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Michael Nunnelley [*]


The Internet takes the purchase of prescription drugs from the local pharmacy to the Internet superstore across the nation or around the world. It is expected that the market for Internet pharmacies will grow from a virtual nonexistence a few years ago to a market force within just a few years. Estimates vary broadly, with credible sources putting the Internet prescription market conservatively at USD 1.7 billion industry by 2003 [1] and more ambitiously at USD 15 billion by 2004. [2] Cyber-pharmacies have emerged as part of a general increase in reliance on the Internet for health information and treatment, [3] their numbers growing in 1999 alone from only a handful as the year started to over 400 before it ended.[4]

The intense regulation of this industry creates unique problems in this transition. Clearly, the potential for abuses and fraud in this area, as well as for potential health complications, gives good cause for concern. As a result, there have been increasing questions raised about the safety of these new pharmacies and calls for numerous types of regulation of pharmaceutical Internet commerce. Numerous media outlets have described the situation with alarm[5] . This rapid growth has also been viewed with alarm by actors within the industry.[6]

The majority of industry leaders agree that Internet pharmacy brings potential value to the consumer and justifies its place in the market.[7] The economies of scale and efficiency of more advance delivery systems bring down costs to consumers in an industry wrought with inflation. Internet channels of prescription drug information and delivery offer consumers more control over their buying options through education and flexibility.

On October 17, 2000, Senator James Jeffords (I-Vt.) [8] introduced legislation that joined that chorus. [9] The proposed Internet Prescription Drug Consumer Protection Act would institute a number of provisions aimed at giving the government the power to shut down and regulate domestic and international Internet pharmacies. Senator Jeffords claimed that the bill was aimed only at unscrupulous pharmacies, stating “legitimate Internet pharmacies that operate legally and ethically can offer valuable services to many Americans and have an important role in e-commerce”.[10] This and other similar bills were introduced late in the congressional session in order to stimulate debate for more comprehensive legislation to be reintroduced the following year.[11] This was neither the first nor the last such proposal to be presented Congress,[12] but is treated here because it is representative of what has been proposed.

The Internet from its inception has created hysteria built on the idea that its structural properties were so monumentally different from the advances in business and communication seen before that the traditional methods of evaluating success and failure and approaches to problem solving were no longer relevant. Entrepreneurs played on this concept to convince investors to relinquish untold billions of dollars despite the absence of demonstrable profits or even a concrete argument for why they might be imminent. Old business models were considered outdated and many were convinced they should not be bothered by investment plans that resembled the structure and approach utilized by nearly all businesses that had survived and prospered prior to the Internet boom. It was no longer necessary to have profits, reliable income streams, or any other indicia of success in order to justify a continued optimistic outlook.

This thinking made Jeff Bezos a billionaire though his company, Amazon.com, had never shown a profit.[13] He built his company, concept, and stock on the “last company standing” philosophy. The concept was simple: create market share and ignore any concern for bottom line. Very few Internet based companies, pharmacies included, approached the market with proven traditional concepts of profitability. It was always assumed that once maximum market share was attained, profits could be squeezed from huge revenue streams. It was a marketplace filled with visions and avarice, carried by an overall feeling of a modern-day gold rush.

Much like the faulty assumptions that made otherwise reasonable investors giddy with delightful separation from their investment capital, the overwrought fears of a marketplace overrun with endangering “Wild West” Internet marketing run amuck is unsupported by more cautious analysis of the real market forces and enforcement of present drug regulations. Without a special cabinet position to regulate Internet pharmacies, a special counsel to investigate and prosecute violations of new and more intrusive product deliver laws related to selling prescription drugs online, and without even one constitutional amendment to protect the people from maladministration of Internet distribution channels, the system is not overrun with dangerous side-effects of increased unregulated consumption of prescription drugs. The sky has not fallen, despite few significant modifications of government enforcement of the sale and distribution of medications through non-traditional medium. The regulatory powers have done well despite a lack of substantially increased power, support, and finances.

