Feds Ask UPS, FedEx for Canada Drug Crackdown

January 12, 2004 (PLANSPONSOR.com) - Two massive delivery companies outlined their plans to federal lawmakers to crack down on Canada prescription drug reimportation companies.

FedEx Corp. and United Parcel Service Inc (UPS), in addition to credit-card companies Visa International and MasterCard International Inc. were asked by the US House of Representatives’ Energy and Commerce Committee to show what they are doing to stop the flow of prescription drugs from Internet store fronts offering medications at discount prices via Canada. FedEx and UPS, together, carry approximately three-quarters of all air and ground parcels in the nation, according to a Wall Street Journal report.

In response, UPS told federal lawmakers that law-enforcement officials are notified whenever the company discovers a shipment containing illegal drugs. Additionally, UPS is trying to “discourage” Internet pharmacies that appear to be defying US from using the parcel service.

Similarly, FedEx told the House committee it has stepped up efforts to go after Internet pharmacies that use its logo on their Web sites, which FedEx does not allow. Additionally, FedEx “ceased doing business” with a handful of undisclosed Internet pharmacies. The panel is waiting for formal responses from Visa and MasterCard.

The push to root out illegal drugs by the two companies comes amid growing scrutiny of the delivery industry’s role as a middleman in the drug-supply chain. Some lawmakers and regulators are worried that FedEx and UPS are irresistible targets for sellers of controlled substances and importers of large amounts of prescription drugs.

On the other side of the equation,a steadily growing roster of governors and mayors have increased pressure on the US Food and Drug Administration (FDA) to allow state and municipal governments to do what some older Americans have been doing on their own for years: filling prescriptions in Canada, where regulations make prices 30% to 50% lower. Even as FDA officials have reiterated their worries about the safety, security and reliability of the practice, lawmakers in some Midwestern states and in Northeastern cities, including New York (See Big Apple Mayor Wants to Harvest Drugs From Canada ), have publicly discussed strategies for pursuing the idea.