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8/20/2004

Rx Depot Loses Importation Fight

Donna Young

The Food and Drug Administration (FDA) won a battle today in its ongoing war to stop the importation of illegal drugs into the United States.

Nearly a year after the Department of Justice filed an injunction on behalf of FDA to shut down Rx Depot Inc.a Tulsa, Okla., operation that helped Americans illegally import prescription drugs from Canadaand its affiliated company, Rx of Canada LLC, the owners of the storefront operations agreed to close their shops and dismantle their Web sites.

After a highly publicized two-day hearing, a U.S. district judge ordered Rx Depot to shut down its 85 stores in a November 6, 2003, preliminary injunction.

FDA today announced that Rx Depot and Rx of Canada owners Carl Moore and David Peoples agreed to sign a consent decree of permanent injunction in which they admitted to violating the Food, Drug, and Cosmetic Act by "causing the importation of unapproved new drugs and U.S.-manufactured drugs."

FDA had warned Moore and Peoples in March 2003 that they were violating the law by helping U.S. patients fill prescriptions through Canadian pharmacies.

Patients would take a prescription to one of Rx Depot's storefront operations or complete an information form from the company's Web site and fax it along with the prescription to the company.

The patient's prescription and information form, including credit card billing information, were sent by Rx Depot to a cooperating Canadian pharmacy.

A Canadian physician would rewrite the prescription, and the Canadian pharmacy would dispense the medication and ship it to the U.S. customer.

The Justice Department argued in its complaint, filed Sept. 11, 2003, that prescription drugs imported from foreign countries do not have the same assurances of safety and efficacy as medications that are regulated by FDA.

"Because the drugs are not subject to FDA oversight and are not continuously under the custody of a U.S. manufacturer or authorized distributor, their quality is unpredictable," the complaint stated.

Some states, including Arkansas, Montana, and Oklahoma, took action to close Rx Depot stores in their states.

But other states, such as Wisconsin, Minnesota, and Illinois, have embraced importation of drugs from Canada.

Importation has been a hotly debated topic among members of Congress over the past year, and has also been a subject in this year's presidential race.

Legislators are awaiting a comprehensive study from the Department of Health and Human Services (HHS) Task Force on Drug Importation, a panel of Bush administration officials led by Surgeon General Richard H. Carmona.

The study was ordered under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

The task force was charged with identifying how importation might be implemented safely and predicting its impact on the health of Americans, health care costs, and research and development of new drug products.

Douglas Scheckelhoff, director of pharmacy practice sections for the American Society of Health-System Pharmacists (ASHP), said that the Food, Drug, and Cosmetic Act has "protected patients from unapproved drugs for years and its circumvention poses a risk to the public safety."

ASHP "stands behind" FDA in its enforcement of federal laws, he said.

"We feel strongly that the current laws and regulations provide a framework that helps maintain the safety of the pharmaceutical supply chain," Scheckelhoff declared. "Schemes that bypass this framework can put patients at risk."

Moore and Peoples agreed to pay fines of $4,000 per day if FDA catches them violating the terms of the consent decree, according to the agency.

The two men also consented to pay any costs associated with FDA inspections.

The agency charges $69.37 per hour per FDA investigator and $83.15 per hour for agency staff conducting laboratory or analytical work.

At press time, there was no word on whether the judge decided to force Moore and Peoples to make restitution or surrender their profits from the storefront operations for violating the law.

According to FDA, the matter of restitution or disgorgement is still in the hands of the court.

The consent decree was filed in the United States District Court for the Northern District of Oklahoma.

No one answered at a phone number listed in Oklahoma for Rx Depot.

The company's Web sites, www.rxdepot.com and www.rxofcanada.net, no longer appear on the Internet.