The proposed legislation brought forth by the legislators in Washington and other states in many ways echoed and reflected this feeling that the Internet represented a drastic change. It seemed that current regulatory methods were not adequate to the revolutionary technology and thus new methods of enforcement were required in order to prevent disaster. Somehow, this new medium was going to allow for potential destructive powers to emerge that had never before been conceived or managed through traditional law and order. There was a general belief growing that the bandits of the “Information Superhighway” were somehow uncontrollable under present enforcement regulations and procedures.

Ivan Fong, Deputy Associate Attorney General at the Department of Justice made the logical point that “the government should treat physical activity and cyber activity in the same way.”[14] The laws protecting citizens from unscrupulous actions of criminals through traditional forms of communication and delivery work on Internet crime in similar manner. The unique nature of the Internet is the size of its audience and ability to reach across borders. There were legal issues and remedies related to transportation of prescription drugs across state lines before the Internet was known to drug dealers, consumers, or physicians willing to capitalize on the market opportunities such a medium delivers. The key to successfully regulating Internet pharmacy is to encourage reciprocity between states and enforce federal present laws pertaining to interstate commerce and controlled substances.[15]

This paper discusses the necessity for and potential effectiveness of current enforcement attempts as well as proposed regulations. Part II outlines the issues faced in more detail, distinguishing the problems created by different types of Internet pharmacies based on their marketing approach and location. Part III discusses what action has already been taken by various state and government actors as well as non-government agencies and comments on their effectiveness. Part IV concludes by considering the potential of further regulation to contribute to or detract from the development and improvement of the provisioning of drugs through Internet pharmacies.


The Internet has already emerged as a force in the pharmaceutical industry even if it has not reached the heights some have predicted. More than fifteen percent of all prescriptions are filled by mail-order pharmacies, many of which operate on the Internet.[16] The size of this sector doubled from 1998 to 2001. [17] Having already reached the status of a billion dollar industry,[18] there still remains substantial room for continued growth. The total market for prescription drugs reached USD 208 billion in 2001[19] and each year retail prescription drugs sales continues to be the fastest growing component of national healthcare expenditures, rising at more than twice the overall rate.[20] Retail stores – excluding mail-order – still account for USD 155 billion of this total and represent the easiest target for the expansion of the Internet pharmacy market share.[21] For perspective, consider that the total market size (online and offline) for retail books, one of the most talked about areas of Internet commerce, was USD 13.7 billion in 1999.[22] Compared to the potential for the Internet pharmacy market, the struggles among Amazon.com, BN.com, and other Internet book retailers "look[s] like a playground scuffle."[23]

There are great potential benefits for consumers if Internet pharmacies develop and prosper. [24] There are considerable scale effects to being able to purchase, store, and provision prescription drugs on a larger level than can currently be attained at the corner drugstore, and with the aid of competitive forces at least some of these savings will be passed on in the form of lower prices.[25] Currently, prices on a given drug vary widely from store to store, within the same state or even across the street at the neighborhood competitor.[26] This is due to a number of factors, including not only scale effects but also price controls, rebates and negotiated discounts, and demand sensitivity.[27] Consumers are unlikely to be aware of price differences in the traditional system because most prices are not posted and are essentially only revealed after purchase has been made. It would be quite time consuming for a consumer to price compare. The Internet allows a consumer to search quickly from her home and arrange for purchase immediately. Further, several websites are designed specifically to facilitate price comparisons, constantly updating a searchable list of drugs and then listing Internet pharmacies in order of price.[28] Again, the nature of the Internet as a searchable database of information allows such services to operate at low cost, whereas it would require considerable time and expense to offer such information on an city-specific level for traditional pharmacies.

Whether the ultimate bill-payer is the patient – directly or through insurance – or the taxpayer – with respect to government provisioning of Medicare and other services – in a world of finite resources these savings will help bring better care and/or improve quality of life. While it is pleasant to imagine that quality care should be provided to all whatever the cost, the reality is that whether an individual is paying for care herself, insured, or covered by government assistance, lower prices will inevitably lead to better care, and high prices can and often do lead to no care at all. In the rare instances where care quality is insensitive to price changes, lower prices at least allow for other goods, such as education, housing, or entertainment, to be enjoyed in greater quantity, which increases enjoyment for most, if not all.

