, and some of them offer even lower prices than Rx Depot. And for more than 10 years people in need of cheaper prescription drugs have been traveling to Canada, thanks to an enforcement variance of Food and Drug Administration regulations: While it is still illegal to import drugs from a foreign country, the FDA will not bring charges against anyone importing a three-month supply of certain drugs for personal use.


"So you can drive across the border, or sit at home and be a good little boy or girl and pay the full price," says Joseph Murphy of Joseph P. Murphy and Associates, legal counsel for the Squirrel Hill store. "All we're doing is allowing people in Bethel Park to do the same thing" that those closer to the Canadian border have done for years.


Seniors, demographically the biggest consumers of prescription drugs, are usually more comfortable with a face-to-face interaction than with the Internet, Risov says   . It sounds like the perfect business: steady profits for Rx Depot and more affordable medicine for people in need. But some -- including the FDA -- claim the entire operation is illegal, and that Canadian drugs pose a significant health risk.


The FDA issued a warning letter to Rx Depot in March, stating that the corporation violates the Federal Food, Drug and Cosmetic Act by re-importing U.S.-made drugs into the country. Although many other Internet companies also violate these conditions, Rx Depot caught the FDA's attention, in part by making claims that its drugs were FDA-approved. It has since rescinded those claims.


The FDA also says that Canadian drugs may be outdated, contaminated or counterfeit, even though they are approved by the Canadian equivalent of the FDA.


Furthermore, contends Crystal Wright, spokesperson for the National Association of Chain Drug Stores, the loophole that allows the importation of drugs for personal use applies only to people with terminal illnesses buying medications not yet available in the U.S. She warns that American and Canadian versions of drugs are sometimes not identical, resulting in possible dosage miscalculations that could lead to potentially lethal complications. And some companies that import Canadian drugs -- unlike traditional pharmacies, she says -- require their clients to sign waivers releasing the importers from all liability for adverse drug reactions (Rx Depot does not use such waivers).


"The minute a patient succumbs to an unfortunate medical situation, that's when it will get the attention of the members of Congress," Wright believes. "It's horrible to say it, but a patient's demise might be the tipping point in this whole thing."


What is most immediately at risk are profits for drug companies and traditional pharmacies. Wright estimates that more than a billion dollars' worth of prescription drugs will cross the border from Canada this year. In the meantime, Congress is debating ways to lower prescription drug prices, and Rx Depot stores are spreading across the country. The company plans to open more stores in the Pittsburgh area and across the state. Although the FDA has threatened legal action, no stores have been closed since the business started in October 2001. Risov managed to get his store ready for business in only 10 days, and had his first order four minutes after he opened his phone lines.


For him, the choice is entirely clear: "Now seniors don't have to get on the bus to Canada to buy drugs or face eating dog food to pay for their prescriptions."

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