It started with modest troops of silver-haired bus-trippers crossing the border into Canada to save 30% or more on Pravachol and Prevacid. Illegal, yes, but who would begrudge Granny's trying to keep her medicines affordable? Now it's escalated into a full-scale election-year war involving people of all ages attempting to save on medicines of all kinds. Seniors groups, mayors, governors and members of Congress on both sides of the aisle are pressing to legalize what an estimated one million Americans are already doing openly -- filling millions of prescriptions a year north of the border.

Prescription meds cost far more in the U.S. than anywhere else in the world because we're the only industrialized nation that doesn't use price controls to hold down costs. Limiting drug prices in this country -- directly or by importing price-controlled medications from elsewhere -- would deprive the pharmaceutical industry of billions in profits and, drugmakers contend, stifle the costly research that spawns groundbreaking new medications.

The Pharmaceutical Research and Manufacturers of America has also long claimed that imported drugs are unsafe, even though many "U.S.-made" drugs are manufactured overseas. Although the Food and Drug Administration (FDA) has mostly ignored U.S. citizens who illegally cross the border with personal supplies of Canadian medications, it has sided with drugmakers on the safety issue. "We know there are good drugs and bad drugs in Canada, but we can't tell you which ones are which," says William Hubbard, the FDA's associate commissioner for policy and planning. "We don't have the regulatory reach."

Advocates of importation tend to dismiss the FDA's safety concerns:."The agency is doing the bidding of the administration and the bidding of the pharmaceutical industry," says David MacKay, executive director of the Canadian International Pharmacy Association (CIPA). Indeed, the FDA has sometimes overreached in its warnings about the safety of drugs that come from Canada. But as one wades into the claims and counterclaims, some of the agency's concerns deserve a closer look.

From, or through, Canada?

The drugs you buy at a corner drugstore in the U.S. are FDA-approved. That means the FDA is satisfied that the drugs work and are safe, and that the agency has approved the drugmakers' facilities and periodically inspects the plants, whether they're located here or in another country. Health Canada, the Canadian federal regulatory agency, approves and inspects drugmaking facilities much as the FDA does, and provincial pharmacy boards license and regulate pharmacies just as state pharmacy boards do in the U.S.

No Canadian pharmacy can truthfully assure you that you're getting FDA-approved drugs because any drug dispensed outside the U.S. is beyond the FDA's oversight. But Canada's regulatory system is considered comparable to ours. When you walk into a Canadian pharmacy, you can be confident you're getting drugs approved by Health Canada. But when you buy over the Internet, it's harder to be sure whom you're doing business with.

Sadly, there seem to be plenty of consumers who will order drugs off any Web site that displays a maple leaf. For about a year, the National Association of Boards of Pharmacy (NABP), an umbrella group for state pharmacy regulators, has collected complaints about drugs mail-ordered from Canada. Typical claims include orders that are paid for but never arrive, or that arrive from unexpected locations (including India and Thailand) and pills that are suspected placebos or counterfeits.

Most of the problems involve rogue Web-site operators that, despite the Canadian flag on the home page, have no connection to a licensed Canadian pharmacy. These are the same outfits that are spewing spam into our e-mail boxes to tout "Vi@gra" and "V1codin." Kiplinger's visited several of the sites that prompted complaints to the NABP, and most bore the hallmark of a dangerous drug source: the claim that a prescription from your doctor isn't required.

But the more difficult question is whether cautious consumers who take the trouble to check that they're buying from a licensed Canadian pharmacy can be sure they're getting Health Canada-approved meds. "If you walk into a Canadian pharmacy, you're going to get medication that is safe," says Carmen Catizone, executive director of the NABP. "If you order from the Internet, you have no way of knowing that's going to occur."

Catizone is opposed to importation but says he's in discussion with the National Association of Pharmacy Regulatory Authorities (the NABP's counterpart in Canada) about ways the two groups could ensure safe importation. He worries that drug wholesalers are bringing medications from third-world countries (where regulatory standards are looser and counterfeits are common) into Canada and then funneling them to pharmacies expressly for export to the U.S.

Canadian trade figures indicate that the concern may be warranted. A Prudential Financial research report last fall revealed that pharmaceutical exports to Canada were up 300% from Bulgaria, 196% from Pakistan, 171% from Argentina, 114% from South Africa and 101% from Singapore. Although those numbers are not concrete evidence of so-called transshipping, it suggests that it may be happening, says Diane Duston, the analyst who co-wrote the report.

Although it is illegal for a licensed Canadian pharmacy to export drugs that are not Health Canada-approved, it's not clear whether anyone is monitoring compliance with the law. Health Canada has said that it is the responsibility of the importing country to make sure its imports are safe.

What about the provincial regulators? "If everyone is doing what they're supposed to be doing, the products shipped to the U.S. should be Health Canada-approved," says Ronald Guse. Guse is the registrar of the Manitoba Pharmaceutical Association, which licenses pharmacies in Manitoba, where roughly half the exporting pharmacies are located. "We haven't had any information to show that products coming from Canada are not Health Canada-approved," Guse told Kiplinger's. "But I can't say all products from Canada are Health Canada-approved."

