Online Pharmacies, Free Trade Zones and Counterfeit Drugs

Nearly four years ago, Americans were warned against buying prescription drugs from Web sites linked to Canada’s biggest mail-order pharmacies, Mediplan Prescription Plus Pharmacy—also known as RxNorth—after laboratory tests of intercepted shipments detected counterfeits. Among the counterfeits were widely prescribed medications for heart disease and cholesterol.

At the time, Mediplan’s Founder and President Andrew Strempler criticized FDA and the pharmaceutical industry for attempting to “halt drug sales to U.S. citizens at fair prices,” adding that they had never had problems with the products sold to consumers.

But last week, the Montreal Gazette reported that Strempler lost his pharmaceutical credentials—prohibiting him from practicing his trade in the province of Manitoba where Mediplan is based. According to the Gazette, “Experts say it’s the most severe penalty that can be handed to a pharmacist.”

However on Friday, the Winnipeg Free Press reported that Strempler began operating an ancillary company, PharmaCheck, “in a free trade zone in Curacao in August 2006,” the same year the FDA warned consumers about buying drugs from RxNorth. According to the Free Press, Strempler is “distributing generic drugs from an online pharmaceutical business based on an island off the coast of Venezuela” while he reportedly resides in Panama.

While the investigation of Strempler and his related properties remain open, it serves as a reminder that not all online pharmacies are not subject to the same standards as their brick and mortar counterparts.

Moreover, it raises the issue of free trade zones—originally created to encourage legitimate trade, they have been found to obstruct anti-counterfeiting efforts due to waived tariffs and lax regulatory oversight, creating opportunities for fraud.

The New York Times reported on this growing problem in December 2007—a story that, incidentally, linked RxNorth to a nearly $4 million drug raid in the Bahamas.

According to PSM board member Tom Kubic, “An online pharmacy operating in a foreign country’s free trade zone and shipping remotely is not considered a pharmacy in that country, and therefore not regulated by any pharmacy regulator at all,” posing an additional threat to consumers who turn to the Web to fill prescriptions.

PSM is home to a plethora of fact sheets related to drug safety, including a checklist for medicine safety, tips for saving money on prescription drugs, as well as facts about ordering drugs from Canada.