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Canada-to-U.S. Internet Rx sales fall

Posted On: Mar. 21, 2007 12:00 AM CST

Cross-border prescription drug sales from Internet pharmacies in Canada to the United States dropped nearly 50% last year, a study concludes.

While 2005 sales by Canadian Internet pharmacies to the United States reached $420 million Canadian ($361.4 million), 2006 sales declined to $211 million Canadian ($181.1 million), according to pharmaceutical and health care industry researcher IMS Health Canada in Montreal.

Factors that contributed to the decline included the Medicare prescription drug benefit, an unfavorable currency exchange rate, supply restriction initiatives imposed by pharmaceutical manufacturers, and negative media coverage about counterfeit and foreign drugs, said Ian Therriault, IMS Health Canada's senior industry expert.

However, pending legislation in the United States aimed at allowing drug imports may change this declining trend, Mr. Therriault added.

In 2006, Canada's prescription drug market grew to $17.8 billion Canadian ($15.28 billion), up 7.9% from 2005 amid strong sales of oncology medications and a sales rebound for drugs affected by safety concerns such as Cox-2 inhibitors, according to IMS Health.

Canada's generic drug industry is poised to benefit from this year's expiration of patents on brand-name prescription drugs representing more than $1 billion Canadian in sales. Last year, generic drug sales grew 13.6%--twice the rate of branded sales.

The Canadian pharmaceutical market is expected to grow at an average annual rate of 7.5% through 2010, reaching $23.4 billion Canadian, Mr. Therriault said.

"Despite generic competition and cost-containment measures by public drug plans, growth in the industry will be sustained by oncology, specialty products such as biological response modifiers, and plans for a national catastrophic drug coverage program," he said.