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Sean P. Haney
Excerpted from: Sean P. Haney, Pharmaceutical
Dispensing in the "Wild West": Advancing Health Care and
Protecting Consumers Through the Regulation of Online Pharmacies, 42
William and Mary Law Review 575 (December, 2000)
The "explosion" of Internet pharmacies on the World Wide
Web has created a wealth of opportunities for improvements in the
provision of health care. Unfortunately, the Internet's inherent
characteristics that enable these positive developments also provide
fertile soil for modern day "snake oil salesmen" and
"'unscrupulous marketers."' Problems such as assuring the
quality of medical care, guaranteeing the accuracy of exchanged
information, fraud, and abuse have rapidly become evident. While
pharmaceutical dispensing through traditional pharmacies is highly
regulated, guidance concerning the regulation of dispensing on the
Internet is lacking. The market's swift emergence, the unique
jurisdictional elements of its operation, and the diversity of involved
governing bodies have regulators struggling to devise the ideal
mechanism to address the challenge.
*576 Historically, pharmaceutical services have been governed
predominantly by the states. In this respect, a number of states'
attorneys general and state licensing boards have prosecuted online
pharmacy offenders under existing state pharmacy, consumer protection,
and unprofessional conduct regulations. Alternatively, a few states have
passed new laws dealing explicitly with online pharmacies. On the
prosecutorial side, the Food and Drug Administration (FDA) has also
joined the states in a limited role as provided by the Food, Drug, and
Cosmetic (FD&C) Act. In addition, the American Medical Association
(AMA) and the National Association of Boards of Pharmacy (NABP) have
taken an active role by respectively formulating recommendations and
instituting a certification program for online pharmacies.
Concomitantly, Congress has requested information and heard testimony
concerning online pharmacies. As a result, Congress is currently
considering the implementation of the Internet Pharmacy Consumer
Protection Act as an amendment to the FD&C Act to provide minimum
standards for online pharmacy websites.
This Note explores the regulatory challenges of providing
pharmaceutical products via the Internet in the United States. It begins
with a review of the existing regulatory scheme for prescription drugs
in the United States as well as the development of online pharmacies. It
then examines the unique jurisdictional, public safety, and abuse issues
associated with Internet dispensing, and reviews the applicable
legislative history to provide a grounded understanding of the subject.
Following a discussion of the actions of state and federal regulators,
legislators, and health care professionals, the Note analyzes their
respective approaches. Finally, it recommends a collaborative approach,
describing specific steps for each interested party, that attempts to
protect the rights of legitimate providers while reducing the risks
posed by disreputable operators.
*577 The Regulation of Prescription Drugs In the United States
The Pre-E Era
Traditionally, the states have regulated the dispensing of
prescription drugs. In addition to the practical regulations regarding
dispensing, state pharmacy and medical boards regulate the licensing and
professional standards of health care practitioners. The decision to
defer responsibility for pharmacy regulation to the states stems from
principles elucidated in the Constitution. In particular, the Tenth
Amendment preserves the power of the states to regulate what is not
directly regulated by the federal government. The states, however, are
not the sole arbiters of pharmaceutical law.
The Commerce Clause of the Constitution enables Congress to regulate
commerce among the states. With this in mind, the Federal FD&C Act
was enacted in 1938 to control the sale of drugs and authorize only
those that are safe and effective. These provisions were devised well
before the advent of the Internet, although their purpose was akin to
the desires of current *578 regulators: "to protect patients from
injuries resulting from unsafe and counterfeit drugs and from illicit
practice of medicine and pharmacy." While there may be an inherent
assumption, given its name, that the FDA is the sole authority for the
enforcement of food and drug issues, at least two other agencies wield
significant influence in this arena. The Drug Enforcement Administration
(DEA) regulates narcotic substances via the Controlled Substances Act,
and the Federal Trade Commission (FTC) governs the advertising of
over-the-counter medications. The requirements of this integrated system
of regulations and authorities at the state and federal level have
provided "an effective safety net to protect the U.S. public from
harmful or ineffective drugs, as well as improper prescribing or
dispensing of pharmaceuticals." The development of online
pharmacies, however, has torn a significant hole in this net.
The Internet & Online Pharmacies
The Internet has evolved into a remarkable tool for acquiring
information (including health care information) and conducting business.
A recent Harris Poll indicated that of the 97 million people using the
Internet, 74% view health information. While such access is a hallmark
of the Internet and has the obvious *579 advantage of empowering its
users, the lack of quality control standards and the fact that
practically anyone can post information renders the quality of this
information particularly suspect. As the editors of the Journal of the
American Medical Association described, "[t]he problem is not too
little information but too much, vast chunks of it incomplete,
misleading, or inaccurate." Although the dangers of incomplete,
misleading, or inaccurate information are not only applicable to online
pharmacies, the impact of such information is increasingly pronounced,
given the recent surge of online pharmacies.
According to Carmen Catizone, Executive Director of the NABP, online
pharmacies were among the first e-commerce children of the New Year,
born in earnest following the performances of online giants such as
Amazon.com during the December 1998 holiday season. At that time
approximately Moodlety- six online pharmacies were identified. This number
skyrocketed to over 400 by August *580 1999. Given the potential
financial stakes in this emerging market, one author remarked, "the
battle for customers could make the online bookstore competition look
like a playground scuffle."
