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‘Greed is a powerful weapon’: Are illegal kickbacks in Ontario driving up the cost of your generic drugs?

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A hidden camera investigation and confidential documents obtained by CBC’s The Fifth Estate raise questions about whether Canada’s largest pharmaceutical distributor is profiting from illegal kickbacks on sales of generic drugs in Ontario.

Studies have shown this practice drives up the cost of generic drugs for all Canadians.

McKesson Canada, which distributes pharmaceutical drugs to more than 8,000 pharmacies in this country and recently purchased more than 400 Rexall pharmacies, denies the allegation.

The Canadian company is a subsidiary of the San Francisco-based McKesson Corporation, which is No. 6 on the Fortune 500 and the largest pharmaceutical distributor in North America, delivering one-third of all medications used every day, according to its website.

AFifth Estate hidden camera investigation captured conversations with three independent pharmacists at two pharmacies who suggest McKesson is breaking the law in Ontario, where kickbacks on generic drugs are illegal.

“[McKesson] gives the numbers to [our buying group], they consolidate the numbers and give me 50 per cent back,” one Ontario-based pharmacist told a generic drug salesperson working undercover for The Fifth Estate.

The conversation raises the question of whether this pharmacist is getting a 50 per cent kickback from McKesson Canada.

In other words, for every $10 in drugs this pharmacist sells, he would be able to put $5 in his pocket. In exchange, the pharmacist or his buying group would agree to stock the generic drugs McKesson distributes, giving the company sales ahead of a competitor.

McKesson Canada is a subsidiary of the U.S. McKesson Corporation, which is No. 6 on the Fortune 500 and the largest pharmaceutical distributor in North America. (John Badcock/CBC)

It’s a practice that studies have shown dramatically inflates the prices of generic drugs for Canadians, who pay some of the highest generic drug prices in the world.

“Greed is a powerful weapon,” said Paul Bailey, president of the Police Pensioners Association of Ontario, a group with many members who live on tight budgets with small police pensions.

He reviewed hidden camera footage captured by The Fifth Estate that also showed several pharmacists in Ontario asking for kickbacks.

“Once again, the taxpayer takes it on the chin,” he said.

Banned in 2013

The practice of paying or receiving rebates or kickbacks in exchange for stocking a particular brand of generic drug was regulated in Ontario starting in 2006 as part of efforts to reduce the price of generic drugs.

A full ban on rebates — direct or indirect — in the province came into effect in 2013. Quebec is the only other province or territory in the country that has restrictions on rebates.

Generic prices have come down since 2006, but Canadians are still paying the second-highest amount among OECD countries for their generic drugs, according to a recent government report.

Along with conducting the hidden camera investigation, The Fifth Estate obtained an internal McKesson presentation given to its employees, as well as a confidential document filed in a hearing at the Ontario College of Pharmacists.

Both documents raise the same question: Is McKesson Canada profiting from illegal kickbacks in Ontario?  

Are they giving kickbacks to independent pharmacists in Ontario in order to secure sales or collecting kickbacks from generic drugs manufacturers in exchange for stocking a particular brand in their own Ontario stores?

“People don’t know they’re getting ripped off and the reason they’re paying the high drug costs,” said Bailey.

McKesson Canada denies allegations

The Police Pensioners Association of Ontario first became interested in rebates in 2009 when several generic drug makers, wholesalers and a pharmacy were caught in a rebate scheme.

Bailey, a former police detective, called for a criminal investigation at the time. He’s now more convinced than ever that drastic action is required.

Paul Bailey, a former police detective and current president of the Police Pensioners Association of Ontario, says a public inquiry is needed into pharmaceutical rebates. (John Badcock/CBC)

“The only way we’re ever going to get to the bottom of this is to have a public inquiry.”

The Fifth Estaterequested an interview with McKesson Canada president Paula Keays, but she would only provide a written statement.

Keays acknowledged the company makes payments to the pharmacies it supplies with generic drugs, but denied they are illegal kickbacks or rebates.

McKesson Canada president Paula Keays acknowledged in a written statement that the company makes payments to the pharmacies it supplies with generic drugs, but denied they are illegal kickbacks or rebates. (McKesson Canada)

“McKesson Canada does not pay rebates in Ontario and any assertion to the contrary is blatantly false,” she said in the statement.

