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Posted: Friday 17 December, 2004 at 8:56 AM
Christopher Rowland, The Boston Globe

    In Freeport, Bahamas, pharmacist Doriean Cooper lled prescriptions for Americans. (Globe Staff Photo / Jonathan Wiggs)

     

    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 US 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 world and shipping them to US consumers.

     

    The Bahamas warehouse is operated by CanadaRx.net, a Hamilton, Ontario, company that has been running a website 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 US government.

     

    The new arrangement is a far cry from the relatively simple practice of recent years in which Canadian Internet pharmacies bought US drugs and shipped them to US customers. Americans didn't worry because the drugs were coming from the US-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 to 80 percent: Is it safe?

     

    The Bush administration is expected to release a report as early as next week on the safety issue. The Food and Drug administration has repeatedly 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 a smuggled prescription drug, 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."

     

    US 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 previously 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 that 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 US 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 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 website, roughly 55 percent came from pharmacies in the United Kingdom and Ireland, said Scott McKibben, a special advocate in charge of Illinois Governor Rod R. Blagojevich's initiative. Each of those pharmacies has been inspected by Illinois officials.

     

    Hundreds of US consumers continue to rely on CanadaRx.net, despite shipping methods that are designed to evade detection by US authorities. Organ declined to provide details on his shipping practices and would not allow a Globe photographer to take pictures of packages at the warehouse for fear of tipping US 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's 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 Pfizer Inc. and GlaxoSmithKline that have reduced their supply of drugs to Canada 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, 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 one of his Canadian pharmacists, Ann Matsumoto-O'Brien, to Freeport to run the operation. She lives in a beachfront compound with her husband, Ray, a retired pharmaceutical warehouse manager from Ontario.

     

    Most of the city 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 had spoken with US officials who want the drug operations shut down. ''The Port Authority is cognizant of the concerns of US authorities, and we are taking them under very careful consideration," said the spokesman, Barry J. Malcolm.

     

    The US government is also taking action at home. It delivered its most crippling blow last summer when the US Customs Service, acting on a tip from Federal Express, seized 439 packages containing prescriptions in Miami. The seizure marked a new approach for the government, which has not tried to seize drugs from Canada.

     

    The FDA said some of the drugs were ''suspicious in appearance" and may not have been authentic. Without specifying, the agency said some drugs were made in Third World nations and were sold first to more developed countries before finding their way to the Bahamian warehouse for shipment to US consumers.

     

    The FDA also has sought to discredit Organ. In a letter to Representative Bernard Sanders of Vermont, a staunch advocate of prescription imports, the FDA drew attention to illegal schemes Organ participated in during the 1990s in Canada. Organ pleaded guilty in 1998 to 12 civil charges and paid fines of $300,000 for circumventing Canadian price regulations for pharmaceuticals.

     

    Organ said the six-year-old case had no bearing on his operation in the Bahamas or any of his business with American consumers.

     

    ''We're a class act. We do everything by the book," he said.

     

    After the FDA seizure, Organ spent weeks calling and writing his American customers. He also established new shipping routes using Canadian and British mail services to confound US authorities. He would not disclose details, but it is clearly making the business slower. The CanadaRx.net website says shipments are taking four to five weeks, instead of four to five days as in the past.

     

    The drugs in the Bahamian warehouse during a recent visit by a Globe reporter tell a story of convoluted supply lines. The drugs moved from a regulated world into an unregulated one.

     

    Tablets of the migraine medication Zomig stored along the warehouse's back wall, for example, were manufactured in England by AstraZeneca. AstraZeneca sent them to France, where they were put into a package with a French label. Before the Zomig could be sold to French consumers, an English wholesaler brought them back to England, pasted an English label over the French, and then sold them to the mail-order pharmacy in the Bahamas. Another AstraZeneca drug, Zestril, followed a similarly contorted route from Spain.

     

    A spokeswoman for AstraZeneca, Kellie Caldwell, said the shipment of these AstraZeneca drugs out of the European Union is an improper diversion, leaving consumers without any protection.

     

    ''Once a drug leaves the EU, there is no longer a governing body responsible for tracking that product or ensuring that it is stored in required conditions," she said. For example, Zomig is supposed to be stored at between 68 and 74 degrees, she said, and she questioned whether the warehouse temperatures in the Bahamas, particularly during power outages, exceeded that range.

     

    ''These are all legitimate drugs," said Matsumoto-O'Brien, the Canadian pharmacist working in Freeport for CanadaRx.net. ''I know where I got them from. I have the receipts."

     

    Patients from Massachusetts to Minnesota continue to buy drugs through CanadaRx.net. About 350 of the packages seized by US Customs and the FDA in Miami were bound for members of the Minnesota Seniors Federation, which has been negotiating bulk prices with CanadaRx.net for several years. The group sent a representative, executive director Lee Graczyk, to inspect the Freeport operation. Graczyk said he has examined more than a dozen operations in Canada, and that the Bahamas warehouse compared favorably.

     

    ''I believe you could match it with just about anybody here in the states," he said. Christopher Rowland can be reached at crowland@globe.com.

     

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