The pressure to feed the mounting demand in the U.S. for affordable drugs is especially keen now that several pharmaceutical companies, including AstraZeneca, GlaxoSmith-Kline and Pfizer, are withholding supply from Canadian pharmacies and distributors that deal primarily with U.S. customers. "We began directly notifying a group of Internet pharmacies last August that they would no longer get Pfizer products," says Pfizer spokesman Jack Cox, who adds that Canadian pharmacies are violating the terms of their contracts when they export Pfizer drugs to the U.S. (Popular Pfizer products include Celebrex for arthritis, Lipitor for high cholesterol, Norvasc for high blood pressure and Zoloft for depression.)

The crackdown has created shortages, and pharmacies that export to the U.S. are scrambling to fill orders. "What we used to locate in 15 minutes of phone calls now takes a few people all day trying to figure out supply," says Billy Shawn, president of the Canadian Drugstore. Internet pharmacies are still managing to supply their U.S. customers. Some stocked up in anticipation of being shut off, and others are quietly buying drugs from brick-and-mortar pharmacies that primarily cater to Canadians. But the pharmacy-to-pharmacy trade that keeps Internet operations in stock is now threatening to create shortages for Canadians.

Some Internet pharmacies are telling patients to ask their doctors about brand-name or generic alternatives to Pfizer products, says MacKay, CIPA's executive director. Others are beginning to steer U.S. customers to sources outside of Canada. Crossborderpharmacy.com, for example, includes a note on its home page inviting customers to "save even more on drugs from the U.K." MacKay says CIPA condones such referrals as long as the location of the source pharmacy is disclosed. And so far, at least, U.S. drugmakers apparently are not cracking down on British pharmacies that ship to the States.

Too much secrecy?

Seniors aren't the only ones looking to Canada for relief from high drug costs. Many state and city officials see cross-border pharmacies as a tempting salve for strained budgets. Last July, Springfield, Mass., became the first city to provide city employees and retirees direct access to drugs mail-ordered from Canada. In the program's first nine months, 3,500 Springfielders have enrolled, and the city says it has saved about $2 million on drugs provided to employees and their families through the city's employee health-insurance plan. If this is illegal, how does the city get away with it? The FDA issued a press release announcing that it had warned the company supplying the drugs -- CanaRx, a mail-order service based in Ontario -- that its operations violate federal law and put Americans at risk. But there has been no concerted effort to block the shipments.

Before he launched the program, Springfield's then-mayor, Michael Albano, began ordering prescription drugs for his family -- including insulin for his teenage son -- throughCanaRx. He visited several of the Canadian pharmacies that fill the prescriptions placed through CanaRx to assure himself that the meds were coming from licensed, regulated pharmacies. "If you take the time to know who you're doing business with, then there is no problem," Albano says. Burlington, Vt., and Caldwell County, N.C., now also use CanaRx to supply medications to their employees.

But not everyone is impressed with CanaRx. The FDA says that when it bought insulin undercover through CanaRx, the insulin arrived seven days later at room temperature. Insulin is generally kept refrigerated, and it can degrade if it gets warm. "We bought one drug from them, and they screwed it up," says the FDA's Hubbard.

In a letter to the FDA, CanaRx's president Anthony Howard says that the company ships insulin in cold packs and insulated packaging and that the incident is a "single episode ... that is contrary to our policies and that we cannot corroborate." But CanaRx now ships insulin by over-night delivery. Albano says that all the insulin he has received for his son has arrived in cold packs and in good condition.

There's an even more important issue. CanaRx is not itself a pharmacy. It is a middleman that takes prescription orders and relays them to a network of about 35 Canadian pharmacies, including four large Internet pharmacies. On its Web site, CanaRx does not identify any of the participating pharmacies, so it is difficult for consumers to verify for themselves that their meds are coming from a licensed Canadian pharmacy.

Howard says that his company provides Americans with nothing but Health Canada-approved drugs from licensed pharmacies in factory-sealed containers. (In a letter to the FDA that's posted on CanaRx's Web site, Howard says that all the meds that CanaRx provides come from factories the FDA has inspected -- a claim that is impossible to verify.) So why not identify the pharmacies on the Web site? "If I put their names and numbers on the screen, Pfizer would cut them off in a moment," Howard says. Probably true. But why not list the four Internet pharmacies, which are already likely to be on a drug company's blacklist? "Because of an agreement I have with them. We take the heat. We face the FDA." Howard says that customers can confirm that their meds came from a licensed pharmacy once they receive their order.

In addition to the three municipalities that his company supplies openly, Howard says several more quietly order drugs through CanaRx. "CanaRx supplies over 20 cities, counties and industries in the U.S., many of which no one knows anything about because they've chosen to be under the radar."

