Sidebars:

#1 - The Odyssey

One evening in January a FORBES reporter flew into London's Heathrow airport, suffering from a sinus infection. He made his way to the late-night Bliss Chemist on Marble Arch, where his doctor had previously called in a scrip for 625mg tablets of Augmentin, an antibiotic made by GlaxoSmithKline. The pharmacist handed over a box of 21 pills. The stickers plastered on the box did not entirely cover the Greek lettering underneath.

The pills left Glaxo's factory in Mayenne, France on Sept. 12, 2003 en route to Glaxo's Greek company and a local wholesaler. It's not clear if the Greek wholesaler resold the drugs to Britain directly or sent them through other intermediaries, but ultimately they wound up at O.P.D. Laboratories Ltd., a Hertfordshire, England parallel trader. The licensed U.K. arbitrager repackaged the box with English labels and inserts and sold it on to the West End pharmacist.

#2 - Robin Hood on 10% Commission

In April 2001 the FDA and U.S. Customs studied prescription drug movement at seven U.S.-Mexico border crossings. They detected 586 people bringing in 1,120 drugs over four hours; just over half held valid U.S. or Mexican prescriptions. But crossing the border for bargains is such an inconvenience. Nowadays the most popular way to buy is over the Internet. And for customers who find even that too intimidating, there is yet another way to get low prices: Go to a middleman.

Ameri-Can Discount Center.com, just outside Philadelphia, is such a go-between. The storefront, run by Darryl Stein, a former IBM system engineer, and Ronald Cerota, a security systems executive, helps customers in the Philadelphia area get in touch with CanAmerica Drugs of Manitoba. One recent day in February they were helping an elderly Russian émigré with her prescription for four drugs, including Altace and Zocor. They faxed her U.S. prescription to Canada, helped her fill out the exhaustive questionnaire that a Canadian doctor needs in order to write her scrip north of the border and mailed in her check for $713. The pills were to arrive in the mail in about two weeks. The two men will follow up several weeks before her 90-day supply runs out with a reminder to reorder.

"We're like Robin Hood," says the 40-year-old Stein.

Sort of. The two entrepreneurs get a fee of 10% of all sales they steer to the Canadian Web pharmacy or to a mail-order provider of generics in the U.S. (Generics are generally more expensive north of the border.) It's not easy, they claim. They started a year ago with $40,000 in savings, but have since taken out a small home-equity loan as they approach break-even: 700 customers are generating $6,000 to $8,000 a month in commissions.

It's not just the newly self-employed who are interested in the business. Politicians are getting into the act. Springfield, Mass. and Montgomery, Ala. openly defy the Federal Food, Drug & Cosmetic Act by arbitraging drugs from Canada on behalf of municipal employees. Boston Mayor Thomas Menino says he wants to start reimporting Canadian stocks in July. If a band of like-minded New England officials gets permission--they are waiting to hear from the U.S. Department of Health & Human Services--they will start offering bargains to 100,000 residents on a trial basis. The Boston pilot project alone should save $1.5 million a year, 3% of the city's drug spending.

"It's all about the consumers," Mayor Menino thunders. "If we were able to reimport drugs from Canada, which would give us a reduction in costs, don't you think the American drug companies would reduce their prices for drugs and follow suit?"

Price in London: $48. In downtown Philadelphia the antibiotic would have been dispensed in 500mg doses, with 21 pills retailing for $119.