TORONTO - Internet sales of prescription drugs 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 re-importing U.S.-made drugs from Canada 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 re-importing 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, 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.

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.