While Peter Neupert, the CEO of drugstore.com, doubts that online
pharmacies signal the end for traditional drugstores, he predicts that
within five years they will capture 20% to 25% of the pharmaceutical
market. Many of the traditional "brick and mortar" chain
drugstores have launched or invested in existing *581 online
pharmaceutical services. While some are unconvinced of the financial
rewards of online services, many participants have forged real alliances
in the virtual world in an effort to gain access to pharmacy benefit
plan members and a broad range of insurance *582 providers. Even with
the trepidation of some large chain pharmacies, however, some smaller
family-owned pharmacies that have been on the decline in recent years
view the online pharmacy as an opportunity to expand and compete more
effectively. An improved ability to compete may be crucial in an
environment in which perhaps the only thing declining faster than the
number of independent pharmacies is the rate of reimbursement offered by
third-party payors. Although the experts disagree whether online
pharmacies will be a boon for independents, it will likely be beneficial
for consumers. The nature of the Internet clearly offers some distinct
advantages, including additional opportunities for convenient, discrete,
quality, cost-effective pharmaceutical services.
The beneficial potential of online pharmacies is significant.
Consider the ability to provide information and products to individuals
whose access to conventional pharmacies is restricted because of chronic
disease or geography. Similarly, legitimate *583 options include online
prescription transmission, electronic refills, and electronic consults
within narrowly defined circumstances. Essentially, online pharmacies,
when coupled with legitimate practices, "'are just another channel
of distribution that some people will find more convenient,"'
according to Dr. John L. Colaizzi, Dean of Rutgers College of Pharmacy.
Such benefits are not limited to online pharmacies; technology is also
arriving that will improve health care delivery between diverse health
care providers and information systems.
*584 The potential advantages of online pharmacies, however, do not
exist in a vacuum. They are accompanied by a longer, and potentially
more detrimental, list of disadvantages, including: concerns about
privacy and the transmission of confidential health information;
difficulties with insurance coverage; length of time associated with the
process; added costs; lack of opportunities for personal uniform contact
and counseling; opportunities for fraud and abuse; and the added
competition from traditional pharmacies implementing more modern
conveniences. Additionally, a particular challenge may rest in certain
patients themselves. Although older individuals are typically the
largest users of *585 prescription drugs in the United States, and
consequently account for a substantial pool of potential online pharmacy
customers, they also represent a segment of the population less likely
to have Internet access. This level of access, however, may already be
changing.
In another aspect of the consumer realm, the FDA and pharmaceutical
manufacturers are struggling with regulatory and liability concerns
surrounding the direct-to-consumer promotion and advertising of
pharmaceuticals on the Internet. Even with all of these considerations,
a concern that underlies all Internet pharmacy transactions, beyond the
mere adequacy of information and accuracy of dispensed products, is the
reputability of the entities' practices. Reputable behavior, or its more
troubling *586 absence, is at the heart of the debate about online
pharmacy regulations.
Internet Prescribing and Safety
Functionally speaking, reputable online pharmacies do not operate
much differentlyfrom their "brick and mortar" brothers or
mail-order sisters. Patients contact the pharmacy via the Internet, and
after providing the necessary registration and payment information
(e.g., name, address, drug allergies, current medications being used,
etc.), the pharmacy dispenses a medication from a prescription provided
via mail, e-mail, phone, or fax, depending upon the given state's
regulations. Depending upon the online pharmacy's parent, the patient
may then pick up the prescription at a locally convenient retail site or
have the prescription delivered via standard or overnight delivery.
These legitimate sites, while introducing new practical concerns for
regulators, are not the predominant problem.
The most dangerous and worrisome sites are those rogue pharmacies
that provide patients with prescription medications over the Internet
via online doctors' services with essentially no examination or
physician contact. Consumer demand for these services is being met by a
waiting list of physicians, lured by the *587 prospect of easy money,
writing prescriptions for existing sites, or by physicians starting
their own online dispensary. Lack of adequate physician-patient
interaction is only the first problem.
The process of obtaining a prescription through a domestic rogue
online pharmacy illustrates some significant health safety concerns.
Perhaps a telling aspect of the motivation behind these sites is often
the first question they require online patients to answer: Will that be
Visa or American Express? Although profitability is an obvious goal of
these sites, consumer safety is the target of regulators. Many sites do
not list the credentials of health professionals, if any, who are
involved in the process. There is often no way, therefore, to determine
the credentials, identity, or even if a pharmacist or physician is
involved. Equally disturbing are the health question-naires that such
sites often use in lieu of a traditional physician exam. The problems of
this pseudo-exam are subsequently aggravated by the inability for
follow-up. Overall, these sites do the absolute minimum in a veiled
attempt to comply with state *588 examination and dispensing
requirements. These operational mechanisms, coupled with FDA approvals
in recent years of a number of "lifestyle" drugs like Viagra
(R), have provided illegitimate sites with a potentially profitable but
flagrantly dangerous niche market. This market often preys on the fears,
desires, and wallets of "cyberchondriacs."
