Internet sales of prescription drugs (search) to U.S. consumers could be banned by Canada if a proposal being drafted by health officials is approved, changes that would essentially kill a $700 million industry that has become increasingly popular with underinsured patients in search of cheaper medicine.

The issue has become touchy politically for President Bush, whose administration has argued that reimporting U.S.-made drugs from Canada (search) would put consumers at risk because U.S. regulators could not guarantee their safety. The pharmaceutical industry, which donated heavily to Bush's re-election campaign, vehemently opposes reimporting drugs, a practice that undercuts their U.S. sales.

Representatives of both the U.S. and Canadian governments say Bush discussed the issue with Prime Minister Paul Martin when he visited in the fall, sparking accusations Bush pressured Martin to change Canadian policy — an accusation the White House denies.

As part of its socialized medical system (search), the Canadian government sets drug prices substantially lower than those charged in the United States, though the savings from Canadian Internet purchases are eroding. For example, the price on 100 pills of 20 milligrams of Lipitor in Canada rose 26 percent to $201.01 last year. The U.S. price was essentially flat at $290.34.

Under current practice, a prescription from a U.S. doctor is faxed to a Canadian doctor who reviews the patient's health history. The Canadian doctor then signs and faxes the prescription to a so-called Internet pharmacy, which ships the drug.

Canadian officials say such sales endanger the Canadian drug supply, though they admit no shortages exist. The government also maintains it is unethical for doctors to sign prescriptions without examining patients.

The three-pronged measure being considered by Canadian Health Minister Ujjal Dosanjh would prevent Canadian doctors from co-signing prescriptions for U.S. patients without examining them in person, spokesman Ken Polk said by telephone from India.

It also would prohibit prescriptions for foreigners who are not present in Canada and create a list banning certain drugs that are widely used by Canadians from being exported, Polk told The Associated Press.

Existing Canadian law says Canadian doctors must "attend upon" a patient when co-signing a prescription. "We may need to make that language more explicit," Polk said.

A proposal was expected to be presented to Martin's cabinet by the end of the month, Polk said, although Asian tsunami aid efforts were diverting government resources.

New legislation, but not changes to existing regulations, would require support from opposition parties as well as Martin's minority government to pass. It was not clear if a ban on co-signing prescriptions could be accomplished by just changing regulations.

Despite the Bush administration's support for a ban, importing cheaper drugs from Canada is popular with U.S. lawmakers. The House already has passed a bill allowing reimportation once, and lawmakers in both parties say it would pass the Senate if Republican leaders would allow it to come up for vote.

If legislation allowing reimportation were approved by Congress, Bush could face a difficult decision over to whether to sign the bill.

While reimporting drugs is technically illegal, laws are not enforced. Ten million illegal shipments of prescription drugs worth $1.4 billion entered the United States in 2003, about half of them from Canada. About 1.5 to 2 million prescriptions are filled in Canada each year using this method.

The issue is particularly sensitive for lawmakers representing northern U.S. states, where consumers sometimes travel to Canada to purchase cheaper drugs.