Federal judge grants request to shut down Rx Depot

Thursday, November 6th 2003, 12:00 am
By: News On 6

TULSA, Okla. (AP) -- A federal judge granted the government's request Thursday to shut down a company that helps customers buy cheaper prescription drugs from Canada.

The decision by U.S. District Judge Claire Eagan could be a blow to cities and states nationwide that are considering allowing employees to import drugs to cut rising prescription costs.

An estimated 1 million to 2 million Americans already buy Canadian drugs through the Internet, storefront operations or by crossing the border.

The government asked Eagan to shut down the 85 storefronts operating nationwide as Rx Depot and Rx of Canada.

"This court is not unsympathetic to the predicament faced by individuals who cannot afford their prescription drugs at U.S. prices," the judge wrote. "However, the defendants are able to offer lower prices only because they facilitate illegal activity determined by Congress to harm the public interest."

The judge said Congress is the best forum for weighing the prescription drug importation issue.

Food and Drug Administration officials alleged the Tulsa-based company is breaking the law and putting the public at risk by importing drugs outside of its scrutiny. Only manufacturers are allowed to bring medicines into the country.

Drugs are up to 50 percent cheaper in Canada than the United States because of government price controls.

Rx Depot's attorney had argued that shutting down the firm would create a domino effect that would cut off Americans nationwide from the only medications they can afford.

Several of Rx Depot's customers told Eagan that they could not afford their medications otherwise. A heart transplant patient testified in a two-day hearing last month that he saves nearly $9,000 a year through the company.

Springfield, Mass., Mayor Michael Albano has said his city expects to save $9 million through a voluntary program in which employees get their drugs through Canada.

Illinois, Michigan, Iowa and Minnesota all recently announced they are considering similar programs.

Rx Depot faxes customers' prescriptions and medical histories from its shopfronts to a Canadian pharmacy. The pharmacy fills the prescription and mails the medication directly to the customers.

Justice Department lawyers argued that Rx Depot is "able to offer such low prices only because they facilitate illegal activity determined by Congress to harm the public interest."

FDA witnesses testified that the safety of drugs coming from Canada could not be ensured.

However, they said the agency uses enforcement discretion when it comes to individuals crossing into Canada to buy small amounts of medication.

Rx Depot's lawyer, Fred Stoops, argued that such discretion is unfair to seniors who don't live close to the Canadian border.

The government's lawyers, however, said Rx Depot is different because it's a large company making commissions off the sale of the drugs customers buy from Canada.