As if rogue domestic sites were not dangerous enough, foreign sites
present their own unique and dangerous concerns. The problem of patients
ordering prescription drugs from foreign countries is not new. According
to Bill Hubbard, acting deputy commissioner for policy with the FDA,
"'[w]e've always had these catalogues where people could buy from
overseas, but it was a very small market. . . . The Internet takes it up
a big notch."' Although pharmaceutical companies may not market
unapproved drugs in the United States, and U.S. Customs or Postal
authorities may seize these products in the mail, individuals may order
these drugs as long as they are for their own use. Although Hubbard is
correct, "big" is probably an insufficient term to describe
the magnitude of the Internet's impact and the plethora of resulting
problems. As Representative Ron Klink (D-Pa.) described, "'[i]t is
strictly the Wild West of drug dealing via the Internet."' The
Internet is often praised for the accessibility it offers to legitimate
products and information; however, the same access enables patients to
order *589 oxycodone from Spain, or Xenical from the British Channel
Islands.
Equally troubling is the anonymity that cyberspace provides and the
resulting ability of patients to mistakenly or deliberately falsify
information in order to obtain the approved and unapproved products they
desire. A number of journalists have spotlighted the dangers in their
own purchasing exploits, and at least one news station obtained Viagra
for two pets, a deceased person, and a man with cardiac disease.
Inherent in this acquisition is the ability of patients to obtain
medications "without so much as talking to a doctor." Federal
regulations are designed to provide safe and *590 efficacious products
manufactured under strict quality control guidelines, but there are no
such guarantees with products obtained through rogue foreign online
pharmacies. In fact, there is no guarantee that the product ordered is
the one the patient actually requested. Additionally, the lack of
adequate physical exams and consultations may increase the risk of
potentially life-threatening drug interactions or harmful adverse
events.
Beyond the problems resulting from online providers, now regulators
have to contend with electronic bulletin boards enabling an online
"flea market," where patients are offering to sell their
leftover drugs to other patients. The significance of the problems with
online pharmacies was highlighted by Bloom and Iannacone's recent study.
The importance of their results was manifested in the decision of the
editor of the Annals of Internal Medicine to post the study on its
website months before the article was scheduled for publication. As
health professionals and probing journalists expose the intrinsic health
related problems of these disreputable sites, the legislators,
regulators, and professional organizations are also developing a
heightened awareness of the thorny jurisdictional problems inherent in
these electronic transactions.
*591 Jurisdiction and Jell-O
The problem facing regulators is that a patient may sit at their home
personal computer in one state, deal with an online site in another
state, have a prescription issued by a physician in a third, and then
have a pharmacy in a fourth state dispense the product. This intricate
web of connections has left lawmakers puzzled, wondering where to start.
The FDA has the authority to act under the auspices of the FD&C Act.
Additionally, other federal agencies, such as the FTC, DEA, U.S. Customs
Service, and the Postal Service, have related authority. Furthermore,
the states regulate the licensing of pharmacists, pharmacies, and other
health professionals. Although the states lacked explicit regulations or
laws on e-prescribing at the end of 1998, some states' attorneys general
have filed claims using existing state licensing and consumer protection
laws. Finally, professional organizations such as the AMA and the NABP
provide licensing and professional standards. Although each group is an
important member of the enforcement team, their roles and interactions
remain inadequately defined. As James Winn, Executive Vice *592
President of the Federation of State Medical Boards (FSMB), stated, the
difficulties inherent in this regulatory scheme are like "'trying
to nail Jell-O to the wall."'
The process of bringing an online site or provider to justice is
complicated from the first step, identifying them. Many of the
disreputable sites do not maintain information about their location or
providers, often requiring law enforcement personnel to "'sort
through multiple shell corporations, addresses that turn[] out to be
mail drops, and overlapping physical and Internet addresses shared by
different entities."' Once identified, the enormity of the Web
allows providers to close up shop and re- appear at another site a short
time later. The FDA has made efforts both alone and with the help of
Internet Service Providers (ISPs) to act against these sites, but it is
a formidable task, requiring additional resources.
Although the domestic jurisdictional issues are particularly
daunting, the problem of bringing action against a foreign site is even
more frustrating because jurisdiction is limited. According to Carmen
Catizone, Executive Director of the NABP, "[t]he foreign-based
sites are going to be almost impossible to monitor." Given this
difficulty, the FDA is working with the World Health Organization (WHO)
and cooperating with other nations in an *593 attempt to address the
problem, but a formalized international approach does not yet exist. One
reason may be the various standards for prescription medications
throughout the world. In the meantime, the WHO has stressed cooperation
among member nations to enforce particular national standards and
prohibit illegal international sales. An increasing awareness of the
problems found in a global electronic pharmaceutical market led
lawmakers abroad and at home to call for action.
Viagra E-mail and Legislative Impetus
The legislative process officially began in March 1999, when
Democratic members of the House asked the Comptroller General to conduct
a formal review of the "exploding trend of online phar-macies."
Ironically, only a few days later, Dennis P. Fitzgibbons, minority
deputy staff director for the House Commerce Committee, received e-mail
messages promoting a website where consumers could purchase Viagra
without a physician's visit. In their letter, the House members
expressed concern that these pharmacies "may be outpacing formal
state and federal controls," and requested an *594 analysis of five
primary issues. Shortly after submitting this letter to the Comptroller,
the members also requested the input of Dr. Jane Henney, Commissioner of
the FDA. In their letter to Dr. Henney, the members requested the FDA's
opinion or knowledge on six primary issues. In response, the FDA
addressed the members' concerns first in written form, and later in
testimony before the Subcommittee on Oversight and Investigations.
