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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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NOVEMBER 25, 2003
An Iffy Prognosis for Online Pharmacies [Page 2 of 2] In fact, a cottage industry based on Canadian pharmacies is thriving. For instance, Discountrxmart in Queens, N.Y., which does storefront, phone, and Web sales, has signed up 2,000 customers since starting up last April. John Robinson, vice-president and co-founder, says that a licensed Canadian pharmacist at a Winnipeg, Manitoba, pharmacy called Canamerica checks and fills his customers' faxed-in prescriptions. He's quick to add that his outfit sells only sealed products from manufacturers and doesn't deal with any controlled drugs, which are the mainstay of rogue operators. Robinson predicts that his customer list could double to 4,000 by next April, though he concedes it's hard to predict how his sales might be affected should the Food & Drug Administration come calling. The FDA's position is that so-called "reimportation" of medications is illegal unless done by the manufacturer. But to date, its enforcement has been spotty at best. TRUST BUSTERS? The proliferation of such sites is alarming, argues Carmen Catizone, executive director of the National Association of Boards of Pharmacies. "People believe they're buying drugs from Canada, but the sources could be any country where the drug is cheaper," he says. He warns of a dark future where U.S. regulatory oversight regresses to the days when a Tennessee drug company sold an antibacterial dissolved in antifreeze -- a poison -- as a cure-all for ailments in children. Both rogue pharmacies and sites using foreign pharmacies have hurt his company's performance, adds Peter Neupert, chairman of Drugstore.com. Rogue sites "lower trust and confidence in people who want to buy important products online," he says. His site, which buys its products from U.S. distributors, can't match the much lower prices at sites that use Canadian pharmacies. Retail Forward's Crawford sees Drugstore.com remaining a niche player whose strengths lie in its broader assortment of home health-care appliances and drugs for sexual health and well-being. The company has been unprofitable until now, but Neupert expects it to break even in the current quarter. POLITICAL TUG-OF-WAR. One improvement that all online drug purveyors could use is better technology. The "missing piece" that would take online sales of drugs to the next level, says Crawford, is a "universal and secure system" that could link patients, doctors, and pharmacists. The industry is in flux politically as well. Companies such as Robinson's Discountrxmart will face serious pressure as pharmaceutical companies ramp up their lobbying against imported drugs -- and compete against them in the U.S. Already, support for legislation allowing budget-strapped states to buy drugs from foreign countries has waned in Congress, while enforcement of existing laws by the FDA has risen. In early November, a judge in Tulsa granted the FDA's request to shut down a large local operator called Rx Depot that served as a middleman between patients and Canadian pharmacies. Also in early November, Overture, the commercial search division of Yahoo! (YHOO ), said it would no longer accept advertisements related to online pharmacies or pharmaceutical drug sales, claiming the industry had become too "complex." Prescription drugs certainly have a future online. PBMs, in particular, seem likely to become major players. And tens of millions of Americans may soon find that treatment is just a click away.
 By Amy Tsao in New York
BW MALL
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