Rx Drug Discounter Takes New Tack

(AP)  The co-founder of an Oklahoma prescription drug service shut down for violating federal drug importation laws has a new company providing discounted medicines over the Internet.

Web-based Integrity Meds has been connecting prescription drug buyers with a mail-order pharmacy in Texas at prices the businesses claim are at cost plus two small fees.

"On name brands, people can save some money, but on generics they're going to rub their eyes and check it again," David Peoples, Integrity Meds founder and co-founder of Rx Depot, said on Wednesday. "It's going to be a shock."

The Tulsa-based company connects customers to Carepharm, a mail order pharmacy in New Boston, Texas. If the customer mentions Integrity Meds, they get medications at cost, officials with both companies said.

Integrity Meds gets $1 per prescription from Carepharm, which gets new customers outside of the Medicare patients it usually targets plus a $10 dispensing fee per customer.

"We believe so strongly in this program," Carepharm founder and chief operating officer Dennis Schafer said. "People call us and they can't believe what they can save."

BJ Baker of Tulsa says Integrity Meds saves him between $130 and $140 a month on the five prescriptions he and his wife fill regularly. Three generic medications that once cost $105.57 per month now cost him $16.61, Baker says.

"It's a tremendous cost-saving," said Baker, 75, a telemarketer with chemical maker DuPont Co., who has no prescription drug benefit on the health coverage he buys.

Rx Depot, which Peoples founded with Carl Moore, faxed prescriptions to pharmacies in Canada that sent the drugs directly to customers at prices lower than they were available in the United States.

A federal judge shut down the company's 85 storefronts in November, ruling that Rx Depot violated laws allowing only manufacturers to import drugs for sale. U.S. District Judge Claire Eagan also said the safety of the imported drugs could not be verified by the U.S. Food and Drug Administration.

Rx Depot appealed the decision to the 10th U.S. Circuit Court of Appeals in Denver, arguing that its stores were not actually importing any medications. But last month the company dropped its effort to reopen the stores.

Schafer said Carepharm is licensed in Texas and other states and provides only FDA-approved drugs that were manufactured and distributed domestically.

Schafer estimated he gets about 70 percent of his orders now through Integrity Meds, which is helping to offset a smaller-than-expected number of elderly patients buying drugs through Medicare's new drug benefit.

The U.S. attorney's office did not immediately return a phone call seeking comment. FDA associate commissioner of policy and planning William Hubbard said he was not familiar with Integrity Meds operations.

Peoples said the $1 fee is enough to cover the costs of the handful of employees, fax machines and computers Integrity Meds has to pay for. The company also charges a fee to help elderly and poor people enroll in drug manufacturer's programs that provide free maintenance drugs, he said.

"We're doing what we deem to be the best situation that's allowed under the guidelines we all have to operate under," Peoples said. "It's the dollar store concept."