Remarks by

Marc Kealey

Cross-border Prescriptions and

the Impact on Canadian Health Care

5th Annual Health Policy Summit

St. Andrew’s Club & Conference Centre

Toronto, Canada

April 23, 2007

 2

My thanks to Insight Information for the invitation

to take part in this important event, the 5th Annual
Health Policy Forum. This is the place to be to get
the big picture on where health care is going in
Canada, and the quality and diversity of the
speakers and presenters assembled here is again
outstanding this year.

I’m particularly pleased to be included on a

program that features organizations representing
other major health care providers, our peers as
major players in health care in Canada.

Pharmacists, you see, have a valuable and

important perspective on many issues, local,
provincial, national, international, global. I’m here
today to deal with an international issue, that of
cross-border prescription drugs and the threat we
 3

see looming to Canada’s health. I’ll get to that in a

minute. But I want to take some time first to bring
you up to speed on the situation of pharmacists
and pharmacy in Ontario.

Over the last two years all of us in health care in

Ontario have been involved in a massive process of
change within the context of what the government
calls its health transformation agenda. We were
challenged as health care providers – pharmacists,
doctors, nurses, hospitals and others – to put the
patient at the centre of what we do.

This is by no means a change limited to Ontario;

it’s truly a made-in-Canada issue as we search for
ways to refine and improve our unique national
health care system and ensure its continued
sustainability and accessibility.
 4

As pharmacists, we are encouraged to see

significant progress in Ontario over the past two
years toward integration and collaboration. But
there is much left to do.

It’s clear that we and our fellow health care

providers simply have to step up with a real sense
of priority, put our collective thinking on the table
and fix what continues to be broken in this system.

The time to do so is now, so that we can build on

the gains that have occurred.

When we look at the structural changes through

which integration and collaboration is best being
realized among doctors, nurses, pharmacists and
hospitals, we’re finding it among the multi-
disciplinary Primary Care Teams now active, working
and succeeding in a range of locations and settings.
 5

And through the prism of Family Health Teams, for

example, the working relationship between
physicians and pharmacists around medication
management is undergoing fundamental reinvention.

At the broader level, there is a parallel shift

occurring in the relationship between pharmacists
and our physician colleagues at the Ontario Medical
Association and the College of Family Physicians.

Our interactions around medication management

are poised to be productive, driving common
policies and approaches that place the patient
appropriately at the centre.

When Jonathan Guss, came to the OMA not too

long ago, he started a fiscal realities committee
where we have quickly and cohesively come to
appreciate that the recurring central issue in
integration and collaboration is – exactly as we’re
 6

finding with Primary Care Teams – managing

patients’ medications.

That puts pharmacists squarely at the centre of

what patients need.

Pharmacists are equipped and ready to respond

here in Ontario. That’s a fact that patients and the
public in this province clearly understand.

In a survey of 1,000 Ontarians last year for OPA

found:

95% of Ontarians believe their pharmacists

help them better understand the medications
they need to improve their health;

88% trust their pharmacist to have an open

discussion about their health questions,
whether or not they are medication related;
 7

75% would not hesitate to seek education

services and patient care from their pharmacist
for smoking cessation, diabetes, asthma or
another health condition;

In this context of public preparedness and

expectation, we have been working with the
Ministry of Health on what is frankly an important
development for pharmacists. Starting April 1st of
this year, Ontario pharmacists have begun to
provide an expanded range of professional services
to our patients as the core of our new role in front-
line health care delivery.

The first professional service is a medication

review called Meds Check. Since the Meds Check
service became available to patients just three
weeks ago, it has been provided to more than
5,000 patients and is available at nearly one-
quarter of Ontario’s 3,000 pharmacies.
 8

Through this professional services initiative,

Ontario pharmacists are exercising their true
professional capacities. They are applying their
medication expertise to counsel patients, improve
patient health outcomes, and reduce pressures on
other parts of the health system – and they are
being paid for it.

Each Meds Check service provided to an ODB-

eligible patient earns a flat fee for the pharmacy.
This is an important new revenue stream for
pharmacy, backed by an initial commitment by the
ministry of 50 million dollars in fiscal 2007-08.