Pharmacy flaws

In May, Minnesota became the first state to tap Canada's drug supply for state employees, waiving co-pays for those who fill their prescriptions through a Canadian pharmacy. The state expects to save $1.4 million a year in drug costs. Minnesota governor Tim Pawlenty has also put up a Web site to steer consumers directly to selected licensed pharmacies, and others have followed suit. In December, two surveyors from the Minnesota Board of Pharmacy visited eight licensed Canadian pharmacies to help select the ones to be included on the Web site. The surveyors' report lists 32 examples of "poor pharmacy practices" they observed on their tour.

Many of the infractions were trivial, such as sending medications with the prescription labels unattached (to avoid covering up the manufacturer's label) and sending containers without child safety caps (which some people don't want or need anyway). But other shortcomings were more troubling:

At one pharmacy with an automated prescription-filling process, each pharmacist checked 100 to 300 prescriptions per hour. "We have no doubt that safety would be compromised" at that rate, the report concludes.

In one pharmacy (the only one not aware the surveyors were coming), the ratio of six technicians processing prescriptions to one pharmacist on duty far exceeded provincial standards, which would have allowed just two technicians.

Only one pharmacy had a thermometer in its refrigerator to check that labeled storage requirements were being met for refrigerated products.

The report concluded that one pharmacy, Total Care Pharmacy, in Calgary, Alberta, "far surpassed the other seven in many aspects of overall pharmacy practice." Three others "may provide acceptable pharmacy services to Minnesota residents with some modifications to their current practices." But four "would not currently provide acceptable pharmacy services to Minnesota residents." Governor Pawlenty chose to list two pharmacies on his site: Total Care and Granville Pharmacy, in Vancouver, B.C.

Substitute drugs

Patients who fill their prescriptions in Canada sometimes get drugs equivalent to, but not exactly the same as, the drugs they would get at a U.S. pharmacy. In some cases, the difference is in name only: The heartburn and acid-reflux drug called Prilosec in the U.S., for example, is called Losec in Canada, but both are the brand-name drug produced by AstraZeneca. (Prilosec was a popular export to the U.S. until it became available over the counter here last year.)

But patients sometimes receive generic equivalents, such as pravastatin for Pravachol and sertraline for Zoloft, that are not available as generics in the U.S. Such Canadian generics are Health Canada-approved but do not bear the FDA's stamp of approval. If an FDA-approved generic does exist, however, you can probably buy it cheaper at a local pharmacy than across the border.

Scare tactics

Although there are clearly reasons to be cautious about ordering drugs online from Canada, the FDA tends to overplay the dangers, which undermines the credibility of its safety warnings. In a three-day "blitz" inspection last year, the FDA intercepted 1,982 packages at mail facilities and courier hubs around the U.S. The examinations turned up 1,728 "unapproved" drugs. Unapproved includes all drugs that have been handled outsidethe FDA's regulatory system, including "foreign versions" of FDA-approved drugs, such as drugs approved by Health Canada. In testimony before Congress in March, however, FDA commissioner Mark McClellan (who now heads the Centers for Medicare and Medicaid Services) emphasized the worst offenses, such as "drugs shipped loose in sandwich bags, tissue paper or envelopes," along with controlled substances, steroids and drugs that have been withdrawn from the U.S. market.

Are those products coming from licensed Canadian pharmacies? "We don't know how much of what we see is from licensed pharmacies," says Hubbard. But packages sent from legitimate Canadian pharmacies are labeled with a pharmacy name and address. If the FDA wanted to differentiate between what was coming from legitimate pharmacies and what was coming from elsewhere, it could. The agency seems content, however, to leave the impression that the risk of ordering meds from a questionable Web site is the same as the risk of ordering from a licensed pharmacy. "I don't know if the risk of getting inferior drugs is 1% or 10% or 90%," Hubbard says, "but it's a risk, and it's not fair that senior citizens have to take it."

Those knowledgeable enough to seek out legitimate Canadian pharmacies see the risk differently. "Everything we do, including getting out of bed in the morning, entails risk," says David Funderburk, legislative counsel for the TREA Senior Citizens League. "Seniors should have the right to assume the minuscule risk of using a drug obtained from Canada rather than suffer the risk of not having the prescription drug to take at all."

The endgame

The U.S. House of Representatives has already passed legislation to legalize imports for personal use. And as we went to press in late May, there was growing pressure to try to force a Senate vote on the matter before Congress recesses for its Fourth of July break. But even if importation becomes legal, Canada isn't the answer to the larger problem of how to meet the needs of the many Americans who can't afford the drugs that have been prescribed to them. "Canada cannot just be a big drugstore for the U.S.," says David Certner, director of federal affairs for AARP. "Canada is still a small country, and it's not that difficult for the drug industry to limit supply."

The real objective, importation advocates in the States say, is to put pressure on pharmaceutical companies to lower prices in the U.S. Although the medicare prescription-drug benefit set to take effect in 2006 will help some seniors, there is little confidence it will solve the problem. "For those who can't afford drugs here, there is already a health-safety issue," says Certner. "We need to balance the FDA's concerns against the fact that hundreds of thousands, if not millions, right now are going to Canada or purchasing drugs over the Internet."

--Reporter: Amy Esbenshade

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