US online pharmacies take fight to Canadians

Battle for cross-border customers hots up


The trade in discounted prescription drugs between Canada and the US has elicited considerable controversy on both sides of the border. Yet recent figures show that sales of drugs via Canadian pharmacies have not been as great as some had predicted. However, as Datamonitor's David Deon explains, pharmaceutical companies could go further by driving the expansion of online prescribing in the US.

Minnesota and Wisconsin have generated about $545,000 in sales in the first five months of their state-sponsored websites offering Canadian drugs, according to figures made public last week. These are the first public accounting figures showing how much residents are using the websites, which were created by the governors of the two states. Yet the level of sales recorded represents a fraction of the cross-border business done by private and non-profit websites.

The statistics suggest the state-sponsored programs are not having a major economic effect, which had been a major concern of state pharmacists. Minnesota pharmacists are concerned that Canadian sales will take business away from them and make it harder to advise customers who get some of their drugs elsewhere. Officials of the Minnesota Pharmacists Association have stated that they were pleased with the relatively low usage of the state's drug websites.

The US Food and Drug Administration has openly criticized the Minnesota program, issuing two earlier letters to Minnesota officials that declared the program illegal and accused the state of abetting law-breakers. The agency is concerned with the safety of unregulated drugs purchased from Canadian pharmacies. Minnesota and Wisconsin are the only states that have inspected Canadian pharmacies, signed performance agreements with some and listed prices for hundreds of drugs on the state websites. The FDA warns that the states may not be doing all they should to ensure good practices by the Canadian pharmacies. In contrast, proponents of the program believe that it offers significant help to patients struggling with high drug costs.

Such controversy has only heightened interest in the online scheme in the US. On July 27, a group of Californians visited Winnipeg on a fact finding mission to local pharmacies. Local authorities in California are reportedly investigating the possibility of passing legislation that would allow the import of cheap drugs for patients who were uninsured or significantly underinsured. However, the Californian delegation also met with criticism that Canadians would be disadvantaged by the advent of a prescription drugs trade to the US on a large scale.

Total sales to US consumers from Canadian pharmacies are estimated to exceed $1bn this year. In all, US consumers spent about $160bn on prescriptions last year, and about $3bn in Minnesota, according to the Associated Press. The impact of parallel importing between the US and Canada on the pharmaceutical industry will grow as the online pharmacy market expands and constitutes a larger portion of overall drug sales. The financial impact of parallel importing through online pharmacies has been relatively minimal to date.

The big pharmaceutical firms have become increasingly concerned at the rise of such a parallel import trade between Canada and the US. In a bid to protect their revenues, both GSK and Pfizer have taken steps to restrict supply of their drugs to those Canadian pharmacies that supply across the border at a discount. Wider patient concerns about the quality of products and regulatory standards of pharmacies outside the US may mean that growth in this niche area remains modest for the time being.

If the big pharma players want to counter the discounters more proactively, however, they should help to facilitate the growth of an extensive network of online pharmacies for the US market alone. Online pharmacies themselves bring with them a number of advantages, notably the availability of a convenient method to fill prescriptions to improve drug fulfillment rates. Moreover, online pharmacies can bolster patient compliance rates by facilitating the refill process. Both of these factors should help protect companies' revenues.

The use of online pharmacies is likely to grow as consumers become more aware of the benefits of using such pharmacies. Moreover, by bypassing elements of the supply chain, online pharmacies often offer lower prices than standard pharmacies, providing a significant incentive for US consumers. After all, price is the major factor driving growth of the Canadian discount trade.

Source: Datamonitor

Related research: Datamonitor, "MarketWatch: Technology Annual Subscription"

Related stories

Big Pharma puts squeeze on Canadian Net pharmacies
Legality of online pharmacies questioned
Unscrupulous Net drugs trade led to death of student
The War against Viagra
e-Pharmacy sites offer risky prescription
Internet pharmacies draw fire on Capitol Hill


Other stories you might like

  • Robotics and 5G to spur growth of SoC industry – report
    Big OEMs hogging production and COVID causing supply issues

    The system-on-chip (SoC) side of the semiconductor industry is poised for growth between now and 2026, when it's predicted to be worth $6.85 billion, according to an analyst's report. 

    Chances are good that there's an SoC-powered device within arm's reach of you: the tiny integrated circuits contain everything needed for a basic computer, leading to their proliferation in mobile, IoT and smart devices. 

    The report predicting the growth comes from advisory biz Technavio, which looked at a long list of companies in the SoC market. Vendors it analyzed include Apple, Broadcom, Intel, Nvidia, TSMC, Toshiba, and more. The company predicts that much of the growth between now and 2026 will stem primarily from robotics and 5G. 

    Continue reading
  • Deepfake attacks can easily trick live facial recognition systems online
    Plus: Next PyTorch release will support Apple GPUs so devs can train neural networks on their own laptops

    In brief Miscreants can easily steal someone else's identity by tricking live facial recognition software using deepfakes, according to a new report.

    Sensity AI, a startup focused on tackling identity fraud, carried out a series of pretend attacks. Engineers scanned the image of someone from an ID card, and mapped their likeness onto another person's face. Sensity then tested whether they could breach live facial recognition systems by tricking them into believing the pretend attacker is a real user.

    So-called "liveness tests" try to authenticate identities in real-time, relying on images or video streams from cameras like face recognition used to unlock mobile phones, for example. Nine out of ten vendors failed Sensity's live deepfake attacks.

    Continue reading
  • Lonestar plans to put datacenters in the Moon's lava tubes
    How? Founder tells The Register 'Robots… lots of robots'

    Imagine a future where racks of computer servers hum quietly in darkness below the surface of the Moon.

    Here is where some of the most important data is stored, to be left untouched for as long as can be. The idea sounds like something from science-fiction, but one startup that recently emerged from stealth is trying to turn it into a reality. Lonestar Data Holdings has a unique mission unlike any other cloud provider: to build datacenters on the Moon backing up the world's data.

    "It's inconceivable to me that we are keeping our most precious assets, our knowledge and our data, on Earth, where we're setting off bombs and burning things," Christopher Stott, founder and CEO of Lonestar, told The Register. "We need to put our assets in place off our planet, where we can keep it safe."

    Continue reading

Biting the hand that feeds IT © 1998–2022