The new role of the pharmacist is part of the truly

enormous change brought about by the
Transparent Drug System for Patients Act, or
TDSPA, which became law in Ontario last fall.
 9

If you are at all familiar with what’s known as “the

drug file,” you will be aware that the
implementation of the TDSPA has been a rocky
road for pharmacists and the pharmacy sector in
Ontario.

But we succeeded over the past year in winning

back what might have been significant losses for
pharmacy. That enabled our board, some months
ago, to support outright the strategy and direction
of the Act, and agree that pharmacists should
move forward from it into the future as a
profession and as a health care player in this
province.

We’ve undertaken to communicate to the

government, other pharmacy and health
stakeholders, patients and the people of this
province that pharmacists are ready to engage in a
 10

positive, forward-looking process to improve health

care.

In the new paradigm of Ontario’s drug system,

community pharmacy is finding new ways and new
opportunities to secure our role as health care
providers and maintain the viability of our business
models. Professional services is one such avenue.

These are not simple issues; and neither is the

work of the pharmacist today simple or one-
dimensional. Patient needs are intricate, moreso as
we age as a population, and the pharmacist-
patient relationship is one of increasing complexity.
It’s fortunate in these times that pharmacists have
the trust of patients.

That trust is highest at 98% versus politicians at

7%.
 11

But not every politician rates low on trust. When

U.S. President Gerald Ford died earlier this year, I
was amused to read the following tribute:

Quote: “He had the look of a pharmacist. You never

got the sense he was as conniving as the others.”

But I have to assert today that it would be

incorrect to mistake the niceness of pharmacists
for complacency. Particularly when the health and
well-being of our patients is at stake.

That is the case with the issue I want to focus on

today: the renewed invasion of Canada by
American patients in search of low-cost
prescription drugs.
 12

When I sound a warning today about re-opening

the U.S. border to prescription drugs from Canada,
I’m speaking from the perspective of pharmacists
who are not only trusted, but expected by their
patients to get involved and to advocate in an
outspoken and effective way.

Our patients want us to protect their health. So

we’re speaking up to identify the issue of cross-
border prescription drug importation from Canada
by Americans as a threat to public health and
safety, and to national security, in both our
countries.

Our warning is responsible, well-considered,

realistic and reasonable. We issue it because as
pharmacists we put patient health, public health,
and the safety and the security of the prescription
drug supply at the top of our list of priorities.
 13

Let me trace back for you what’s happened in the

U.S. Back in September, a deal to once again
permit so-called “foot traffic” personal importation
of prescription drugs by American patients was
struck in Congress and quickly signed into law by
President Bush.

Events followed quickly that in effect re-opened all

channels of cross-border prescription drug
importation by individual U.S. patients.

Since foot traffic works only for patients in border

states, another deal was needed.

So the Bush Administration intervened in October

by ordering the Department of Homeland Security
to cease confiscation by Customs and Border
Protection agents of prescription drugs mailed from
Canada.
 14

Oversight of Canadian prescription drug imports

was sent back to the Food and Drug
Administration, which by its own admission lacks
the capacity for comprehensive inspection and
enforcement.

This climbdown on enforcement at the border

expanded the permitted forms of cross-border
importation to cover internet and mail-order sales.

Since October 9th, the day U.S. Customs went

hands-off on prescription drugs purchased by
American patients from Canadian internet
pharmacies, the door to Canada’s medicine cabinet
has been thrown wide-open once again.

Three months ago, on January 10th, these changes

were consolidated and brought forward in a
greatly-expanded form in a new legislative
proposal in the new Democrat-controlled Congress.
 15

A bipartisan bill called the Pharmaceutical Market

Access and Drug Safety Act of 2007 was
introduced in both the Senate and the House of
Representatives.

This bill legalizes the importation of prescription

drugs from Canada by American patients,
pharmacists and drug wholesalers. That means the
legalization not only of personal importation by
individual U.S. patients, but also of bulk
importation by HMOs, state drug plans and other
large entities such as high-volume retail chains.

