FREEPORT, Bahamas — At the back of the steel warehouse, pharmacists in lab coats are fetching bottles of prescription drugs from dimly lit shelves. They bear labels in French, Spanish and Italian. Some come from New Zealand, 8,225 miles away. Next stop: Minnesota.
The importation of drugs from abroad, which is illegal under U.S. law, is going global, and this is the newest beachhead. Increasingly stymied at home, Canadian Internet pharmacies are branching out. They are setting up operations outside of Canada to buy drugs from around the world and shipping them to U.S. consumers.
The Bahamas warehouse is operated by CanadaRx.net, a Hamilton, Ontario, company that has been running a Web site since 1998.
Exactly how many Canadian operations have set up shop elsewhere is unclear, but the Canadian International Pharmacy Association says it knows of operations similar to CanadaRx.net in St. Kitts and Barbados.
“I can get drugs from all over the world,” said Harvey Organ, a pharmacist who is president and owner of CanadaRx.net. Organ is one of the inventors of the Canadian Net pharmacy business and relishes taking on the U.S. government.
The new arrangement is a far cry from the relatively simple practice of recent years in which Canadian Internet pharmacies bought U.S. drugs and shipped them to U.S. customers.
Americans didn’t worry because the drugs were coming from the U.S.-regulated factories and were vastly cheaper than the local drugstore. But globalization raises a question for American consumers who are tempted by discounts of 20 percent to 80 percent: Is it safe?
The Bush administration is expected to release a report soon on the safety issue. The Food and Drug Administration repeatedly has said global imports increase the risk to consumers of getting counterfeit or adulterated drugs, or medicine that has been stored improperly, altering effectiveness. Although the agency has not uncovered evidence of patients being harmed by smuggled prescription drugs, some specialists agree that the risks are heightened.
Dr. Luke Sato, chief medical officer of Harvard’s Risk Management Foundation, which insures the university’s hospitals and doctors, said he would be wary about ordering drugs from overseas suppliers operating outside FDA oversight.
“I feel very uncomfortable about relying on the distributor’s word,” he said. “I would personally pay more for a medication that I know is coming from Pfizer.”
U.S. law is clear. It is illegal for consumers to import prescription drugs. In keeping with the FDA’s safety warnings, both the Bush and Clinton administrations have said the practice is unsafe. Drug companies are permitted to import medicine from licensed factories, which are inspected by the FDA. Critics say that by refusing to set up legal systems so consumers can import directly, the government is forcing them to take greater risks.
Importation advocates in the United States, including governors and members of Congress, have shrugged off warnings about ordering prescriptions from Europe and elsewhere, just as they have shrugged off repeated FDA warnings about ordering from Canada.
A bipartisan coalition of U.S. senators is sponsoring a bill to authorize consumer importation from Canada, the European Union, Japan and Australia with FDA oversight. Governors in Illinois, Wisconsin, Missouri and Kansas have established an Internet purchasing site for residents of their states that lists pharmacies in Ireland and Great Britain, not just Canada, where they can get discounts of 25 percent to 50 percent. The site was set up in defiance of the FDA, which hasn’t shut it down.
Of the 1,000 prescriptions ordered in the first six weeks through the Web site, roughly 55 percent came from pharmacies in the United Kingdom and Ireland, said Scott McKibben, a special advocate in charge of Illinois Gov. Rod Blagojevich’s initiative. Each of those pharmacies has been inspected by Illinois officials.
Hundreds of U.S. consumers continue to rely on CanadaRx.net, despite shipping methods that are designed to evade detection by U.S. authorities.
Organ declined to provide details on his shipping practices and would not allow a photographer to take pictures of packages at the warehouse for fear of tipping U.S. Customs officials to their appearance.
The Bahamas warehouse with a stock of $2 million to $3 million of pharmaceuticals sits in Freeport’s free-trade zone, just a short walk from lavishly appointed offshore banks and insurance companies. Because he is located in a free-trade zone, Organ pays no import and export tariffs on the drugs that come and go from the small airstrip north of Freeport.
He opened his Bahamian distributorship in reaction to the tactics of big manufacturers like Eli Lilly and Co. of Indianapolis, Pfizer Inc. and GlaxoSmithKline that have said they will reduce their supplies of drugs to Canadian wholesalers if necessary to thwart the flow of low-cost pharmaceuticals to Americans.
The move also allows him to circumvent Canadian laws that prohibit “trans-shipment” of drugs from other countries through Canada. And he does not need to observe rules in Ontario and other provinces that require a Canadian doctor’s signature for prescriptions.
Organ now has access to alternate sources of Lipitor, the now-questionable Celebrex, and other brand-name drugs, top sellers in America that are becoming scarce in Canada. He pledges to purchase only from Western countries with strong regulatory regimes for pharmaceuticals.
“We could become unprofessional and take Indian product and South Vietnamese product, but I couldn’t sleep at night,” he said.
Organ sent Ann Matsumoto-O’Brien, one of his Canadian pharmacists, to run the operation in Freeport. She lives in a beachfront compound with her husband, Ray, a retired pharmaceutical warehouse manager.
Most of Freeport is run by a privately held corporation, which manages all development in a 230-square-mile free-trade zone. In an interview in the corporation’s headquarters, a spokesman for the Grand Bahama Port Authority said it has spoken with U.S. officials who want the drug operations shut down.
“The Port Authority is cognizant of the concerns of U.S. authorities, and we are taking them under very careful consideration,” said the spokesman, Barry J. Malcolm.
By Christopher Rowland, The Boston Globe
