Canada's Internet Sales to the U.S. Fall by Half

Canadian drugs sold to consumers in the U.S. via the internet last year were half what they were the year before, according to IMS Health researchers who blamed a variety of market factors for the dramatic plunge in sales volume.

Drug sales figures fell to $211 million in 2006 from approximately $420 million in 2005, IMS said in a report released last week.

Researchers tracked electronic drug sales from Canada to the U.S. and found that while online pharmacies posted more than $121 million in sales in the first quarter of 2005, their shipments plunged to approximately $40 million in the fourth quarter of 2006.

IMS Health Canada researcher Ian Therriault pointed to an unfavorable Canadian exchange rate, manufacturer-imposed supply restrictions and provisions under Medicare Part D that extend coverage to uninsured and underinsured beneficiaries for the sharp decline in online sales. He also blamed the media for its coverage of counterfeit and foreign drugs entering the U.S. market.

However, the figures for pharmaceutical sales within Canada were stable. In 2006, the number of prescriptions for brand drugs increased to 4.3 percent, IMS said. Overall, total sales of prescription drugs, brand and generic, grew by about 6.8 percent last year leveling off at $422.6 million.

Looking ahead, Therriault predicts the Canadian market will grow at an average rate of 7.5 percent annually, reaching $23.4 billion by 2010. He said oncology drugs and biological response modifiers, among others, would sustain market growth going forward.