In its letter, the FDA specifically responded to the members' six
points in the following ways. First, although the FDA was aware of the
authority of various federal regulatory agencies and states regarding
online pharmacies, it was unaware of any single agency that functioned
as the "primary regulator." Second, while the states
traditionally regulate dispensing, the FDA's Center for Drug Evaluation
and Research (CDER) reviews and acts against "violative"
sites. Additionally, the FDA's limited authority (especially regarding
foreign sites) and resources necessitate the surveillance and assistance
of multiple federal agencies, state *595 boards, and professional
organizations. To this end, the FDA was developing draft guidance and
assessing its human resources. Third, the FDA's internal working group
was planning to meet to address the adequacy of existing regulations and
regulatory design. Fourth, the FDA expressed concern over the
"geographic diffusion and other unique characteristics of the
Internet," and stated that new regulations must deftly balance the
concerns of legitimate e-commerce with the need to protect public
health. Fifth, the FDA was unable to assess potential problems with
privacy and the potential for adverse events. Furthermore, the FDA had
no evidence at the moment to indicate that online pharmacies were more
susceptible to fraud than other pharmacies that lack direct patient
contact. Finally, the FDA asserted that quality standards apply "to
all drugs sold in commerce in the United States, regardless of whether
the order is placed in person, online or by the mail."
In contrast to this initial correspondence, the FDA's subsequent
legislative testimony was not designed to answer provided questions.
Instead, the agency focused on the benefits and risks associated with
online pharmacies, framing its initiatives as a governmental hands-off
approach consistent with the Administration's Framework for Global
Electronic Commerce. Additionally, this initial testimony, and the
subsequent hearing *596 held roughly one year later, informed the
Subcommittee about the FDA's continuing progress in cyberspace.
The FDA was joined by professional organizations such as the AMA in
this democratic process. AMA physician Herman I. Abromowitz's testimony
focused on the physician's professional perspective toward online
prescribing. In particular, Dr. Abromowitz highlighted the AMA's opinion
on the minimum standards for proper medical care, the AMA's desire to
work collaboratively with other organizations to facilitate acceptable
electronic prescribing practices, and the opportunities for legitimate
online prescribing.
Initial Responses to the Online Pharmacy Phenomenon
Federal Enforcement
FDA
The FDA, through its Office of Regulatory Affairs and Center for Drug
Evaluation and Compliance, has actively confronted the problem of
illegal online pharmaceutical sales. It initially identified over sixty
cases potentially linked to such illegal sales. Dr. Woodcock, Director
of the FDA's CDER, identified some prime examples in her testimony
before Congress. These included: (1) *597 the first FDA conviction for
wire fraud based on the online sale of an unapproved HIV home test kit;
(2) the identification of a Canadian website that provided GHB prep kits
to an Illinois man who was later convicted of possession of a controlled
substance; (3) the seizure by the FDA's Office of Criminal
Investigations (OCI) of multiple steroid shipments from foreign
manufacturers to the operator of a U.S. website that purported to
function as a "buyers club"; and (4) multiple efforts against
a South American lab, marketing via its company website, abortion kits
containing drugs unapproved in the United States. Since these initial
actions, the FDA implemented an Internet Drug Sales Action Plan and
continues to engage in civil and criminal enforcement activities.
Spurred by the testimony of Dr. Woodcock and others, the Democratic
members of the House, led by Representative Ron Klink (D-Pa.),
introduced legislation to assist in this fight.
*598 Elevators, Escalators, and Hair Stylists
The Internet Pharmacy Consumer Protection Act (Act) was introduced as
an amendment to section 503 of the FD&C Act. The Act proposes
Web-based notification requirements for online providers in an attempt
to protect public health and safety, and was prompted in part by
Congressman Klink's observation that current laws required
"elevators, escalators and hair stylists . . . to display more
licensing information than websites selling potentially lethal
drugs." Essentially the Act has two components. The first explains
minimum identification requirements for online pharmacy websites, and
the second addresses enforcement authority. Regarding identification,
the Act requires the site to list the name and state of licensure of
every professional working with the site (e.g., dispensing physicians,
consulting physicians, and pharmacists), as well as the licenses held by
practitioners that conduct patient consultations designed to provide a
prescription. Regarding enforcement, the Act leaves the authority with
the state if the state has provisions no less stringent than those
proposed in the Act. Currently, the Act remains in committee in the
House.
U.S. Customs Service
The essentially exponential growth of online pharmacies in 1999 was
reflected in a 450% increase in the quantity of pharmaceuticals seized
by the United States Customs Service from 1998 to 1999. *599 Although
this growth presents an increasing burden upon the Customs Service's
limited resources, the Service continues to work separately and in
cooperation with other federal agencies to limit the influx of illegal
foreign pharmaceuticals. Additionally, in testimony before Congress, the
Service emphasized the need for an approach employing cooperation,
communication, and additional resources as well the specific need for
the U.S. Postal Service to implement an automated manifest information
system. The Customs Service's recommendations and actions have not been
confined, however, to domestic tactics. For example, in 1999 Customs
officials worked with authorities in Thailand, a prime source of illegal
foreign drugs, to seize 2.5 million pharmaceutical dosage units, arrest
Moodlety-two Thai citizens, and demonstrate the Customs Service's
continued commitment to protect America's borders from illegal
activities, both electronic and tangible.
