East Coast witness to testify for RxDepot

Sunday, October 5th 2003, 12:00 am
By: News On 6

TULSA, Okla. (AP) -- A company that acts as a liaison between consumers and cheaper prescription drugs from Canada is getting a boost from a Massachusetts mayor.

Michael Albano, mayor of Springfield, Mass., plans to testify on behalf of RxDepot, which is the target of a federal lawsuit that seeks to close the Tulsa-based company.

"I'm looking at the big picture," said Albano, whose city became the first in the nation to have a Canadian drug supplier for its employee health plan.

"If the government is allowed to close RxDepot, it will have a ripple effect across the country and eventually wind up at my door. The eyes of America are going to be on Tulsa," Albano said.

U.S. District Judge Claire Eagan will convene a hearing on Wednesday before deciding whether to issue a nationwide injunction against RxDepot. The company has rapidly expanded to 85 storefronts in 26 states since it opened in Tulsa a year ago.

RxDepot's Oklahoma locations were forced to close in September due to a separate Oklahoma County District Court lawsuit filed by the Oklahoma Pharmacy Board. Its Montana site also has been closed due to a state lawsuit there.

The federal lawsuit was filed by the U.S. Department of Justice at the request of the Food and Drug Administration. It alleges that the importation of drugs from Canada violates federal laws and puts the public at risk because the medicine's authenticity cannot be guaranteed.

RxDepot attorney Fred Stoops said he will defend the business by arguing that the importation regulations violate antitrust laws and the North American Free Trade Agreement.

Although many similar businesses are operating in the United States, RxDepot President Carl Moore said his company is being targeted by federal officials because "they want to cut the head off the serpent. We have been the leader."

Albano will testify about how he contracted with a Canadian pharmacy in July in an effort to cut costs for his city's employee health plan.

Albano said the city will save between $4 million and $9 million each year. Springfield, which has a population of about 150,000, has roughly 6,000 city employees and 3,000 retirees.

"The response we've gotten from this has been overwhelmingly positive," he said. "Other cities have been calling to see how they can do the same thing. It's a movement that has legs, and that's got the drug companies scared."

The FDA has sent letters to Springfield city leaders and its Canadian pharmacy ordering them to stop. But the mayor, who gets his own family's medicine north of the border, said they would not comply.

RxDepot's customers, mostly senior citizens and others who lack drug benefits, go to the company with their prescriptions, which are faxed to a pharmacy in Canada. There they are reviewed by a doctor, filled and shipped directly to the customers' homes.

Because of Canadian price controls and the favorable exchange rate, the savings sometimes amounts to more than 50 percent.