There are also other quality improvements beyond price and substantial convenience advantages to be had through Internet pharmacy. Particularly in rural and remote settings Internet pharmacies can further contribute to quality of care by quickly making available medications that otherwise would be too rare to bother stocking and even providing specialized expertise.[29] This convenience is similarly important for individuals that are homebound by age or disease, for whom home delivery is a luxury newly common that was once a disappearing service when local pharmacies were the only option.[30] Benefits accrue to patients that require long-term medications; for whom the Internet pharmacy can automatically replenish medication stores according to a schedule, preventing the patient from ever accidentally allowing a shortage to occur.[31] Patients being treated for a socially stigmatized condition or who simply value privacy can choose an online drugstore in lieu of a local pharmacy and gain anonymity and security.[32]

As infrastructure improves, benefits will accrue as doctors are able to transmit prescriptions directly to the patient's pharmacy-of-choice.[33] The Institute of Medicine, part of the National Academy of Sciences, released a report in 1999 estimating that 7000 people die each year due to prescription errors.[34] Others contend this estimate is too conservative and that the true figure might be as high as 70,000[35] or even 120,000.[36] This represents only a portion of the errors that occur, as many more cause harm but not death and the vast majority cause no injury but do prevent proper treatment.[37] One study found that greatest potential for serious errors occurred when the order was transcribed, dispensed, and administered.[38] In fact, computerized entry of prescriptions has been shown to reduce that error rate by more than fifty percent.[39]

Against this backdrop of benefits we must evaluate the different forms of Internet pharmacies currently existing and weigh their countervailing dangers. Broadly speaking, three types of pharmacies operating in cyberspace can be grouped for the purposes of this discussion. [40] There are domestic providers that accept prescriptions from a customer's local doctor, domestic providers that have doctors that provide prescriptions upon qualification, and international providers of all types, which usually do not require an American doctor's prescription and often provide prescription drugs not available in the United States. Each category brings increasing regulatory concerns and needs.

A: Domestic Web Pharmacy, Local Doctor

The first group includes online pharmacies that accept legitimate prescriptions from your doctor for discounted online shopping.[41] These pharmacies operate in much the same way as local brick-and-mortar pharmacies, filling prescriptions written by individuals’ doctors and selling other goods such as over-the-counter medications, hygiene supplies, etc.

The concerns surrounding this type of online pharmacy are the least severe among the three categories. Many of the worries relate to the potential for fraud or mistake. In large part, the concerns are not significantly different from those surrounding all Internet or mail-order purchases.[42] As a result of the potentials for serious health consequences – due to lack of proper medication, side effects, or drug interactions – not as prevalent in the sale of other products, businesses selling prescription drugs do merit additional regulation. This is a decision was already made with respect to pharmacies as compared to other businesses when they operated primarily at the local level. The question then turns to whether anything about this group of pharmacies requires additional regulation beyond that which they are already subject to. As the paper will explore later, the answer here is largely no. There are already numerous laws that clearly address most of the behaviors likely to arise with respect to this group, including concerns of quality control and licensing, which are easily applicable to these pharmacies, though perhaps with some creativity. The only question remains whether the bodies that currently exercise that power on local pharmacies have the same level of incentive to do so with national pharmacies.[43]

B: Domestic Web Pharmacy, Cyber-Doctor

A second type of domestic Internet pharmacy is one that accepts online requests for drugs without an independent doctor having provided a prescription.[44] Instead, these businesses hold that they can issue a prescription through on-site doctors that hold “Internet consultations”. A plethora of these online stores emerged, many specializing in selling Viagra, Propecia, obesity medications, anabolic steroids, and other "pop" drugs.[45] The quality of care is most implicated in cases where a patient can receive prescriptions within minutes by visiting the website at any time of the day or night. In fact, MedPrescribe.com, like many others in this category, allows you to click directly on a drug’s name in order to be taken directly to an HTML form for your “consultation” with respect to that drug only.[46] This seems markedly different to many from a conventional doctor visit, where a patient explains symptoms of a problem and the doctor suggests an appropriate medication or other treatment. The U.S. House Subcommittee on Oversight and Investigation found that a couple years ago hundreds of websites were selling such "instant" prescriptions. [47]

In addition to facing all of the considerations of the first group of pharmacies, the criticism launched against these pharmacies relates to the quality, ethicality, and safety of filling prescriptions from a doctor that has never seen the patient or even contacted their doctor. The patient has no way of determining the qualifications of the doctor prescribing the medication somewhere on the other end of cyberspace.[48] For that matter, the patient can not even be certain there is a doctor on the other end actually evaluating the decision and not merely a computer returning an automated response.