Department of Justice
The Department of Justice (DOJ) has also become increasingly involved
with Internet dispensing by: (1) outlining avenues that exist for
prosecuting online pharmacies through existing laws *600 regulated by
the FDA, the DEA, and the FTC; (2) enforcing these laws; (3) engaging in
training and education of law enforcement personnel; (4) cooperating
with domestic and foreign enforcement agencies; and (5) supporting the
Internet Prescription Drug Sales Act of 2000, with the proposal that the
bill be amended to provide a mechanism for injunctive relief.
*601 Presidential Proposal
The President also joined the political chorus of concern in the
final days of the last millennium by submitting a proposal to address
online pharmacies as part of the 2001 budget. The Clinton proposal
requires online pharmacies to obtain federal certification through the
FDA, and creates civil penalties of up to $500,000 for each incident of
dispensing prescription drugs without a valid prescription.
Additionally, the proposal grants the FDA administrative subpoena power
designed to compel cyberphar-macies to provide records to federal
officials. The President, moreover, hopes to improve the FDA's ability
to examine online pharmacies by providing an additional $10 million to
increase staffing by 100 and upgrade the FDA's computer capabilities.
In an effort to achieve these goals, the Administration, via
Secretary of Health and Human Services Donna Shalala, intro-duced the
Internet Prescription Drug Sales Act of 2000 to Congress on May 2, 2000.
The bill would require online pharmacies to be licensed in each state
where they practice and in each state to which they deliver prescription
drugs. It would also mandate that all online pharmacies meet federal
laws concerning the practice of pharmacy (i.e., storage, handling, and
record-keeping requirements) and the completion of a pre-launch notice
to all applicable state pharmacy boards, as well as the Secretary of
Health and Human *602 Services. Finally, the bill would provide both
federal and state mechanisms for enforcement, including monetary civil
penalties. The proposal, in general, and the bill, in particular,
represent a reversal of the Administration's views on online pharmacy
regulation. While the Administration may believe that Congress is
willing to progress in this area, given its introduction of the Internet
Pharmacy Consumer Protection Act, such optimism may be misplaced.
The presidential proposal has drawn limited, essentially courteous,
approval from pharmacy professionals, who compli-mented the President
for recognizing the benefits of online pharmacies as well as the need
for strong penalties for rogue operators. Professional organizations,
however, have voiced opposition to a proposal that expands FDA authority
over online pharmacies. The reputable pharmaceutical players in this
market prefer that the regulatory power remain where it has always
existed, with the states. Meanwhile, as the President and Congress
prepared to battle illegitimate online pharmacy services *603 with the
pen and the purse, states' Attorneys General began combating these
practices with laws already on the books.
Consumer Protection through Existing State Laws
Although states lacked any explicit laws relating to online
prescribing, they challenged pharmacies and providers with existing
licensing and consumer protection regulations. Missouri Attorney General
Jay Nixon provides a classic example. He obtained a temporary
restraining order (TRO) followed by a permanent injunction against
S&H Drug Mart, which uses the website www.ThePillbox.com, and
William Stallknecht, its phar-macist-owner. Both were featured in a New
York Times special report. The basis for the claim was that the San
Antonio pharmacy was providing medications to Missouri citizens without
a Missouri pharmacy license. The final order required that: (1)
Stallknecht pay restitution to Missouri residents who made online *604
purchases from January 1 to June 30, 1999; (2) Stallknecht "pay
$15,000 in penalties and costs to the state of Missouri;" (3) the
website post a notice that prescription sales were not available to
Missouri residents; and (4) violations of the injunction would result in
a maximum penalty of $5,000. The claim was brought after two
prescriptions were filled without verification during an investigation
by the Attorney General's office. Although William Stallknecht, the
pharmacist-owner of ThePillbox.com, indicated that he keeps detailed
records and dispenses only prescriptions of Texas physicians to reduce
potential suspicion in other states, he admitted his daily expectation
that investigators will arrive at his store. In conjunction with the TRO,
Nixon obtained an agreement with the Texas physician who wrote the
unverified prescription that he would no longer treat Missourians or
provide prescriptions for them using Internet services. Under similar
circumstances, Nixon obtained a TRO against a Houston clinic, pharmacy,
and physician.
Meanwhile, in Kansas, State Attorney General Carla Stovall filed a
similar claim for offering medications without adequate patient
evaluation and deceptive advertising, as well as five consumer
protection suits against numerous companies, pharmacies, physicians, and
other individuals. Stovall's claims arose initially *605 from a suit
filed by her office in November of 1998, on behalf of the Kansas Board
of Pharmacy, against Dr. Leandro Pasos for violations of the Kansas
Healing Arts Act. Foreshadowing potential future problems for
regulators, the Washington Medical Quality Assurance Commission cited
Dr. Pasos for unprofessional conduct as a result of his online
prescribing roughly six months after the Kansas Board named him in a
suit.
