Medical Products: Internet Drug Sales & Regulation

On October 19, 2000, the United States General Accounting Office (GAO) issued a report entitled "Internet Pharmacies: Adding Disclosure Requirements Would Aid State and Federal Oversight." This report was prepared at the request of a group of congressional representatives and contains recommendations for legislative reform. The GAO's specific recommendations to Congress included the amendment of the Food, Drug and Cosmetic Act (FDCA) to require that Internet pharmacies (i.e., businesses that sell prescription drugs and use the Internet as a mechanism to communicate with consumers), at a minimum, disclose certain identifying information on their web sites. According to the GAO report, other regulatory bodies, including the Food and Drug Administration (FDA), the Department of Justice (DOJ) and the National Association of Boards of Pharmacy, recommend even more expansive regulation of online prescribing. The National Association of Boards of Pharmacy which has established a voluntary accreditation program for online pharmacies called the Verified Internet Pharmacy Practice Site (VIPPS) certification program, supports legislative mandates for mandatory VIPPS certification.

Pharmacies first began to launch Internet lines of business in early 1999. By July 1999, federal officials estimated that between 200 and 400 businesses were selling prescription drugs on the Internet. In that year, approximately 10million Americans used the Internet to shop for health products, spending an estimated $160million on prescription drugs. Concerns that the increase in Internet pharmacies and online prescribing may be out of reach for formal state and federal controls resulted in the GAO's review of the regulatory scheme for oversight of Internet prescriptions drugs sales.

The GAO report identified three types of Internet pharmacies selling prescription drugs directly to consumers. Some Internet pharmacies operate much like traditional drug stores or mail order pharmacies. They dispense drugs only after receiving valid prescriptions issued by authorized health care professionals. Other Internet pharmacies provide a prescription to customers by involving a health care professional in the delivery of the prescription (in which case the health care professional has not conducted a face-to-face consultation or examination of the patient, but rather, has relied on review of a questionnaire completed by the consumer and submitted to the health care professional via the Internet). Finally, some Internet pharmacies prescribe and dispense medications without the involvement of a health care professional authorized to write prescriptions.

For the purpose of its review, the GAO defined "Internet pharmacy" to include any business that uses the Internet as the primary access point for customers, as well as traditional corner drug stores and mail-order prescription drug services that use the Internet to supplement their direct public access. In conducting its review, the GAO gathered data on the existing Internet prescription sales web sites. The GAO qualified the adequacy of its findings by noting that the anonymity of the Internet makes it difficult to identify all online pharmacies. As a result, the precise number of Internet pharmacies filling prescription drugs to consumers is unknown. The GAO identified 190 Internet pharmacies selling prescription drugs directly to consumers. Among the 190 sites, 79 of those dispense drugs without a prescription.

The GAO report also involved a survey of existing state and federal regulation of Internet drug prescribing and dispensing. The GAO's review of state efforts to regulate Internet drug sales focused on the activities of the professional regulation agencies. Forty states require that out-of-state pharmacies dispensing prescription drugs to its residents be licensed or registered within the state. Additionally, as the regulation of drugs is within the purview of the federal government-specifically, the FDA which is charged with ensuring the safety, effectiveness and quality of domestic pharmaceutical products under the FDCA-Internet prescribing and dispensing also falls within the jurisdiction of the federal government. Thus, the GAO reviewed federal policy and regulation regarding Internet drug sales.

Note that the data that the GAO relied on in publishing its study was collected in early 2000. After the data was gathered, many states, as well as the federal government, have pursued enforcement actions against Internet drug sales and established broader prohibitions against Internet drug sales.

The GAO found that the emergence of Internet pharmacies poses new challenges for the traditional state regulatory agencies that oversee pharmacy practice. Investigating and prosecuting online offenders raises new challenges for enforcement agencies. Many professional boards reported to the GAO that they have encountered difficulties in identifying, investigating and taking disciplinary action against Internet pharmacies that are legally operating as licensed pharmacies outside their state borders, but that are illegally shipping prescriptions into the

subject state. State pharmacy boards reported having a limited ability and authority to investigate and act against such Internet pharmacies. Because of their jurisdictional limits, professional regulatory bodies have found that their traditional investigative tools (i.e., interviews, physical or electronic surveillance and serving subpoenas to produce documents and testimony) are not completely adequate to regulate Internet companies located out of the state. Further, even if a state regulator successfully prosecutes against Internet drug sales activities, such actions are usually limited to the particular state of the regulator absent a coordinated effort between the various state regulators.

Most of the state boards responding to the survey reported that, under existing law, they had the authority to regulate Internet prescribing practices. Thirty-nine of the 45 medical boards responding to the survey confirmed that a physician who issued a prescription on the basis of a review of an online questionnaire did not satisfy the standard of good medical practice required under their states' laws. The general consensus of medical boards (which regulate the prescribing element of Internet drug sites) was that Internet prescribing would fail to meet the appropriate medical standard of care absent the following components that would exist in the traditional physician/patient relationship: (i) patient diagnosis established through patient examination; (ii) discussion with patient of treatment alternatives; (iii) physician access to reliable medical history; (iv) documentation of treatment record; (v) discussion of benefits and risks of therapies reviewed with patient; and (vi) follow-up with the patient to assess the therapeutic outcome. But like pharmacy boards, state medical boards expressed that their ability and authority to investigate incidents involving physicians located outside of their state, but prescribing on the Internet to state residents, was limited.

The Attorneys General of various states has sued to halt sales by Internet drug sites. According to the GAO report, since February 1999, six state Attorneys General have brought legal action against Internet sites providing prescription drugs to consumers in their states without a state license and for issuing prescriptions solely on the basis of information provided through online questionnaires.

The FDA has recently stepped up its monitoring and investigation of Internet drug sales. The FDA currently has dozens of ongoing investigations of Internet drug sales web sites.

This year the FDA began issuing "cyber" letters-letters sent electronically via the Internet-to web sites that offer to sell online prescription drugs that may be illegal. The letters warn these web site operators that they may be engaged in illegal activities and inform them of the laws that govern prescription drug sales. The FDA collaborates in certain enforcement actions with the DOJ which has also increased its prosecution of Internet prescription sales.

Since July 1999, 22 of the 33 criminal investigations that the FDA referred to the DOJ have been actively pursued. In a recent, highly publicized joint FDA and DOJ enforcement action, the Norfolk Men's Clinic case, four individuals and a pharmaceutical supply firm were indicted on July 27, 2000 in connection with illegally offering the prescription drug Viagra over the Internet to consumers. The indictment alleges conspiracy, mail fraud, violations of the FDCA, obstruction of justice and conspiracy to commit money laundering.

The GAO also reported that the Drug Enforcement Agency which regulates controlled substances has initiated 20 investigations of the use of the Internet for the illegal sale of such substances over a 15-month period.

The GAO made several different proposals directed at both state and federal regulators to improve the regulation of Internet drug sales. Primarily, the GAO recommended that Congress should amend the FDCA to require that any entity selling prescription drugs via the Internet disclose certain information on its web site. The FDA and National Association of Boards of Pharmacy commenting on the GAO report, suggested that the recommendations be expanded to limit online prescribing, grant states nationwide injunctive relief and require independent verification of information disclosed by Internet pharmacies. In addition, the GAO advised that the current regulatory structure permits state pharmacy and medical boards to restrict online prescribing and verify disclosed information, and that sufficient protections and regulations can be afforded within the existing structures.

First published in November 2000