This presumes the patient wants the doctor on the other end to truly evaluate their need for a drug. Increasingly, however, patients are taking drugs despite failing to meet the requisite medical necessity or for reasons other than their intended uses as “designer” prescriptions. It is easy to imagine individuals that want access to the new “miracle” diet drug but are not actually obese. Viagra is another such drug for men looking for added benefits even absent difficulties. Women, too, have begun taking the drug in large numbers after having learned that it can have sexual side effects, which, though different in character from those enjoyed by male users, are reputedly pleasant.[49] It would thus be in their interest that a doctor not be bogged down by details that might make the prescription less likely to be given, such as their being female in the case of a Viagra request. The Internet allows such users to easily falsify information in order to appear qualified, and it is unlikely that the “doctor” on the other end at many of these websites will do anything to test their veracity.[50]

Some web pharmacies almost encourage lying by telling their “patients” in advance what answers will result in a prescription.[51] While they might argue that this is done to prevent patients from wasting the consultation fee if they are not going to receive the prescription, it seems unlikely that the pharmacies are being that altruistic. This mechanism discouraging communication would arguably constitute improper medical practice, given that answers short of those required for prescription might still indicate a need for other treatments. In a traditional setting, a patient hoping to have a particular medication prescribed could be offered these other treatment options (be they medication or other). This system encourages patients to either lie in order to receive their chosen treatment or to forego treatment altogether.

The pitfalls of this type of provisioning have been have no doubt been exploited numerous times. One television news investigative team successfully used false information typed into an online questionnaire to have Viagra delivered to a cat. No inquiry was ever made by the company to determine if the patient actually had the symptoms named, nor, in this case, even to determine if the patient was actually human.[52] Even answers to online questionnaires that do not meet medically accepted requirements for prescription may not prevent prescription by unscrupulous or careless cyber-doctors. Worse, answers that indicate conditions which contraindicate the medication for health reasons such as contraindicating medical conditions or the presence of another potentially interacting medication have been missed by these instant prescription pharmacies. [53]

So how has this loophole allowing such prescription of drugs through the Internet come to exist? By expressed policy of American Medical Association House of Delegates in concert with the National Association of Boards of Pharmacy. [54] The AMA proposed an exception to the traditional requirement that doctors should have seen their patients in order to prescribe medication in order to “support the use of the Internet as a mechanism to prescribe medications with appropriate safeguards to ensure that the standards for high quality medical care are fulfilled”.[55] While one could choose to blame either the AMA and NABP for lack of sufficient oversight or the entrepreneurs who took this loophole and convinced employee doctors to abandon traditional notions of ethics in the pursuit of financial gain, many regarded this initial statement by the AMA as an endorsement – or at least a tolerance – of the practices that followed. [56] The AMA's and NABP's later, more conservative[57] responses to this practice are discussed later.[58]

Perhaps the growth of these ask-receive pharmacies has contributed to the astonishingly conspicuous rise in advertising for prescription drugs on television and in print media. [59] That is not to say that absent these websites these types of drugs would be prescribed more safely or less often. Many commercials for every type of drug instruct you to "ask your doctor about XYZ". It seems that many doctors are receptive to having their patients tell them what they are going to prescribe them, particularly in certain non-life-threatening areas of treatment.[60] A look at the Propecia website shows a page where you can enter your ZIP code and a list of doctors will pop up.[61] If certain small-town ZIP codes are entered, for example the code for Prattville, Alabama (36067), a message is returned that reads: "We are sorry, but no physicians within the specified radius of your ZIP code have registered for this service."[62] This is clearly not because the town lacks doctors,[63] but rather because it lacks doctors that have agreed to be listed here. So this list amounts to a list of doctors that have "registered" to let individuals know that if they come speak to them and pay their consultation fee they will probably receive a prescription for Propecia. While this does not possess all of the pitfalls of the "instant" web consultation,[64] it does not seem to rise to the high standard of medical care that critics imply these pharmacies replace.