The congressional leaders behind this bill are

predicting its passage in the next two to three
months, saying they have enough support in
Congress to override a presidential veto.
 16

So let’s get this straight: Here in Canada, we have

built a drug supply and pricing system that meets
the needs of Canadians as part of our unique
marriage of social and economic policy. While in
America, U.S. lawmakers are deciding it’s okay to
cherry-pick the benefits of Canada’s regulated drug
system as a solution to a domestic U.S. problem
with unregulated drug prices.

Instead of designing a system that responds to the

legitimate needs of Americans, U.S. legislators are
telling their constituents to buy prescription drugs
in Canada as a quick fix to high U.S. drug prices.

What does this mean? Well, picture an open

floodgate. Picture a made-in-America problem
being solved on the backs of Canadians.
 17

We’ve been warning of this situation for months

and months. We sent a cautionary letter to Health
Minister Tony Clement on September 1st. We
followed up in October and November with
additional calls to action.

Our organizations believe that this American

legislative proposal poses an imminent and serious
threat to the security and integrity of Canada’s
drug supply, and hence a serious and genuine
threat to the health and well-being of Canadians.

What we’re looking at is a free-for-all on cross-

border drugs…and in any free-for-all, someone is
bound to get hurt.

As pharmacists, we will not stand by and allow the

victims of America’s prescription drug pricing
 18

problem to be the very patients here in Canada

who trust us to protect their health.

We see four dangers.

First, the so-called green light on personal drug
importation is in fact a danger signal – because it
encourages patients to bypass their own
community pharmacists.

Patients who do so jeopardize their health and risk

dangerous drug interactions by relinquishing
expert consultation and pharmacist-patient
interaction.

We’ve driven that message home with our patients

in this country; our colleagues at the American
Pharmacists’ Association have carried it forth to
their patients. Pharmacists in Canada cannot
provide adequate and appropriate patient
counseling when they don’t have access to the
 19

U.S. medical records of a patient receiving that 90-

day supply of drugs to take home. And often a
patient is reluctant to share information about a
Canadian-filled prescription with his or her U.S.
health-care provider. This is a profoundly
dangerous situation.

Those most vulnerable are the American patients

in the greatest need of low-cost drugs – the
elderly, those most likely to be using multiple
medications, and most needful of the medication
management expertise their pharmacist can
provide.

The second threat to public health is in our own

country, with the potential for the depletion of the
Canadian drug supply.

U.S. demand for prescription drugs is more than

ten times the Canadian supply. Just imagine how
 20

the three million residents of the state of Iowa

would react if 33 million Canadians suddenly
descended on them and said, “We’re here for your
prescription drugs, hand ‘em over.”

Canada simply does not have the capacity to feed

America’s appetite for lower-cost drugs. Our
pharmacists do not want to become America’s drug
store. Our job is to provide medications and
expertise to Canadian patients, not provide
solutions for the shortcomings of the U.S. health
care system.

The bulk importation provisions of this new U.S.

legislative proposal would quickly drain the
Canadian drug supply and cause a crisis in drug
availability for Canadians.
 21

One authoritative US analysis says Canada’s drug

supply could withstand full-blown U.S. importation
for only a little over one month.

A crisis in drug availability translates into an

impending threat to public health and safety.

The practice of arbitrage – flowing U.S.

prescription drugs into Canada solely for
reimportation – creates a false economy that
American pharmaceutical manufacturers simply will
not support.
 22

And if in response Canadian internet pharmacies

import drug products from offshore, the lines can
quickly blur, making it difficult for U.S. patients –
and the FDA – to differentiate between drugs
produced or approved in America, and those
produced in India or Israel or China, even in so-
called FDA-approved factories.

Unless and until a comprehensive drug pedigree

regime is in place and all prescription drugs are
identifiable through Radio Frequency Identification
(or RFID) technology, that issue cannot simply be
wished away.

