ST. PAUL, Minn. (AP) – Retired furniture store owner Don Brock quit buying prescription drugs from Canada this year, now that he’s signed up for the new federal Medicare drug benefit.

The next time he needs a refill on Lipitor, his daily anti-cholesterol drug, Brock will go to a pharmacy near his home in Litchfield. The 74-year-old says he was saving about $300 annually buying Canadian; now, he figures he’ll save about $500 buying through Medicare.

Canada is losing traction as a source of cheaper prescription drugs for many Americans. Cross-border sales have fallen as much as 30 percent, according to the Canadian International Pharmacy Association, since about 42 million seniors and disabled people became eligible for Medicare drug coverage Jan. 1, and the group says U.S. authorities have stepped up enforcement of laws against importing foreign medicines. Several state Web sites connecting residents with Canadian pharmacies have also seen business fall off.

“Medicare Part D won’t pay for any drugs out of the country, so I’ve had to stop that,” said Brock, who bought Canadian drugs for more than two years. “I am saving money on this.”

While Canadian pharmacists expect some of that traffic to return, they’re also considering marketing more heavily to some of the 45.5 million uninsured Americans who can’t afford to pay retail drug prices at home.

Canadian Internet pharmacies catering to American customers sprang up about six years ago, filling a market created by busloads of U.S. border-state seniors who came north seeking cheaper medications. Despite pressure from the pharmaceutical industry to enforce laws against the practice, U.S. regulators took a hands-off approach toward those who imported drugs for personal use, and some states turned to Canada to find savings.

Residents of New Hampshire, Illinois, Kansas, Missouri, Vermont, Wisconsin, Minnesota, North Dakota, Rhode Island, Washington and District of Columbia can access state government Web sites connecting them with select Canadian pharmacies, according to the National Conference of State Legislatures. Nevada is in the process of launching a site.

Experts say the Canadian pipeline won’t disappear.

“Seniors aren’t the only ones who use drugs from Canada,” said Stephen Schondelmeyer, who directs a pharmaceutical economics research institute at the University of Minnesota. “For the people who don’t have insurance somewhere else, Canada is still a very viable alternative.”

Some states have already moved in that direction.

I-SaveRx – the Illinois Web site that also serves residents of Kansas, Missouri, Vermont and Wisconsin – has kept business from declining by promoting the program to the working poor through small businesses, the state restaurant association, a low-income heating assistance program and health organizations, said Abby Ottenhoff, a spokeswoman for Gov. Rod Blagojevich.

In Minnesota, fewer people have been filling prescriptions through the state’s RxConnect Web site, which links them to Canadian and British pharmacies. But state employees are buying more Canadian medications through another program – saving the state and workers about $1 million over a 20-month period, according to the state Department of Employee Relations.

A spokesman for Gov. Tim Pawlenty defended the state’s RxConnect program, saying it’s helped thousands of people purchase cheaper drugs. Brian McClung said the program should continue, even though a group of Democratic lawmakers have called on Pawlenty to pull the plug, saying it’s not being used much and it’s taking away business from “Main Street” pharmacies.

“We’re open to additional ideas and techniques for bringing people affordable prescriptions, but you know, closing down the Canadian program wouldn’t fix anything,” McClung said.

While Andy Troszok, the president of the Canadian International Pharmacy Association, blames the business falloff mostly on Medicare, he said U.S. authorities have also stepped up seizures of Canadian shipments in the past month. That scares off some customers, though retailers typically reship such orders at no cost to the consumer.

Suzanne Trevino, a spokeswoman for U.S. Customs and Border Protection, said she didn’t have data to confirm whether or not more shipments were being seized. She said federal policy remains that it’s illegal to import pharmaceuticals.

Troszok, who also runs a mail-order pharmacy in Alberta, said he expects to get some of his older American customers back.

That’s because of the so-called “doughnut hole” in Medicare, which leaves enrollees on their own for drug costs between $2,250 and $5,100. American seniors could turn back to Canada for cheaper prescription medicine when they reach that hole – but they would do so knowing that Medicare wouldn’t give them credit for whatever they spent on Canadian drugs.

But, for some it would be cheaper still than paying American prices. Though growth has slowed in the past few years, drug spending here rose 7.2 percent in 2004, according to the Washington-based Center for Studying Health System Change, a nonpartisan research organization.

Americans spend an average of $728 per year on drugs – compared with $606 in France, $507 in Canada, and $261 in Ireland, according to 2003 figures from the Paris-based Organization for Economic Co-operation and Development.

All this makes Brock angry.

“You can get everything you want through fair trade and all this and that, except for the drugs that you can use,” he said.

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On the Net:

Canadian International Pharmacy Association: http://www.ciparx.ca/

Center for Studying Health System Change: http://www.hschange.org/

AP-ES-02-21-06 1613EST

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