The payments its company makes, she said, are “fully in line with all current provincial regulations and [are] one of the ways independent pharmacies operate and improve services for patients, like installing blood pressure monitoring stations, introducing new technologies and automating services to allow for patient counselling. These are standard business agreements and are entirely appropriate.”

Going undercover

A Fifth Estate investigation in March 2018 revealed that Costco was demanding millions of dollars in illegal rebates from a generic drug manufacturer.

After that story aired, The Fifth Estate received an email from someone with many years of experience in pharmaceutical sales suggesting the problem goes far beyond Costco:

“It’s not just Costco…. Every single pharmacy across the country takes kickbacks in a monetary form still to this day. I am a former rep and can definitely say that this happens. It is still happening and will continue to happen.”

In order to test whether pharmacists in Ontario would ask for illegal kickbacks or disclose if they are receiving kickbacks, the insider agreed to help The Fifth Estate and go undercover as a salesperson. Because he still works in the industry, The Fifth Estate agreed to protect his identity.

CBC’s graphics department created a fake drug company website for The Fifth Estate’s hidden camera investigation. (David Abrahams/CBC)

“The problem is, everyone’s driving these rebates up. It’s a competition,” he told The Fifth Estate in an interview.

“Basically it’s a race to the bottom, if you will. You know, I’ll offer more points than the next guy that just came in before me. And that’s driving the cost of the pills up. It’s just not fair.”

The Fifth Estate created a fake generic drug company called Dari Pharmaceuticals and made business cards, a product list and a website.

Over three days, The Fifth Estate visited 17 independent pharmacies in Kitchener, Cambridge and Hamilton and spoke to nine pharmacy owners who were interested in buying generic drugs. All but one asked if the fake company paid illegal rebates.

‘Incentives to move their stuff’

Several pharmacists also openly discussed their current arrangement, claiming they received illegal kickbacks from large companies.

“Let’s say if you buy 1,000, for example, there is a rebate of 50 per cent,” one pharmacist told The Fifth Estate‘s undercover salesperson, referring to his current arrangement with McKesson Canada.

“[Other companies] go higher [than 50 per cent] to give incentives to move their stuff,” said another pharmacist. “Some days they go to 60 [per cent], some days they go to 70 [per cent].”

Some pharmacists wanted to know how The Fifth Estate‘s fake company would deliver its kickbacks while others talked about technical wording that could be used to hide a kickback and get around the law in Ontario.

So basically [a middle company] cuts us a cheque every month and it’s … not technically a rebate, it’s more … for professional services and what have you, right,” another pharmacist said. “That’s how most people are wording it nowadays.”   

Business cards and a product list were created for the fake generic drug company called Dari Pharmaceuticals. (CBC)

An internal McKesson Canada document obtained by The Fifth Estate suggests the company also uses a variety of terms to describe payments it makes to pharmacists.

The PowerPoint presentation from 2017 instructs employees to remove the word “rebate” from their “vocabularies,” while other terms like “professional allowances” should be “used with caution.”

The presentation does say rebates are illegal in Ontario but goes on to say the pharmacy brands McKesson owns, like Guardian or IDA, make payments to pharmacies under a variety of circumstances.

“All four main McKesson banners make payments to its pharmacies, but for different things, under different names and under different circumstances. Sometimes we use the same words to mean different things.”

CBC asked McKesson about the presentation and the company denied the document suggests it’s paying kickbacks or rebates that are illegal in Ontario.

“As could be expected, our various retail banners compensated their respective members for different things, under various names, prior to their acquisitions by McKesson Canada,” the company said in a statement.

“Accordingly, a main driver of the project reflected in the presentation was to ensure McKesson Canada’s rigorous corporate practices are mirrored across all McKesson Canada banner operations. The references to Ontario throughout the document reinforce the fact that rebates are illegal, and McKesson Canada does not pay them.”

A senior pharmacy insider interviewed by The Fifth Estate doesn’t buy it.

“You have to have so many terms because you want to complicate it,” the former executive said. The Fifth Estate agreed to protect his identity because he still works in the industry.

