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Pfizer targets Canadian pipeline

Cuts supply of drugs to wholesalers it links to US mail-order deals

Pfizer Inc. is escalating its fight against the cross-border Canadian drug trade, cutting off the supply of such popular prescription medicines as Lipitor and Celebrex to two Canadian wholesalers that it suspects are feeding a distribution chain for American consumers.

The two pharmacy wholesalers -- of about 20 wholesalers in Canada -- are based in Manitoba and Alberta, provinces with scores of Internet mail-order pharmacies that have sprung up in response to demand for lower-cost drugs in the United States. Pfizer's move struck home, according to a representative of the Canadian Internet pharmacy industry, who sent out an urgent e-mail alert Thursday to members.

"It is the most severe blow that we have been dealt yet," warned the alert from David MacKay, executive director of the Canadian International Pharmacy Association. "Other wholesalers will be frightened stiff to sell any product to our pharmacies."

Drug prices are 20 to 80 percent lower in Canada because of government price controls. Critics say drug manufacturers are trying to disrupt the trade to protect the higher US prices. But the the industry says it wants to protect American consumers from potentially counterfeit drugs. And, it says, higher prices are necessary to provide money for research and development.

To date, no injuries from Canadian drugs have been documented. The US government's and drug companies' tactics have come under fire from several governors and mayors, including Boston Mayor Thomas M. Menino, who plans to start a limited importation program for city workers in July.

Pfizer began its effort to stem the cross-border business by setting limits on supplies to mail-order pharmacies last summer. It then began putting pressure on Canadian wholesalers in a series of warnings over the last several months. Pfizer would not reveal yesterday how it tracks the movement of its drugs through the Canadian system and into the United States. But a Canadian pharmacy executive, Canadameds.com CEO Mike Hicks, said the drug company's tactics are effective.

"It's going to be disruptive," said Hicks. "If they continue making Pfizer products unavailable for Canadian mail-order pharmacies, the result will be US consumers who need to buy from Canada will no longer be able to do so. Congratulations, Pfizer, if that's how you choose to protect the health of Americans."

Pfizer said it had evidence that both ProCurity Pharmaceutical Services Inc. of Manitoba and Prairie Supply Cooperative of Alberta were violating terms of their agreements with the drug giant by supplying the cross-border Internet market. It sent them letters on Thursday saying they could no longer sell Pfizer products.

"We've made certain. We're quite clear that they were in violation. We communicated with all of the distributors on a continuing basis, notifying them of who the approved pharmacies were and those that were not approved," said Pfizer spokesman Jack Cox. "It was a matter of unapproved pharmacies that had purchased from them."

"It's not a permanent action," he added. "If they want to notify Pfizer that they will adhere to those terms, we would do business with them."

ProCurity and Prairie issued letters to customers on Thursday denying they violated Pfizer's terms. ProCurity had sales of $300 million last year, according to information on its website. The company did not respond to telephone messages yesterday. Prairie had sales of $150 million, said its general manager, Laurie Gauthier. He said yesterday Prairie did inadvertently sell Pfizer drugs to a single pharmacy on a list of 149 that Pfizer had blacklisted.

"I'm a little disappointed they didn't work with us a little more closely on this," he said. "It's almost like lying in wait, waiting to see someone step over the line, and then hammer us with a sledgehammer."

Canadian pharmacists have worried that domestic supplies may be affected by the actions of Pfizer and other big drug manufacturers, including GlaxoSmithKline and Eli Lilly and Co., to crimp the drug pipeline. HealthCanada, the equivalent of the US Food and Drug Administration, has not detected signs of domestic shortages as a result of the drug manufacturers' tactics, said Catherine Saunders, a spokeswoman for the agency.

"We are seeking to determine what the effect of Pfizer's actions will be," she said. "Pfizer's announcement is cause for concern."

Christopher Rowland can be reached at crowland@globe.com.

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