The industry is telling us RFID drug pedigrees are

at least two or three years off. In the interim,
knowing which mail-order drugs are produced
where remains a guessing game – with patient
health up for grabs.
 23

And therein lies the third threat, that of counterfeit

drugs. The re-legitimizing of internet and mail-
order drug traffic encourages fraud by offshore
criminals posing as Canadian pharmacists and
selling counterfeit drugs.

The evidence produced by U.S. Customs on this

file is rock-solid, and damning. The Customs
statistics on mail-order seizures show at least 10
per cent of packages purported to be from
Canadian internet pharmacies in fact contain
counterfeit drugs.

In one seizure last fall, 19 million dollars worth of

prescriptions that U.S. patients believed were filled
by a Canadian internet pharmacy were actually
filled by a criminal organization located in Belize.
The drugs were fake and the patients, rather than
saving a few dollars, lost every penny they spent.
 24

The physical harm that can be done to patients

who believe phony drugs they take are genuine
cannot be over-stated. This imperils the health and
safety of those who, again, are trying to do
nothing more than save a few dollars.

Last month, the reality of this danger was brought

home with a tragic finding by the coroner for
Vancouver Island region in B.C.

The coroner tied the death of 56-year-old Marcia

Bergeron to counterfeit pills she unwittingly
ordered from a purported Canadian internet
pharmacy. We received from the coroner’s office
the toxicology report indicating that these
counterfeit pills contained dangerously high levels
of the heavy metals strontium, uranium and lead,
as well as other hazardous elements.
Last month, we advised the B.C. coroner that the
circumstances of Ms. Bergeron’s death are
 25

disturbing to Canadian pharmacists and patients.

And we urged the coroner to conduct an inquest to
make public all the facts of the case.

We believe an inquest represents the best possible

path whereby the issues and questions raised by
Ms. Bergeron’s death may be answered and the
public responsibly and fully informed and
protected.

If Internet pharmacies masquerading as legitimate

and Canadian are supplying counterfeit drugs to
Canadian patients, we need the mechanism of an
inquest to fully expose the facts surrounding this
incident and to identify and hold to account those
responsible. We are further concerned that the
presence of poisonous heavy metals in counterfeit
drugs raises additional serious questions.
A full exposure of the facts surrounding Ms.
Bergeron’s death will assist Canadians to
 26

understand the dangers of circumventing the

legitimate drug system and putting their health
and even their lives at risk by purchasing drugs
from unknown and unreliable sources.

At last report the coroner continues to weigh the

case for an inquest.

The fourth and final threat I warn you about today

is one I do not raise lightly.

The greatest danger posed to the United States

today by the legislative and enforcement changes
on cross-border drugs is a renewed national
security vulnerability through the possibility of
drug terrorism, with mail-order drugs used as the
vehicle of attack.

Who can say with absolute certainty that the next

19 million dollars worth of phony drugs could be
 27

sent to America not by criminals in Belize, but by

terrorists? That the next batch of tainted pills from
a purported Canadian internet pharmacy will
contain deadly substances added deliberately to
cause harm or death?

Do Americans really want the hands-off policy

Homeland Security has adopted? Are the
Democrats and the Republicans in the new
Congress prepared to live with these risks?

We as Canadian pharmacists are not the first to

raise this issue. In a report to Congress in April
2005, Guiliani Partners warned:

Quote: “The nation’s medicine supply is vulnerable

to exploitation by organized criminals, drug
traffickers and terrorists. We should not contemplate
opening our borders to threats to our medicine
 28

supply when in all other aspects we are searching

for ways to tighten the security of our borders.”

Canadian pharmacists are asking today, why is

Congress ignoring that message? And why is it
ignoring other warning signs, like the court case in
2006 in Detroit in which 19 people, including five
Canadians, were charged with peddling counterfeit
prescription drugs and funneling the profits to a
terrorist organization?

The answer, in brief, is that U.S. lawmakers are

whistling past the graveyard, hoping against hope
that wide-open cross-border prescription drug
importation can remain safe. That the threats and
dangers I’ve described will never materialize.

Our concerns extend beyond these issues of safety

and security, to the bottom-line question of
 29

whether, in the face of this legislation, we in

Canada can maintain the lower price differential
that makes Canadian prescription drugs seem like
a panacea to U.S. lawmakers and patients.