“You don’t want people to follow the money. No matter what you call it,” he said, “money that is going from the manufacturer to the pharmacy at the end of the day is a rebate.”

Rebates disguised as advertising?

When Costco was caught demanding kickbacks, a document filed at a hearing of the Ontario College of Pharmacists alleged that other pharmacy chains were also potentially breaking the law.

The Fifth Estate filed a motion to see exhibits filed at the hearing and after many months received most of the documents.

A letter from Costco’s lawyer to the investigator for the college said: “It should be noted that advertising in the form challenged by the complainant are common for pharmacies in the industry generally.”

The lawyer goes on to allege that four other large pharmacy chains that operate in Ontario pay potentially illegal rebates disguised as advertising fees, including Guardian and Rexall.

Guardian is one of McKesson’s independent retail pharmacy banners and Rexall is fully owned and operated by McKesson.

CBC was unable to confirm the allegations, so approached McKesson for an explanation. Again, McKesson Canada said it’s not doing anything to break the law in Ontario.

“To be abundantly clear: McKesson Canada does not pay prohibited rebates in the province of Ontario,” the company added in its statement. “Any reporting otherwise would be false and inaccurate.”

Millions could be saved

Canadians have for decades paid some of the highest prices for generic drugs in the world. In the mid-2000s, the Competition Bureau of Canada was one of the first to take a detailed look at why.

“Lots of people had theories but we wanted to clarify how the generic market was working and functioning and how it was broken,” said lead investigator Mark Ronayne.

Two reports, one in 2007 and another in 2008, determined the practice of paying kickbacks was widespread in Canada and was costing Canadians hundreds of millions of dollars every year.

“The rebates paid to the pharmacies have accounted for a large portion of payers’ generic drug costs, 40 per cent or more of generic drug expenditures,” the reports concluded.  

Mark Ronayne was the lead investigator on two reports for the Competition Bureau of Canada in the mid-2000s that looked at competition practices in the Canadian generic drug sector and made recommendations for changes. (John Badcock/CBC)

“Canadian taxpayers, consumers and businesses could save up to $800 million a year if changes are made to the way private plans and provinces pay for generic drugs. The potential savings could climb to over $1 billion per year in coming years, as several blockbuster brand name drugs lose patent protection.”

Ronayne believes “powerful interests” blocked change in Canada, which is why the practice of paying kickbacks continues to this day.

“If there’s money to be made by providing a lower price somehow to pharmacies to somehow get your product on the shelf, then companies will look for some way to do that,” said Ronayne.  

“Maybe not necessarily consistent with legislation or could be consistent with legislation but they’re going to try to do it. And they’ve been doing that for a long time and if they are continuing to do that, I wouldn’t be terribly surprised.”

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Herbal remedies: Saw palmetto for hair loss prevention

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(Natural News) Saw palmetto is a small, shrub-like palm endemic to the United States. Known for its medicinal properties, saw palmetto has been used for centuries to treat reproductive issues and hormonal imbalance.

Today, saw palmetto is used as an ingredient in many hair growth products and supplements, as it is thought to prevent hair loss. This could be due to saw palmetto’s influence on the hormones that dictate hair growth.

Saw palmetto for hair loss

There is evidence to suggest that saw palmetto can help treat hair loss and prevent its occurrence. According to a 2012 study, saw palmetto could inhibit 5-alpha reductase (5-AR). 5-AR converts testosterone, a male sex hormone, into a more potent hormone called dihydrotestosterone (DHT).

Research shows that high levels of DHT can shrink hair follicles and result in hair loss. DHT also makes it harder for hair follicles to grow new hair once the old hairs fall out. By inhibiting 5-AR, saw palmetto blocks the conversion of testosterone to DHT.

In another 2012 study, researchers evaluated the effects of saw palmetto supplementation in men with mild or moderate androgenetic alopecia, or male-pattern baldness. One group received 320 milligrams (mg) of saw palmetto every day for two years, while another group took one mg of finasteride, a conventional drug used to treat hair loss.

The results showed that 38 percent of participants who supplemented with saw palmetto experienced improvements in hair growth, compared to 68 percent of those who supplemented with finasteride.

