Internet-based pharmacies operating out of Canada have gained much business in the last few years. The ease of availability and competitive pricing have lured many customers from the United States to Canadian online pharmacies. As of 2005, of the more than 7000 pharmacies based in Canada, almost 270 were said to be operating either completely from the Internet or were using a combination of conventional and distance dispensing methods - including net-based retail.

Most of these firms operate from Western Canada and the industry employs nearly 7000 people. While the statistics may not seem overwhelming, the number of customers catered to by these online drug stores is quite significant. Of the total sales of pharmaceutical products, mail order drugs alone raked in upwards of $1 billion in sales in 2004. The online sites serve an estimated 2 million patients in the US including seniors and those without any insurance.

However, it has not been a smooth sail for the Canadian online pharmacy industry. It had to defend itself against the charges hurled from many quarters. Fears have been raised that Canadian doctors were rewriting prescriptions issued by US physicians. The Canadian Online Pharmacy industry has predictably denied all the allegations. According to them, Canadian physicians often review the prescription given by their US counterparts and do a double check on the patients medical background. In case of doubts, the Canadian physicians also revert back to the patients original physician based in the US.

The Federal Drug Administration has traced many companies selling drugs online. These were selling drugs to buyers in the US by claiming that such an act did not violate any Federal law and thus were completely legal.

According to a study, it was found that some of the Canadian online pharmacy stores were actually based in the US. These were operating illegally and were providing drugs under the guise of being Canada based online stores. Some US based pharmacies were also purchasing drugs from Canadian firms and selling them in US.

Further, the shipping and handling of these drugs have also raised safety concerns as some physicians in the US feel that temperature sensitive drugs were being imported without giving due attention to packaging detail. This could have serious implications for the safety and effectiveness of the drug being imported. Production concerns have also been raised in the US as some of these drugs may have been manufactured in bulk and a compromise on quality issues cannot be completely ruled out.

Now voices are rising in Canada itself to regulate the online pharmacy business. That country is now planning to modify the Canadian Food and Drug Act. There is a proposal to bring in an amendment that requires Canadian physicians to examine the patient physically before giving out prescriptions. This would also mean that Canadian physicians cannot rewrite prescriptions given by their US counterparts. This move has been criticized by the online pharmacy industry in Canada. The oft-quoted reason being the loss of jobs that may happen in wake of this amendment. The industry is also up in arms against being portrayed as practitioners of unethical and unprofessional business practices. Canada is also planning to crack down on pharmacies operating without the requisite Establishment License. Under Canadian laws, such a license is required for any commercial organization involved in fabrication, packaging, import, delivery, bulk sale and testing of drugs here. This law enables the government to trace the complete chain of sale of the drug from the manufacturer to the user in case of an adverse effect of a drug. It also enables faster investigation and framing of charges.

Strange as it may seem, though there is some distrust among the general US population for these pharmacy products, the number of online buyers for drugs is increasing every quarter. The industry has witnessed healthy growth rates in the past and unless Canada goes ahead and regulates it, this trend is expected to continue at least for the foreseeable future. US customers also seem to be aware of the fact that in case of adverse effects, there is no legal recourse available as it would be impossible to locate the seller of the drug. Buyers seem to be lapping up these drugs irrespective of the general feeling that there may be safety and other issues in purchasing them online.