C: Global Web, Any Doctor?

The third and perhaps most interesting online drugstores are the "over-seas" and "south-of-the-border" drugstores.[65] This use of the Internet for cross-border medication provisioning is only part of the increasing globalization of healthcare and health law.[66] Canadian websites promise similar quality and reliability to US pharmacies but at significantly lower prices.[67] There are a number of drugstores offering Mexican medical drugs, usually shipped by Federal Express or a similar private courier. These are primary used for anabolic steroids and painkillers unavailable from any legitimate American doctor. There is an increasing trend among patients with AIDS or other severe and terminal diseases to go to these outside sources.[68] For these individuals, offshore pharmacies provide the promise of powerful, perhaps unavailable medications at a fraction of the cost of an equivalent treatment through their doctor.

The risks to consumers are rather clear. Medications that have not been granted FDA approval are more likely to be inadvisable for use by consumers, either due to misapplication of the drug to the problem or the nature of the drug generally. Additionally, there have been numerous cases of drugs from Mexico having been discovered to have been contaminated or mislabeled as another medication.[69]

If the "Wild West" does exist in online pharmacy the international pharmacy would be Dodge City.[70] Many traditional methods of regulation associated with the pharmaceutical industry are not easily applied to companies outside the United States. It is with respect to these websites that the most creative solutions in regulation are required, employing a diverse set of enforcement mechanisms.

Focus in the international pharmacy area commonly remains on consumer safety concerns while the very real economic impact that cross border prescription drug sales have on the companies manufacturing those drugs is given short shrift. The re-importation of drugs is referred to as International diversion. It is the importation of products originally intended for distribution in another country. The United States serves as the profit center for pharmaceutical manufacturers. It is the haven of profit they require to recoup their investments in research and development. Many countries do not recognize the US regulations regarding patents. This alone impacts the potential for drugs competing with branded medications through the duplication or generic process. Generics are commonly delayed in the US through patent laws and protective regulations prohibiting retail of competing medications that may intrude on a manufacturer’s intellectual property rights. Importing a competing medication with similar or identical chemical traits circumvents those controls and thus reduces or even removes profits for the original manufacturer. Whether the consumer is buying a completing drug or the identical drug meant for a foreign market, the impact on the manufacturer’s revenues can be drastic.

Representatives straddle the fence on the issue of re-importation of prescription medications. A large number of elderly constituents benefit from lower cross border prices of medications they require to maintain their quality of life. These savings can be quite substantial, especially as a percentage of a fixed income. It is difficult for representatives to combat the strength of elderly voting power to secure the profits of large pharmaceutical companies. The consumer perspective is simply that it is unfair to pay substantially more to buy an American manufactured medication in the US when it is available to citizens of other countries at a much more palatable cost. Some legislators advocate the re-importation of medications as a means to lower prescription drugs costs to seniors on Medicare and Medicaid.[71] Re-importation is most definitely a viable method of bypassing the markup US markets pay in excess of International markets.

In prepared witness testimony, before The Committee on Energy and Commerce, Mr. Donald deKieffer referred to re-importation of American manufactured prescription drugs as financially destructive to the pharmaceutical industry as a whole.[72] He exclaimed that the bypass functionality of drug importation violated the intellectual property rights of the drug manufacturer, and that continuation would have devastating effects on the industry as a whole. Although re-importation, or parallel importation brings up concerns about health risks and quality assurance, there is a very real impact to be realized on behalf of those companies which invest to create the cures for disease, treatments for medical conditions, and medications to improve quality of life. Attempting to solve America’s skyrocketing drug costs by importing the same drugs from uncontrolled markets may serve to diminish the source of new medications.