While the experiment showed that finasteride was more effective, the researchers noted that saw palmetto may be less likely to work in people with more severe cases of hair loss. More research is needed to confirm this.

Saw palmetto is available in several forms, including oral supplements and hair care products like conditioners and shampoos.

Due to limited research on the use of saw palmetto for hair loss, there is no official recommended dosage for it. That said, a study published in the Journal of Cutaneous and Aesthetic Surgery cited a recommended dosage of 160 mg twice daily for saw palmetto tablets. Researchers often use this dosage when studying with saw palmetto.

Take note that saw palmetto has been reported to sometimes cause mild side effects, such as headaches and stomachaches. If in doubt about using saw palmetto, consult a natural health practitioner.

Other natural remedies for hair loss

Hair growth depends on several factors, including a person’s genetic makeup. Still, some home remedies might help prevent hair loss and/or encourage hair growth. These remedies include:

  • Jojoba oil – Jojoba oil helps nourish hair follicles without leaving any residue behind. It also stimulates hair cells to grow faster.
  • Aloe vera – Aloe vera helps get rid of sebum buildup in the scalp. Sebum is a natural oil that helps keep the scalp moisturized. It can build up on the scalp and clog hair follicles due to poor hair hygiene.
  • Garlic – The pungent compounds in garlic help increase blood circulation in the scalp, which stimulates hair growth. These compounds also stimulate the synthesis of collagen, a protein that gives structure to hair.
  • Onion – Like garlic, onions boost blood flow in the scalp for better hair growth.
  • Licorice root – Licorice root helps relieve dry and irritated scalp. It also strengthens weak follicles.
  • Rosemary oil – Rosemary oil has antiseptic properties. It is ideal for treating scalp issues that slow hair growth, such as dandruff and bacterial infections.
  • Coconut milk – Coconut milk helps moisturize a dry scalp, which is a leading cause of hair loss.
  • Apple cider vinegar – Apple cider vinegar works as a clarifying agent, ridding the scalp of extra sebum and other residues that can clog hair follicles and inhibit hair growth.

Some hair loss is natural. But for mild to moderate cases of hair loss, it might help to use herbal remedies, such as saw palmetto, to strengthen hair or encourage hair growth.

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Scientist that condemned coronavirus lab leak theory admits he squashed it to protect Chinese scientists

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(Natural News) An American scientist who criticized theories that the Wuhan coronavirus (COVID-19) might have accidentally escaped or leaked from a Chinese laboratory has admitted that he was denouncing the idea in order to protect Chinese scientists.

Dr. Peter Daszak, the president of the EcoHealth Alliance, a New York-based nongovernmental organization that conducts scientific and policy research regarding emerging diseases, led an endeavor in February 2020 to quash any kind of suspicion that COVID-19 might have accidentally escaped from the Wuhan Institute of Virology, a research and academic institution supported by the Chinese state.

This culminated in a statement published in the prestigious medical journal The Lancet that condemned the “conspiracy theories suggesting that COVID-19 doesn’t have a natural origin.”

The Lancet article was written during the very early stages of the global pandemic, during a time when there wasn’t any kind of rigorous research on the origins of the virus.

Daszak further reiterated his support for China in a statement released on Feb. 6, stating that he stands with other scientists to “strongly condemn conspiracy theories suggesting that 2019-nCoV does not have a natural origin. Scientific evidence overwhelmingly suggests that this virus originated in wildlife, as have so many other emerging diseases.”

In June, Daszak also wrote an opinion piece for the Guardian titled: “Ignore the conspiracy theories: scientists know COVID-19 wasn’t created in a lab.”

But on Friday, Jan. 15, Daszak’s spokesperson told the Wall Street Journal that his statement, which has been used to silence anybody with a dissenting opinion regarding the origins of the coronavirus, was published to protect Chinese scientists from criticism.

The Lancet letter was written during a time in which Chinese scientists were receiving death threats and the letter was intended as a showing of support for them as they were caught between important work trying to stop an outbreak and the crush of online harassment.”

WHO team heads to Wuhan to probe virus origin

The situation surrounding Daszak’s initial statements and his sudden retraction are being compounded by the fact that the doctor is part of an international 15-member team of experts sent by the World Health Organization (WHO)to Wuhan to figure out the origins of the coronavirus.

