NEW YORK (CNN/Money) -
Eli Lilly and Co. has joined a group of U.S. drugmakers that are limiting Canadian drug sales to try to prevent them from being resold at a lower price to U.S. consumers, according to a published report.
The Indianapolis Star, based in Lilly's hometown, reported a letter dated Oct. 16 and sent to about 24 Canadian drug wholesalers in which it said it will limit sales of its drugs to amounts that Lilly estimates are enough to supply the Canadian market only.
"We think it's an appropriate step to take to protect the integrity of our products and the safety of our patients here in the U.S. and Canada," Lilly spokesman Rob Smith told the Star. He said Lilly's contracts with wholesalers in Canada don't allow exports out of Canada.
Smith told the Star Lilly officials have tracked a "steady increase" in cases of counterfeit and improperly stored Lilly products coming into the United States. Lilly's move was based on recommendations from a Lilly task force formed two years ago to study the issue of drug imports from Canada, he said.
Pfizer and Britain's GlaxoSmithKline took similar steps in Canada earlier this year, the paper reported. The drugmakers are responding to the increasing sales by Canadian mail-order pharmacies to U.S. buyers, who are expected to order up to $1 billion worth of prescription drugs from Canada this year. The Star reported Canadian-set price controls, the cheaper Canadian dollar and other factors result in a 35 to 40 percent discount for the Canadian drugs than in the U.S. market.
Daren Jorgenson, president of the Canadameds.com mail-order pharmacy, said in a statement that "Lilly has put up a smokescreen and says its actions are to protect Canadian consumers. In reality, they are meant to keep that uninsured 'grandmother' in Indianapolis from getting her more affordable medications. What a shame."
Smith said Lilly has programs in the United States to sell reduced-priced drugs to the poor and low-income senior citizens.
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