Federal Judge Orders Rx Depot To End Operations

Judge Claire Eagan of the U.S. District Court in Tulsa, Okla., on Thursday issued a preliminary injunction that requires Oklahoma-based storefront pharmacy chain Rx Depot to end operations as part of a lawsuit filed against the company by the Justice Department, USA Today reports (Appleby, USA Today, 11/7). In the lawsuit, the Justice Department alleges that Rx Depot, which helps U.S. residents purchase lower-cost prescription drugs from Canada, violated a federal law that allows only prescription drug manufacturers to import medications into the United States. Attorneys for Rx Depot, which has 85 storefront pharmacies in 26 states, maintain that that company does not violate the law because the storefront pharmacies only fax or mail prescriptions to Canada; Canadian physicians rewrite the prescriptions, and Canadian pharmacies send the medications directly to customers and pay commissions to the storefront pharmacies (California Healthline, 10/14). Rx Depot attorneys also maintain that because the FDA does not prosecute individuals who purchase prescription drugs from other nations, the Justice Department should not prosecute companies that help U.S. residents with the practice (Wilde Mathews, Wall Street Journal, 11/7). However, Eagan wrote in her decision, "It is reasonable for the FDA to marshal its limited resources against large-scale commercial operations like Rx Depot rather than small-scale individual violators" (USA Today, 11/7). Eagan also wrote that Justice Department prosecutors have "conclusively shown that the relevant statutory provisions explicitly prohibit exactly what the defendants continue to do," adding that Rx Depot established "a nationwide business based on violating the law." In addition, she wrote that prescription drugs purchased from Canada "do not have the same assurances of safety and efficacy" and "their quality is less predictable" than those purchased in the United States (Wall Street Journal, 11/7). Eagan ordered Rx Depot officials to inform customers within 10 days that the company is in violation of federal law (USA Today, 11/7).

Carl Moore, president of Rx Depot, said that the company will "immediately appeal" the decision, the Journal reports. "We've lost this round, and it continues. There are other rounds to go," Moore said. He added that Rx Depot would cooperate with the decision in the event that an appeals court does not stay the preliminary injunction (Wall Street Journal, 11/7). FDA Associate Commissioner William Hubbard said that the decision and the cost of prescription drugs "points out the need for Congress to take action to get affordable drugs to seniors" through Medicare, the Miami Herald reports (Dorschner, Miami Herald, 11/7). FDA Associate Commissioner Peter Pitts added that the decision "should really send a message that we need real Medicare reform" to provide beneficiaries with access to prescription drugs. However, Rep. Rahm Emanuel (D-Ill.), who cosponsored legislation to allow the purchase of prescription drugs from Canada, said that the decision "will only resolve the members who want to get" such a bill passed (Wall Street Journal, 11/7). CBS' "Evening News" on Thursday reported on the decision. The segment includes comments from Springfield, Mass., Mayor Michael Albano and Moore (Axelrod, "Evening News," CBS, 11/6). The full segment is available online in RealPlayer.

In related news, the FDA on Thursday sent a letter to officials at Ontario-based CanaRx, which sells prescription drugs from Canada to U.S. residents, to inform them that company operations are in violation of U.S. law and that the agency may move to block company shipments, the AP/Washington Post reports (AP/Washington Post, 11/7). CanaRx supplies prescription drugs to a Springfield, Mass., program, under which 20,000 city employees, retirees and their dependents who receive health insurance from the city can fax their prescriptions to a group of Ontario pharmacies and receive their medications in the mail (California Healthline, 9/17). Hubbard said that the FDA has partnered with Canadian officials to address the issue but did not announce when the agency may take action against CanaRx (AP/Washington Times, 11/7). Hubbard said that CanaRx, although based in Canada, could face a civil lawsuit in the United States "in absentia," the Boston Globe reports (Rowland, Boston Globe, 11/7). However, Anthony Howard, president of CanaRx, said that the company is "not breaking any laws in Canada or the United States." Albano said, "We are not intimidated" by the FDA letter in Springfield (AP/Washington Times, 11/7).

The Globe also reports that the FDA may prosecute state and local governments that establish programs to purchase prescription drugs from Canada. FDA Commissioner Mark McClellan said in a press release, "We are ... committed to enforcing the law against those, whether governmental or private, who endanger Americans by profiting from 'buyer beware' schemes to import illegal, unapproved and potentially risky medicines" (Boston Globe, 11/7). "Programs that states set up are likely to be illegal for the same reasons that the court found Rx Depot to be illegal," McClellan added (USA Today, 11/7). However, the Globe reports the press release appears to "contradict a stance articulated last month" by an FDA official; on Oct. 23, Hubbard said, "We're not considering legal action against cities or states." Hubbard said Thursday, "What I was trying to say was we have not specifically considered any action against any other government, because it's hypothetical, because it's a moot point. The only government that's doing anything is Springfield." Albano accused the FDA of a "flip-flop" on the issue, adding, "It doesn't surprise me given the inconsistency on this position all along" (Boston Globe, 11/7).