About 15 storefront businesses across Florida claim to help thousands of customers each year place online orders from pharmacies in Canada and overseas for medicines at prices up to 70 percent off what people pay in the U.S. The reason is other countries regulate consumer drug prices — the U.S. does not — and some cheaper generic medicines are sold there before the U.S. market gets them.
Federal authorities say the practice is illegal and dangerous because the U.S. has not reviewed the safety of some drugs approved for sale in foreign countries or they could be counterfeit. But since the first storefront opened in 2002 in Delray Beach, Florida, the government has never charged shops or their customers, according to operators and researchers who follow the business.
The shops seemed to face a grim future 10 years ago when Medicare began covering prescription drugs, sparking expectations that seniors would no longer struggle to afford medications. "We thought that would be the end of the business," said Janelle Quinn, owner of Discount Med Company in St. Petersburg. The trade's surprising survival spotlights both seniors' continuing difficulties with medication expenses, and how far some people will go to save money.
Florida's storefronts are found in retirement havens, including areas of Tampa, Lakeland, Orlando, Melbourne and Miami. Similar operations exist in a few other states, but the Sunshine State is thought to have the most.
The most visible name is Canadian MedStore, which opened its first location in 2003 and now has six in central Florida.
Each one serves several hundred customers a year, about 80 percent of whom are over 65, according to co-owner Bill Hepscher. Most of them have Medicare coverage for prescription drugs, but the portion they still must pay, including copays and deductibles, is often a burden, Hepscher said. In addition to absorbing copays and deductibles, beneficiaries' expenses also rise if they hit the "donut hole" coverage gap in most Medicare drug plans, exposing them to higher out-of-pocket expenses for prescription drugs until those reach $4,850 annually.
The average retail price for 397 widely used drugs increased 81 percent from 2006 through 2013, compared with an 18 percent increase in inflation in the same period, according to AARP.
That climate drives the market for outlets like Hepscher's and Quinn's. "We are a resource for people who can't afford to pay for their medications," he said.
Savings of 60 to 70 percent are not uncommon, according to the storefront owners.
"A lot of time, we can get drugs for them at less than their copay," said Quinn.
About 2 percent of Americans, or 5 million people, buy drugs from foreign pharmacies, according to a federal survey in 2011. The nonprofit Canadian International Pharmacy Association, which verifies the legitimacy and safe practices of online pharmacies outside the U.S. that sell to Americans and Canadians, estimates its members' 64 websites supply about 1 million U.S. customers a year.
Many consumers do their own online buying from foreign pharmacies. Canadian MedStore and other storefront operators target an older generation interested in buying medicines abroad but who lack computer savvy and are insecure about buying online by themselves.
Hepscher mainly ordered drugs from pharmacies in Canada when he started. A few years ago, he began doing business with pharmacies in England, New Zealand and India because the prices were lower than Canada. On top of that, Canadian supplies of some drugs tightened about eight years ago when drugmakers cut back sales to Canadian pharmacies to prevent them from filling so many U.S. orders.
Storefront owners say they use only foreign pharmacies certified by government agencies or the nonprofit Canadian association. The drugs themselves, some point out, are often made in the same manufacturing plants around the world as drugs sold in the U.S. pharmacies.
Quinn and other storefront owners emphasize they are not pharmacies subject to many state and federal laws. "All I am is an order taker," she said. Customers must present valid prescriptions to place orders.
Unlike pharmacies, storefront operations don't stock medications. Instead, a few employees who work on computers in sparsely furnished offices assist customers in online ordering. Only chronic medications, the kind people take for months or years, may be obtained with the storefronts' help. Delivery usually takes two or three weeks.
Consumers pay the foreign pharmacies — in full by check or credit card since no insurance is involved — and the U.S. storefronts collect fees from the pharmacies.
First-time customers come to his shops to place orders, but they often call in subsequent ones, Hepscher said.
Retired nurse Evelyn Dumond, 74, was a recent customer at Canadian MedStore in Lakeland.