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Drugmakers Take Aim At Canada
By Jeanne Lee

(MONEY Magazine) – At least one pharmaceutical giant is sick and tired of Americans filling prescriptions in Canada, where drugs can sell for 30% to 70% less. On Jan. 21, GlaxoSmithKline, the maker of antidepressant Paxil and asthma drug Advair, said it would cut shipments to Canadian wholesalers that supply pharmacies exporting to the U.S.--especially online ones--unless they guarantee that the drugs will be sold only to Canadians. Online pharmacies are still selling Glaxo drugs--for now. "Some, but not all, of our wholesalers have said they will no longer supply us," says Andy Troszok, a pharmacist at Calgary's CrossBorderPharmacy.com.

With drugmakers losing anywhere from $500 million to $1 billion a year to sales in Canada, will others start to crack down? "Fortunately neither Pfizer nor Merck has followed Glaxo's lead," says Don Bozarch, president of Canadian Meds USA, a Denver company that helps U.S. seniors order drugs from Canada. Eli Lilly has warned Canadian wholesalers that they are violating their contracts and the law but has not cut supplies. No matter what the big pharmas do, overseas prescription-drug sales are unlikely to dry up soon. Stay tuned: Congress is expected to take up cross-border sales as well as a Medicare prescription-drug benefit later this year. --JEANNE LEE