In an effort to reduce such duplicative efforts, conserve resources,
and promote effective law enforcement, the National Association of
Attorneys General (NAAG) created an Online Pharmacy Working Group.
Although this collaborative effort has already demon-strated its
utility, State Attorneys General recognize that a successful approach
will require federal cooperation. To that end, the NAAG adopted a
resolution endorsing "cooperative federalism in addressing Internet
issues." More importantly, the NAAG set forth two concrete
requests: First, that the states remain the "primary enforcers of
laws relating to the health of their citizens;" and second, that
the federal government provide "nationwide injunctive relief."
In doing so, the states actively defined their preferred role in this
arena and offered a tangible example of how to reach this objective.
Such suggestions, however, are not exhaustive. For example, as existing
state laws have provided some recourse for authorities, a few states
have begun a more targeted approach.
Creating New State Laws
In an effort to address some of the jurisdictional complications of
online dispensing, one of the first of a new breed of laws addressing
*606 nonresident Internet pharmacies was passed in Indiana. Indiana's
Internet pharmacy law requires providers to adhere to Indiana's generic
drug laws as well as the law of their domicile. Similarly, Arkansas
modified and expanded its existing nonresident pharmacy statute to
address the growing concerns of Internet pharmacies. The law requires
the out- of-state pharmacy to be licensed in Arkansas, to have a
licensed Arkansas pharmacist, and to designate an Arkansas resident as
an agent. In addition, if the pharmacy comes under scrutiny, it must
appear before the Arkansas Board of Pharmacy.
In a related effort, Illinois legislators have required nonresident
pharmacies to meet special registration requirements. Finally, a number
of other states are reviewing potential legislative options to address
the complexities of online dispensing. While states have begun enforcing
existing laws and developing new laws, State Medical and Pharmacy
Licensing Boards have been active partners in the enforcement of
acceptable professional practice standards.
Licensing Boards
With the primary objective of upholding the standards of professional
practice, and perhaps the secondary motive of instilling in offenders
the fear of prosecution, suspended licenses, and the inability to
practice, state licensors have stepped in. For example, the Illinois
Professional Regulation Department suspended the license of Dr. Robert
Filice for writing Viagra prescriptions founded *607 only on the
information contained in a single page patient questionnaire and payment
of an $85 consulting fee. His license was later reinstated with
restrictions following a hearing. Similarly, eleven other state medical
boards have acted against physicians for writing online prescriptions. A
Nevada physician was warned that he could no longer continue online
prescribing with Viagra . In Wisconsin, the board "summarily
suspended" a physician, only to later reconsider the decision. In
Colorado, the board chided a physician and warned of the future
potential for disciplinary action. These actions have been welcomed by
national professional organizations that possess the ability to make and
recommend standards, as well as guide practitioners, but are limited in
their authority to reprimand.
Professional Organizations
The AMA has expressed its almost sacred consideration for the
physician- patient relationship and its concern at the potential for
significant erosion of that relationship through improper, unregulated
online prescribing. The organization has made it clear that the
requirements a physician must satisfy to establish a physician-patient
relationship in a traditional setting should apply equally to the
Internet. As such, prescriptions offered "solely on the basis of a
questionnaire would not suffice," and *608 "fall[] well below
a minimum standard of medical care." The AMA, however, has
indicated its concern for the simultaneous protection and development of
legitimate electronic prescribing opportunities. Promoting the optimal
use of this developing technology while inhibiting its abuse is a
delicate balance. To that end, the AMA Board of Trustees has recommended
a six-point plan concerning its professional role in guiding the use of
online prescribing and its cooperation with other organizations in
cyberspace.
The AMA's first three recommendations express its opposition to
online prescribing without adequate protections, its desire that state
licensing boards act against improperly operating sites as well as
practitioners, and its proposal that the AMA develop guidelines on the
physician-patient relationship given the advancements in technology. The
remaining three of the AMA's six recom-mendations deal with its
cooperation with other organizations, the first being the FSMB. In this
cooperative effort the AMA hopes to develop model laws on Internet
prescribing at the state level.
The second collaborative partner identified by the AMA is the NABP.
In particular, the AMA indicated its support of the NABP's Verified
Internet Pharmacy Practice Sites (VIPPS) program. The NABP developed the
program to address growing public concern about Internet pharmacy
services, and the AMA supports the program because it provides a
mechanism whereby "physicians and patients can easily identify
legitimate Internet *609 pharmacy practice sites." The program
requires VIPPS certified pharmacies to adhere to the "licensing and
inspection requirements of their state and each state to which they
dispense." The first certified pharmacies, Drugstore.com, Merck-Medco
Managed Care L.L.C., and planetRx.com, bear the VIPPS certification
hyperlink signifying that they meet the Moodlety-point pharmacy practice
criteria. Finally, the AMA also proposed working with the FDA and other
regulatory agencies to eliminate illegally operating online pharmacies.
Whose Job Is It Anyway?
