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U.S. Sues to Block Importing of Drugs

September 12, 2003|From Associated Press

NEW YORK — The Justice Department filed a lawsuit Thursday to shut down two companies operating storefronts that help senior citizens purchase cheaper prescription medicines from Canada.

The lawsuit, filed in U.S. District Court in Tulsa, Okla., charges that Rx Depot Inc. and its sister company, Rx of Canada LLC, violated federal law by causing the importation of Canadian prescription drugs. Under U.S. law, only pharmaceutical manufacturers are allowed to bring their medicines into the country.

Rx Depot President Carl Moore said he would fight the lawsuit, saying senior citizens on limited budgets need his service.

Rx Depot and Rx of Canada have a combined total of 85 stores, 22 of which are owned by Moore and his son, Joe-Max, a veteran of the U.S. national soccer team.

Customers bring prescriptions to the stores, which fax them with the customers' health information to a Canadian pharmacy. A doctor reviews them, the prescriptions are rewritten, and the pharmacy sends the drugs by mail to the customers, usually within two weeks, according to Fred Stoops, Moore's lawyer.

The companies get a percentage of the prescription price, he said.

Prescription medicines are up to 50% cheaper in Canada because of that government's price regulation.

Justice Department spokesman Charles Miller said the judge assigned to the case could immediately grant the government's request to close the stores, but he said he didn't know whether that was probable.

The lawsuit seeks to close all of the chains' stores and obtain financial relief for the plaintiffs, including restitution to customers.

"People saved half the cost of the prescriptions. What damages could they be talking about?" Stoops said. "The logic of this case makes no sense."

Stoops said the companies are not breaking the law. He said that allowing only pharmaceutical manufacturers to import their products from abroad violates antitrust statutes. He also said people have the right to import drugs from Canada under the North American Free Trade Agreement.

The U.S. Food and Drug Administration warned Rx Depot in March in a letter to its Arkansas store that it was illegally importing drugs from Canada and to quit or risk being shut down.

Rx Depot not only refused, it expanded into more states, FDA Associate Commissioner William Hubbard said this week.

Rx Depot and Rx of Canada operate storefront businesses in about 20 states. Pharmacy regulators in four states have attempted to close the companies' stores, but only Montana has succeeded.

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