RX RAGE AS INDIANS SELL CHEAP DRUGS By KENNETH LOVETT

December 23, 2002 -- EXCLUSIVE

ALBANY - An upstate Indian group has gone into the mail-order pharmaceutical business, proudly undercutting New York pharmacies by as much as 40 percent on popular brand-name prescription drugs.

The practice raises questions over whether it violates federal law on the importation of prescription drugs, and raises the ire of jittery pharmacists in the state who say they are at a competitive disadvantage.

The group of Seneca Indian businessmen serve as brokers, taking prescription orders from non-Indians at their business on the Seneca reservation in western New York via e-mail, phone, fax or mail.

The orders are transmitted to a "virtual" office the Indians set up in Canada, where hired pharmacists purchase the drugs at lower costs from Canadian wholesalers, fill the prescriptions, and ship them directly to the U.S. customers, the group's attorney, Tim Toohey, said.

The federal Food and Drug Administration prohibits the import of Canadian drugs, but has been lax on enforcing the ban as it pertains to Internet sales, experts say.

"There is some question of the legality, but it's one of those murky questions," Toohey conceded.

He added: "If someone is paying $350 a month for prescription drugs and can save $100 a month and they're comfortable with the safety factor, it would be hard for me to say, ‘Don't do it.' "

The venture originates out of the Seneca Trading Post, which already operates a separate business supplying online, tax-free cigarettes.

It is the first time members of a tribe located within New York's borders have offered prescription drugs to the general public.

The Mashantucket Pequots, which run Foxwoods Casino in Connecticut, have been doing it for several years and make millions.

"The Indians are getting in because they know they can do it and there is a market for them to make some money, just like they did with gas, casinos and cigarettes," said Michael Burgess, executive director of the Statewide Senior Action Council, a grassroots advocacy group.

The Indian business is also tax exempt.

Steven Weingarten, a lobbyist for the state's chain drug stores, says if allowed to continue, the Indian business will drive out many New York pharmacies.

Crystal Wright, of the National Association of Chain Drug Stores, said she believes the Indian group is violating the law.

-- Anonymous, December 23, 2002