THE LIKELIHOOD OF ADDITIONAL REGULATION OF ON-LINE PHARMACIES INCREASES
On December 28 the White House became the latest governmental entity to address the issue of whether on-line pharmacies should be regulated, proposing an initiative that would subject pharmacies selling drug products over the Internet to regulation by the Food and Drug Administration (FDA).
The Internet's revolutionary impact on the pharmaceutical industry is creating a host of new challenges for regulators and law enforcement authorities. The traditional paradigms applied to regulate, for example, drug product promotion and distribution, often are inappropriate when these activities take the form of such on-line species as hypertext links, chat rooms and e-commerce. The problem is well illustrated by the struggle of state and federal governments to regulate the sale of pharmaceutical products online, which, due probably in large part to the Internet's exponential growth,[1] has recently received increased attention from members of federal and state governments, including regulators, legislators and prosecutors.
The benefits of Internet pharmacies for the elderly, the disabled, residents of rural areas and others who have difficulty traveling to drugstores are universally acknowledged. In addition, the general public benefits from the convenience, ease of comparative shopping and increased access to information. The controversy generally has focused upon pharmacies employing physicians who issue prescriptions over the Internet without ever performing in-person examinations of patients. Regulators, lawmakers and members of the medical establishment have expressed concern that this practice opens the door to abuse, because it is easy for a consumer to provide false information to obtain a prescription. Also of concern is the proliferation of "fly-by-night" pharmacies that in some cases do not employ licensed pharmacists and circumvent other laws and regulations designed to protect consumers against, among other things, erroneous prescriptions, dangerous drug interactions and contaminated drug products.
The President's Proposed Initiative
The practices of pharmacy and medicine (including the issuance of prescriptions) traditionally have been the province of state governments. The ease with which the Internet enables commercial transactions across state (and national) borders, however, creates constitutional and logistical problems for state law enforcement authorities. For example, it is unclear whether the state of California could enforce its laws against an on-line pharmacy in New Jersey were it to ship a drug product to a California resident. The White House has proposed to address the problem by providing significant regulatory authority to the FDA. The initiative will be a part of the president's next budget proposal, and will include:
- Requiring each pharmacy filling orders for prescription drugs over the Internet to demonstrate to the FDA that it complies with state and federal laws before it is approved to operate.
- Creating a new civil monetary penalty of $500,000 per violation for the illegal sale of pharmaceuticals via the Internet.
- Granting the FDA administrative subpoena authority for investigating potentially illegal Internet drug sales.
- Expanding federal enforcement efforts, including a $10 million investment to target and punish those who engage in illegal Internet drug sales, including the sale of:
- prescription drugs without a valid prescription;
- unapproved new drugs;
- counterfeit drugs; and
- expired or illegally diverted pharmaceuticals. [2]
- Launching a new public education campaign about the potential dangers of buying prescription drugs online, which will include placing advertisements on health- healthrelated Web sites, taping public service announcements related for distribution to television stations nationwide, and developing a "safety checklist" to be posted online and distributed through health care providers and consumer advocacy organizations.
The president's proposal appears to represent a shift in the administration's policy on Internet pharmacies. As recently as this past summer, Ivan Fong, Department of Justice deputy associate attorney general, told the House Commerce Subcommittee on Oversight that "existing federal law is okay as of our current analysis" and that what is needed is "more assistance for enforcement, not more laws." Fong's opinion is consistent with the industry's position. The National Association of Chain Drug Stores, for example, has stated that better enforcement of current regulations and voluntary mechanisms should be able to weed out the bad actors "without the expansion of the FDA's authority over the legitimate practice of pharmacy."
Reaction to the Initiative
The president's proposal was met with skepticism from at least one key congressional member. A spokesman for House Commerce Committee Chairman Thomas Bliley (R-VA) was reported as stating that Rep. Bliley is "very reluctant to set a precedent" for regulation of the Internet before the full potential of e-commerce is better understood. Rep. Bliley's spokesman also stated that:
Chairman Bliley greets the White House proposal with skepticism and is alarmed that it may be a precedent for regulation of the Internet by politicians who not only do not understand the technology, but could not turn on a fax machine.
Rep. Bliley's committee would have to approve any legislation expanding the FDA's authority over Internet pharmacies. Republicans generally have been reluctant to impose any regulation over e-commerce. The public health, however, may be viewed as a countervailing public interest significant enough to overcome concerns regarding excessive regulation.
The NABP also was critical of the proposal. Carmen Catizone, executive director of the NABP, stated that the association could support broader state regulation–but not greater authority for the FDA. According to Catizone, states have the sole authority to regulate pharmacies, and it would be a mistake for the FDA to come in and try to take away that authority. The NABP recently began giving its own, voluntary seal of approval to Internet pharmacies, known as the Verified Internet Pharmacy Practice SitesTM (VIPPS). Since September, the association has given VIPPS certification to four Web sites (drugstore.com, Merck-Medco Rx Services,[3] PlanetRx.com and CVS Washington Inc.[4]), and Catizone reportedly has stated that three more will be approved early this year. Additional information, including the criteria the NABP applies in evaluating pharmacies applying for VIPPS certification, is available on its Web site (www.nabp.net).
State Interest
Several states have at least expressed concern regarding the proliferation of Internet pharmacies. According to the National Conference of State Legislatures' Health Policy Tracking Service, 19 state legislatures are expected to consider bills regulating on-line prescription drug sales this year. A few states have initiated actions against Internet pharmacies under current laws or regulations. The California Osteopathic Medical Board, for example, recently initiated an action against a California physician who issued prescriptions based upon review of questionnaires via the Internet, alleging that the physician violated a regulation prohibiting the prescription of any medication without conducting a "good faith prior medical examination." Similarly, the Texas State Board of Medical Examiners recently initiated a disciplinary action against a Texas physician who contracted with an Internet pharmacy to issue prescriptions via the Internet. The Texas Board alleged that the practice violates a provision of the Texas Medical Practice Act that requires physicians to act in the interest of the public health and welfare. Significantly, these actions have not been limited to physicians and pharmacies licensed by the state initiating the case. The Illinois attorney general recently issued a complaint against an out-of-state pharmacy that distributed drugs into the state of Illinois without a license. Although there are serious constitutional concerns, the Illinois case suggests that Internet and other mail order pharmacies may be subject to regulation in every state to which they distribute pharmaceutical products.
Conclusion
The Clinton administration's announcement is only the latest significant event in the ongoing struggle by both state and federal governments to address the proliferation of Internet pharmacies that are perceived as exceeding legal and ethical standards. Some form of additional regulation appears to be inevitable. The industry may still have the opportunity, however, to shape the course of these initiatives in a manner that will not impose hardships upon the legitimate operators.
[1] The National Association of State Boards of Pharmacy (NABP) has The estimated that there are close to 200 sites that distribute prescription drugs via the Internet upon receipt of a valid prescription issued by the patient's physician. In addition, the NABP estimates that there are several hundred sites that issue prescriptions over the Internet.
[2] In addition, this money will be used to help crack down on the In marketing of products based on fraudulent health claims.
[3] url: www.merckmedco.com
[4] url: www.cvs.com