December 2003
Beyond the Prairie Pantry Restaurant, past the Mohawk Oil ethanol plant, in a converted agricultural-supply store, a team of Mediplan Health pharmacists sifts through a stack of prescription-drug orders. Packages of brand-name blood thinners line the shelves of a metal wall unit. Huddled in a corner of the warehouse, town elders scribble personal thank-you notes to grateful customers.
Mark Rzepka, 27, a co-founder of this Internet pharmacy, quietly steps out of his tiny office to survey his domain. Garbed in a frat-boy uniform of sneakers, baseball cap and baggy jeans, Rzepka hardly cuts the figure of modern-day gladiator. But the baby-faced entrepreneur is proof that looks are deceiving. Mediplan Health might be a relatively small outfit nestled in some forgotten corner of the prairies–Minnedosa, Man. (pop. 2,400)–but the company is standing firm in a battle royal with some of the most powerful pharmaceutical companies in the world.
And so far, Mediplan and several other online pharmacies are winning. They’re doing that by selling name-brand pharmaceutical drugs via the Internet from Canada, where prices are regulated and the dollar is relatively low, to people in the U.S., where there are no price controls and prices are sky high. The trade of the nascent industry, estimated at $ 1 billion, has made the Canadian online firms into modern-day Robin Hoods in the eyes of cash-strapped Americans in need of those medicines. And though the sale of drugs over the border is technically illegal, it has caught the attention of U.S. officials interested in saving money by using the Canadian companies to supply their public health plans. The trade has infuriated global pharmaceutical giants, who argue that without the hefty revenues they collect in the U.S., they would not be able to bear the formidable costs of developing new drugs. And the Canadian online stores have also raised the ire of the U.S. Food and Drug Administration (FDA), which is worried about the possible–but unproven–safety issues surrounding the purchase of medicines from Canada.
Scrapping with Big Pharma isn’t what Rzepka planned to do with his life. After graduating from the University of Manitoba’s pharmacy program in 1999, Andrew Strempler, Rzepka’s best friend, purchased a walk-in drugstore in Minnedosa, 203 km Northwest of Winnipeg. Unable to compete with the small town’s existing pharmacy and verging on bankruptcy, Strempler decided to try his hand at selling Nicorette gum to Americans on eBay. Online sales skyrocketed, prompting Strempler to enlist his college buddy and fellow pharmacist Rzepka. Together the two converted the Main Street walk-in into a full-fledged cyberdrugstore, known on the Internet as RxNorth.com. Mediplan’s warehouse sits only a few blocks yonder.
Today Mediplan employs nearly 250 people, and this year’s sales revenues will top $ 69 Million. Two thousand prescriptions–faxed and snail-mailed from uninsured and ailing Americans–are filled daily. The average order amounts to $ 300, and customers can expect to reap savings of as much as 80% on such senior-citizen elixirs as Lipitor, Vioxx and Celebrex.
Last month Mediplan opened a new plant 250 km to the Southeast in Niverville (pop. 2,300). At best, the new facility will bring 75 jobs and generate nearly $ 25,000 a year in tax revenue. At worst, Mediplan’s new branch will bring worldwide notoriety to a town whose greatest claim to fame to date has been that it’s where the province’s first grain elevator was built. Already pharmaceutical giants GlaxoSmithKline, Pfizer, Eli Lilly and AstraZeneca have stopped supplying drugs to Canadian Internet pharmacies that sell prescription drugs to U.S. citizens, forcing companies like Mediplan to purchase drugs from bricks-and-mortar pharmacies at a markup of 15% to 20%. And in the past few months, some drug companies have raised prices nearly 8% on popular medication
