PhRMA Chokes International Trade

posted Thu, 1 Apr 2010

The Pharmaceutical Research and Manufacturers of America (PhRMA), the leading trade organization for U.S. drug companies, does not want U.S. consumers to have a choice of where they buy their drugs. To keep U.S. consumers from researching foreign markets to find safe drugs at prices as much as three or four times less than in the United States, PhRMA and its members started aggressively shutting down the drug supply to international pharmacies, disabling them from dispensing to U.S. citizens.

PhRMA engages in unethical business practices to stifle competition and save their bottom line – making more money off of unassuming American consumers. One of PhRMA’s strategies is to shut down the supply of cheaper, safe drugs to Americans from abroad. To keep U.S. consumers from researching foreign markets to find drugs at prices as much as three or four times less than in the United States, PhRMA and its members targeted international pharmacies, slapping on dispensing quotas to keep them from delivering to U.S. citizens.

In 2004, PhRMA member company Pfizer launched an aggressive campaign to cut off the supply of Pfizer drugs to international pharmacies to prevent them from getting to U.S. consumers. In a letter from Pfizer Canada dated February 2004 to a Canadian online pharmacy, Pfizer wrote:

“Your pharmacy is not in compliance with Pfizer Canada’s terms of trade, namely the selling, transferring or distributing of Pfizer products only to persons in Canada or to any person that you know, or have reasonable grounds for believing, will or may export Pfizer products out of Canada. Consequently, effective immediately, your pharmacy is no longer approved to purchase Pfizer products from Pfizer Canada’s authorized distributors.”

Pfizer expanded the scope of its choking-off-the-supply-chain campaign by changing its policy for Europe.

In a letter dated August 2004, a sales director at Pfizer Global Pharmaceuticals wrote a notice entitled “New Supply Policy for Pfizer Pharmaceutical Products” to a pharmacy in the United Kingdom introducing the new policy. The memo stated:

“In accordance with the policy Pfizer will, at its absolute discretion, make allocations of its products to customers in sufficient quantities so that demand from patients and healthcare professionals in the U.K. can be satisfied. Allocations to Pfizer’s customers will be determined fairly and objectively and the policy will be applied uniformly. Pfizer will not supply amounts that exceed allocations.”

By putting caps on drug supplies to individual countries, Pfizer pitted online pharmacies unwittingly against their own country’s citizens. Under the new policy, Pfizer threatened, online pharmacies would be shipping drugs to the United States at the expense of citizens within their own country, whose supply would be stripped. One by one, legitimate international pharmacies with unblemished safety records are getting targeted and knocked off by PhRMA. And it does not stop there. Other name brand drug manufacturers also targeted worldwide pharmacies by branding safe international drug distribution as illegal “diversion.”

In March 2008, Sanofi-aventis Canada Inc. announced an “Anti-Diversion and Anti-Counterfeiting Policy” in a letter to a Canadian pharmacy. In the letter, Sanofi-aventis states:

“Sanofi-aventis Canada Inc. has investigated and is now increasingly aware of its products being improperly diverted from Canadian patients to foreign patients….This has implications for required supply for Canadian patients and raised safety concerns for the U.S. patients receiving diverted Canadian drug products. As a result, sanofi-aventis is required to take steps to protect supply to Canadian patients and to protect the safety of all patients by implementing a system whereby such diversion is eliminated.”

What sanofi-aventis referred to as drug diversion is really another method of drug distribution. When a Canadian pharmacy receives a request to fill a prescription from a patient in the United States, the prescription is reviewed by a Canadian pharmacist.

To eliminate such a “diversion,” which endangered their skyrocketing profits, sanofi-aventis set new sales conditions. The letter states:

“Sanofi-aventis Canada Inc.’s and sanofi-aventis Pharma Inc.’s products are sold exclusively to their respective wholesalers, distributors and other authorized customers for sale in Canada. Export outside Canada is strictly prohibited.”

Sanofi-aventis claimed that differences in labeling and packaging could jeopardize American safety and lamented that the loss of the traditional patient-doctor relationship, but failed to mention the loss of profits that was its primary concern.

In the letter, sanofi-aventis quoted a study by The Fraser Institute showing that the target consumer market in the United States for Internet pharmacy sales is approximately four times the entire population of Canada. This displays a huge desire on the part of U.S. consumers to find affordable, brand name drugs. Unfortunately, the very people who have control of the situation, the drug companies, are actively working against the customers who keep them in business. Drug companies are eager to keep a strong hold on distribution channels in order to control the supply chain and maximize profits from the enormous American market. This desire, paired with their cozy relationship with U.S. regulators, makes it almost impossible for American consumers to find affordable drugs.

The slew of unethical policies introduced by PhRMA and brand name drug companies works to ensure that the big drug companies sustain their remarkable profits in the rapidly increasing U.S. market, making it harder for everyday Americans to find safe, affordable drugs.

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