Prescription drug cost is the big issue right now for

Americans, but this legislation will quickly make it
a Canadian issue. The threat here is that while this
legislation may incrementally reduce the price of
American prescription drugs by a few percentage
points, Canadian prices will go up dramatically as
we deal anew with the whole range of complex
issues around subsidization, trials, research and
other factors underlying the enormous costs of
developing and manufacturing prescription
medications.
 30

This has the makings of a serious new issue in

intergovernmental affairs within Canada. If
unimpeded U.S. importation drives up drug prices
in Canada, each provincial ministry of health faces
the prospect of staggering increases in drug costs.
In Ontario, for example, the Ontario Drug Benefit
program procures some $3.5 billion worth of drugs
each year.

The provincial ministers of health and their

premiers need to start thinking right now about
how this U.S. legislative proposal could bring about
fundamental change in the prescription drug
pricing regimes they currently view as stable and
sustainable.

It would be prescient and appropriate for the

premiers to challenge the Prime Minister Harper on
this issue.
 31

To demand that he demonstrate how his

government will not only prevent drug shortages in
Canada if this proposal becomes law in the U.S.,
but also maintain price protection in Canada when
American bulk buyers start pulling vast quantities
of prescription drugs from our regulated market
into their unregulated market.

At the root of the issue is this: American politicians

and patients continue to believe that Canada will
continue to offer solutions to their systemic
problem of high prescription drug costs.

Canadian pharmacists will tell you that we will not,

because we cannot.
 32

It’s for that reason that we are calling on the

Harper government to take immediate action to
protect Canada’s prescription drug supply by
banning prescription drug exports to the U.S. by all
means, including foot traffic, internet and mail
order, as well as through bulk importation.

As Canadian pharmacists, we cannot slake the

thirst of U.S. patients for cheap prescription drugs.
But we can urge our own government to turn off
the tap.

On January 12th, our organizations, representing

Canadian pharmacists, patients, and members of
the supply chain, called on the Government of
Canada to institute an immediate ban on the
export, both bulk and retail, of prescription drugs
from Canada.
 33

We asked Health Minister Tony Clement to meet

with us to discuss how the government intends to
protect Canada’s drug supply and ensure continued
access to medications for Canadian patients.

Back in October, in response to an earlier letter,

the Minister indicated Health Canada will take
action if and when Canada’s prescription drug
supply is affected by U.S. importation.

We told the Minister in January, and I repeat

today, that we can neither counsel nor support a
reactive, after-the-fact approach to the protection
of public health. We believe it is incumbent on the
Government of Canada to respond proactively to
this threat, driven by a commitment to prevent
harm and protect the public interest.
 34

It is our firm belief that the Government of Canada

can no longer simply stay silent on cross-border
prescription drug exportation, particularly in light
of the legislative proposal now before Congress.

It’s no secret what’s needed to avert this crisis.

U.S., lawmakers must meet their own prescription
drug problem head-on, and stop looking north for
stop-gap measures that will quickly become
unsustainable problems – or worse.

In the meantime, get ready for the cross-border

free-for-all. To the Harper government, we’re
writing it large:

Put the health and safety of Canadians first. Ban

prescription drug exports to the U.S., and do it fast.
 35

There is a private member’s bill, introduced by MP

Carolyn Bennett on October 31st, that the
government could adopt to give the Health Minister
immediate power and authority to ban bulk
reimportation. That bill will now be debated in the
first week of May.

I will be taking this fight to Washington on May 23,

a few weeks from now, as the U.S. bill regains the
spotlight.

I will be presenting our position – our advocacy for

patient health in both the U.S. and Canada – at a
major session on cross-border drugs being
mounted at this crucial time by the Center for
Strategic and International Studies.

My message then will be the same as today. Faced

with the threat of continued U.S. activity to permit
and condone the easy answer of internet
 36

pharmacy, the solution for Canada is clear. The

need for action is urgent. We will continue to press
our government to do what is necessary to protect
our drug supply, and the safety of Canadians.