According to the WHO, the team’s official mission is to determine how, where and when the virus crossed from animals to humans.

Daszak has been tweeting about the mandatory quarantine period he and his team are going through. During day four of quarantine, he said that the day, like the previous days, is “packed” with virtual meetings.

Day 6 of quarantine lockdown in Wuhan & it’s that special time for our friendly health care workers to swab for our PCR tests – they go deep, but they’re very cheerful about it. Xie xie! pic.twitter.com/QvKzgC0Lng

— Peter Daszak (@PeterDaszak) January 20, 2021

Peter Ben Embarek, team leader and WHO food safety and animal diseases expert, said that the team will be granted permission “to move around and meet our Chinese counterparts in person and go to the different sites that we want to visit,” once they’re done with the mandatory quarantine period.

It is unclear whether the WHO team will be looking into the Wuhan Institute of Virology and the theory that the coronavirus was engineered. Embarek has stated his desire to visit the “famous Wuhan market” to try and determine “everything that went in and out” of there in the weeks before the first confirmed cases.

Embarek is referring to the Huanan Seafood Wholesale Market in Wuhan, where many wild animals were often sold. This place is being investigated as a likely setting for the supposed “animal-to-human jump” of the coronavirus, or a place where that jump was accelerated.

“We know the virus originated in bats at some point, and then we know that human cases appeared in Wuhan in December 2019,” said Embarek. “But what happened in between, how many other animal species were involved in between, and where, remain to be found in more detail.”

“We don’t really know what happened in that period of time, and that’s what we are looking out for.”

Questions will remain regarding the role of the institute in the initial outbreak; questions that will continue to linger if WHO team does not conduct its investigation.

Then-Secretary of State Mike Pompeo even said that the government has reason to believe that several researchers working for the institute “became sick in autumn 2019, before the first identified case of the outbreak, with symptoms consistent with both COVID-19 and common seasonal illnesses.”

Pompeo said that this calls into question the claims made by Shi Zhengli, the institute’s senior researcher on bat-related viruses, that there had been “zero [COVID-19 or SARS-related] infection” among the institute’s student body and staff.

Pompeo noted that the possibility of an “accidental infection” in a lab is more likely than people might think, especially considering that such an incident has already occurred in China. In 2004, a SARS outbreak in Beijing that infected nine people and killed one originated in a research facility.

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California healthcare workers suffer severe allergic reactions following coronavirus vaccination

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(Natural News) Six healthcare workers suffered allergic reactions after getting a shot of Moderna coronavirus vaccine in San Diego, California. Their symptoms were considered severe and required medical attention.

The doses administered to the six healthcare workers were part of the Moderna Lot 041L20A distributed to 287 providers across the state earlier this month. That batch of shipment, which arrived in California between Jan. 5 and Jan. 12, is composed of 330,000 shots.

Moderna said in a statement that it is cooperating with California’s health department to investigate the allergic reactions.

“Moderna acknowledges receiving a report from the California Department of Public Health (CDPH) that a number of individuals at one vaccination center were treated for possible allergic reactions after vaccination from one lot of Moderna’s Covid-19 vaccine,” the statement read. “The company is fully cooperating with CDPH in investigating these reported adverse events.”

Dr. Erica Pan, California’s state epidemiologist, said Sunday, Jan. 17, that providers should err on the side of caution and stop using the doses until federal, state and company officials finish an investigation.

“Out of an extreme abundance of caution and also recognizing the extremely limited supply of vaccine, we are recommending that providers use other available vaccine inventory and pause the administration of vaccines from Moderna Lot 041L20A until the investigation by the Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), Moderna and the state is complete,” she said.

Monterey, Santa Clara and Santa Cruz have already paused distribution while two Covid-19 vaccine clinics have been canceled in Stanislaus County following the allergic reaction reports.

The delay was a huge blow to California’s vaccine distribution efforts. California currently has the second highest number of coronavirus cases per capita in the United States, with Los Angeles being a particular hotspot.

All cases of apparent allergic reactions occurred at San Diego County’s drive-through mass vaccination site at Petco Park. No other providers have reported allergic reactions to vaccines administered from the same batch of doses.

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