FDA Authority
Certification
The FDA has deftly pursued violators and should be commended for its
efforts. The FDA's initial intention to follow the Framework for Global
Electronic Commerce, proposing that the private sector should lead along
with the states is especially commendable. President Clinton's proposal
to expand FDA authority, however, is troubling. The proposed federal
certification will yield limited efficacy. Although federal
certification may provide the FDA with a master list of online operators
and consumers with additional information about their online provider,
it seems likely that the predominant registrants will be reputable
operators. Some rogue sites may shy away from the arena if the proposed
stiff penalty for lack of certification is enforced, but many will
likely continue to operate illicitly, moving from state to state until
the states *610 themselves have adopted sufficient, effective regulatory
and enforcement mechanisms.
Certification will devastatingly blur the boundary between the
states' and federal government's authority to regulate pharmacy
practice. Mandatory federal certification would enable the federal
government to regulate electronic pharmacies such as Eckerd online, but
the FDA would continue to lack any authority to regulate traditional
brick and mortar pharmacies such as a neighborhood Eckerd store.
Consider those pharmacies, both large retail chains and local
independents, that permit patients to electronically request their
prescriptions and then to pick up the prescriptions at their
neighborhood pharmacy. Would the electronic transmission of a
prescription or refill request convert the tra-ditional pharmacy into an
online pharmacy subject to federal oversight? Where will the FDA's
authority cease and the states' authority begin? Would such access then
compel the need for brick and mortar access? The prospect of federal
certification seems to generate more questions than it answers, possibly
explaining why online pharmacy providers have expressed concern over the
appropriateness and effectiveness of such a system. As a result,
certification may unnecessarily restrict the electronic options that
pharmacies offer their patients and essentially inhibit a core tenet of
the Internet-access. It is likely that such an outcome would most
significantly impact independent pharmacies, perhaps driving them out of
pharmaceutical e-commerce and eliminating a valuable tool for competing
with the mammoth chains.
*611 Penalties
Although the certification system appears problematic, the need for
increased penalties associated with violations is obvious. Without
severe and enforceable penalties, there will be little incentive for
operators to follow the law or officials to enforce the law. Current
federal law makes the dispensing of a prescription medication without a
valid prescription illegal. Such existing laws, as identified by the
DOJ, could be expanded monetarily, and legislative terms could be
modified to define online prescribing effectuated via a short
questionnaire as failing to meet the definition of a valid prescription.
As such, individual prescribers or websites could be held responsible
for such actions. Although effective enforcement of such penalties may
depend on the assistance of state regulators, the FDA could likely enact
such penalties without the kind of drastic expansion of authority
inherent in online certification.
Administrative Subpoena Power
The Administration's proposal fails to address the limits of the
Administration's new-found subpoena power. In particular, various
potential patient privacy concerns arise. Once again, the concept
generates a multitude of questions. How would such power be brought to
bear in the case of a provider that offers only online services or the
potentially more problematic situation in which a consumer uses both
online and traditional components of his pharmacy? Will the FDA be
sending investigators to the corner drugstore to obtain the files they
desire? Will these investigators be privy to confidential patient
information? To what extent will the FDA seek to prosecute individuals
receiving dangerous or unapproved agents as opposed to the websites
offering such products? Health care providers, pharmacists especially,
are faced with numerous existing barriers to effective patient
communication. *612 Such power may potentially inhibit patients'
willingness to address openly their medication concerns and may
dangerously inhibit daily provision of effective pharmaceutical care.
Foreign Sites
Regulating the electronic border-crossing of foreign sites into the
United States admittedly may be the most problematic aspect of online
pharmacies. The absence of any suggestions within the President's
proposal, however, represents a lost opportunity to introduce a
comprehensive plan. The inherent limits of federal authority to penalize
foreign online pharmacies from offering products in the United States
significantly limit regulators' options. Given the FDA's national
authority to approve pharmaceutical agents for sale in the United
States, as well as its international reputation, the FDA is most
suitably positioned to address the global market. Consequently, it would
provide a unified national voice to foreign online pharmacies, Internet
service providers, and governments. The agency's electronic warnings to
foreign cyberpharmacies are a valuable first step. Similarly, the
formation of a comprehensive Internet Drug Sales Action Plan and a
desire to maintain existing relationships with foreign agencies should
be applauded.
A laudable goal would be the creation of an international panel
coordinated under the auspices of the WHO. The panel could be
established to develop uniform mechanisms for nations to inform one
another of rogue sites operating within their borders and *613 outline a
series of steps for dealing with such providers. As with existing
efforts, the FDA could participate in such an effort through its OCI.
Similarly, professional organizations with an international membership,
such as the NABP, could assist in bridging these regulatory gaps by
expanding professional guidelines and commenting upon proposed
enforcement or legislative actions.
FDA as a Centralized Resource
The administration's proposal is not entirely flawed. The FDA may
serve as an exceptionally useful centralized resource for the states,
and the President's proposal to increase funding to assist the FDA in
countering rogue online pharmacies is an excellent step in the right
direction. Additionally, the measures taken to educate consumers and
practitioners through the FDA's new website and the intended
"Potentials & Perils" campaign are also meritorious. The
FDA should continue to search, investigate, and prosecute online
pharmacy offenders, using its OCI as a key player in this process.
Similarly, the Administration should be encouraged to retain its active
links with other agencies (foreign and domestic), professional
organizations, and practitioners to remain abreast of pharmacologic
trends and technologic developments within the online pharmacy arena.
