While the world is focused on swine flu, some well-known wholesalers and manufacturers are being accused of participating in a drug recycling and reimbursement scheme in Canada.
According to Monday's press release from the Ontario Ministry of Health and Long-Term Care:
"The audits found that some pharmacies have been purchasing a greater amount of generic drugs than they require, collect professional allowances on the full amount, and then return what they don't need to the wholesaler. The wholesaler then re-sells the product, triggering a second professional allowance payment. This scheme enables professional allowances to be collected multiple times."
Yikes.
Four wholesalers – AmerisourceBergen Corp. Canada, Kohl and Frisch Ltd., A.O.C. Company Ltd. and Pharmastop – are facing fines totaling $26 million. Generic drug makers Taro Pharmaceuticals Inc., Cobalt Pharmaceuticals Inc., Genpharm Inc., Novopharm Ltd., Ratiopharm Inc., Pharmascience Ltd. and Sandoz Canada Inc. were also fined by the province. (Source)
Keep in mind that generic drugs are significantly more expensive in Canada than the U.S. according to a study by the Fraser Institute (Canada's Drug Price Paradox 2008). A 2004 FDA white paper draws the same conclusion (Generic Drug Prices in the U.S. Are Lower Than Drug Prices in Canada). However, this report from the Canadian Generic Pharmaceutical Association disputes the Fraser results.
I assume more details will be forthcoming.