For instance, the laudable efforts of the U.S. Customs Service and DOJ
dovetail nicely with the FDA's approach. Their separate and
collaborative efforts should continue to advance. Also, the FDA may be
uniquely situated to function as *614 a national clearinghouse of
information from the states regarding offenders.
Some states are implementing online lists of health care
professionals that have been subject to discipline to provide consumers
with greater information regarding the practitioner they select.
Similarly, the FDA could receive and publish on its website a master
list of those sites that the states have reported as violating state
provisions. Alternatively, if the states independently developedsuch
sites, the FDA could create a master site with links to each of the
state sites.
The FDA should also be encouraged to establish partnerships with
private and academic sectors to increase its breadth of available
technological resources.
Legislative Responsibilities and the Internet Pharmacy Consumer
Protection Act
The Internet Pharmacy Consumer Protection Act (Act) has been called a
"first step" by one of its developers, and it appears to be a
good one. By providing minimum standards for identification of Internet
pharmacy providers and then leaving the enforcement of the issue to the
states, Congress has demonstrated an appropriate balance for the
regulation. The Act suffers, however, from some of the same deficiencies
found in the Administration's proposal because, with minimum
identification standards, like mandatory certification, an assumption is
made that providers will comply. Again, the reputable sites likely will
comply; given the ability of providers to hide in cyberspace, however,
it will be extremely difficult to identify and enforce penalties against
those who do not. If sites do not comply, how can they be identified?
Unfortunately, neither the President's proposal nor the Act under review
addresses this issue.
*615 Congress may fulfill its legislative responsibility by first
doing its best to provide additional funding for the FDA, as requested
by the President, and for other collaborating agencies in need of
additional resources such as the U.S. Customs Service. The legislators
may also promote the development of advanced technologies to assist the
FDA and the states in their identification and enforcement efforts. This
might be accomplished by establishing federally funded research grants
targeted at the academic sector, or tax incentives for private companies
to develop more advanced Web searching technology. While creating such
incentives, legislators must also be mindful of the desire not to
inhibit unreasonably online commerce and communication.
The States
The predominant state laws that exist to counter the current
situation are clearly inadequate. States' Attorneys General are forced
to tackle Moodlety-first-century problems with Moodletieth-century laws
designed without adequate consideration for the Internet. These
provisions are ineffective deterrents because they lack significant
penalties. Additionally, the nature of the Internet makes it relatively
easy for offenders to jump from one state to another state where
policing may be less rigorous, or where the laws are even less useful to
prosecutors. Even with these difficulties, a number of diligent States'
Attorneys General pursued commendable and successful claims against
rogue operators in 1999. Amidst the morass of inadequate traditional
laws, a few state legislatures have been successful in developing new
laws in an attempt to deal with this problem. In doing so, they have
begun to forge a new legislative path for dealing with these sites.
These new state laws may represent one of the best future tools
because of their focused approach and consideration of developing *616
technology. The success of such laws, however, depends on the
co-existence of stringent penalties, effective tools for identification,
and diligent enforcement. All of these elements must be supported by a
foundation of cooperation among the states, between the states and
federal government, and between the states and professional
organizations. The NAAG's suggestion of nationwide injunctive relief in
the exercise of "cooperative federalism" is a sensible example
of how this spirit of cooperation may enhance regulatory efforts and
should be implemented.
Professional Organizations
To date, professional organizations have adequately fulfilled their
advisory duties by providing information and guidance to government
regulators. In order to realize their potential, these organizations
must fulfill their developing commitments to produce revised practice
standards for their practitioners. Organizations such as the AMA and
NABP serve a crucial link between government regulators and the
professionals they represent, because such organizations generally have
a more accurate knowledge of their constituents' concerns and
capabilities, making them well suited to tailor narrow but effective
revised practice standards. It seems innately more likely that
professionals will prefer regulations generated from associations or
organizations within which they have a stake than from the federal or
state government. Alternatively, it also seems more likely that
effective, appropriately tailored state and federal regulations will
result from a cooperative effort between the government and professional
organizations. Although plans are being made in this regard, such
standards have yet to be introduced. Professional organizations also
have the ability to make significant contributions in an advisory
capacity to the state and federal government concerning proposed
legislation. Essential to the effectiveness of these standards will be
their association with well- defined and enforced penalties for
violations. Additionally, the development and introduction of the VIPPS
Certification Program by the NABP is a premier example of *617 the type
of forward-thinking, precisely defined tool that will benefit both
practitioners and patients. Although the program has been criticized for
being voluntary, and as such will likely fail to motivate rogue
operators to meet its standards, it is precisely this type of
professional leadership that the FDA depended upon when affirming the
Framework Global Electronic Commerce. Because a program of this type is
voluntary, it will provide added incentive for reputable providers to
meet its rigid standards in order to market themselves as a leader in
the field.
Finally, for programs such as VIPPS and revised practice guidelines
to be effective, an educational campaign must accompany such efforts.
The campaign should be two-pronged, targeting both professionals and the
public. After updating professionals' knowledge of the field, these
newly educated professionals may then help directly educate their own
patients. In this manner the professionals may help reinforce the public
messages conveyed via professional organizations' websites and
traditional advertising. These organizations may seek to enlist student
members of their respective bodies to assist in this public outreach. |