A threshold question to consider in evaluating the present and future regulation of Internet pharmacies is whether problem is growing or attenuating. Though much scholarship in this area assumes that the growth of this market implies substantial problems, [73] it is hardly corollary to these statistics and predictions that the Internet represents the onslaught of the "Wild West" in the pharmaceutical industry. The projections of analysts in this area are open to some fallibility, and should be viewed with caution given the general roller-coaster trend of stock prices in the dot-com arena.[74] Some analysts have begun dampening their projections based on concerns that initial projections may have been based on incorrect assumptions about profitability. [75] Even significant Internet pharmacy participants do not anticipate that online drugstores are likely to dominate their physical counterparts.[76] Still, growth to some extent seems certain That there have been problems is undeniable, and indeed is the subject of much of this paper.

This does not mean that the growth of the industry proportionately implies the growth of these problems, even absent increased regulation. As enforcement actions are taken (as they were before the Internet and will continue to be) conduct will be reformed any many areas. Just a few high profile enforcement actions can have a significant chilling effect on improper actions. Most traditional pharmacies had learned to play by the rules and did not need warning, but the Internet brought many individuals to the industry that had never operated a "brick and mortar" pharmacy. As these new entrants become more seasoned in the industry and the entry and exit rates in the industry become more stable, normalcy will likely emerge as the norm even in a growing industry.

As the traditional retail chain and independent pharmacies enter the Internet market they will also be a conservative force on behavior in the sector. A number of the large chains have begun entering the market with varying levels of success. [77] Some, such as CVS and Walgreens, operate their own websites and will influence the market by drawing customers to their site on the strength of their name, forcing others to meet higher standards.[78] Others operate under their own name and that of others. as in the case of Rite-Aid, which is partnered with Drugstore.com.[79] Rite-Aid's investment in Drugstore.com allowed Rite-Aid to enter the online market with force, but more relevant to our concerns, it provided Drugstore.com with experience in navigating the regulatory requirements of drug sales in the multi-state arena. Similarly, "brick and mortar" independent drugstores, seeking relief from the loss in market share they have experienced in recent years, have also begun entering the online market.[80] Some have chosen to join together under CornerDrugstore.com, a consortium of hundreds of independent drugstores that provides one web address serving patients through these local pharmacies.[81] Many have chosen to specialize, serving niche markets such as diabetics or AIDS patients while trading on their history as an independent pharmacy to build trust. [82]

Another reason why it is faulty to assume that the growth of the sector implies the growth of problems is that even if the size of the market grows the number of participants will likely stagnate and even reduce. It would not be surprising for the Internet pharmaceutical market to mirror that of the retail market as a whole. While independent drugstores have maintained small gains or level sales in recent years, the chain stores have absorbed the large gains in the size of the market.[83] Consequently, smaller pharmacies have seen a steady decline in their market share for a number of years.[84] A similar change in the Internet market would ease the burden of regulating the industry, as the larger pharmacies would be high-profile targets with a great deal of motivation to comply with ethical standards and that would leave less of a burden on monitoring the reduced number of smaller participants.

Indeed, it appears that the online pharmacy has already begun to consolidate and standardize in a similar path to the retail market. A number of the initial large Internet pharmacies have consolidated, disappeared, or are experiencing financial difficulties.[85] There are not any studies estimating the number of web pharmacies that have been released in 2002. Anecdotally, however, in the time this paper was written I was forced to alter a number of my examples of smaller pharmacies because they had shut down, either due to financial problems or legal troubles. Many that are listed here will probably be dinosaurs within a year of this writing. While it is possible that there are hundreds more popping up in their place, and that this merely represents the churning of new and old participants that critics of Internet pharmacy fear, it appears that there is actually a substantial contraction. A search of the words "Internet Pharmacy" on Google.com yielded 499,000 results on May 9, 2002[86] down from over 700,000 just over a year prior. A similar search on Yahoo! yielded 98 matching websites in 2001 but only 30 in 2002.[87] Though this does not demonstrate conclusively that the number has shrunk, on the expanding Net a search yielding fewer results in generally good evidence of a decline, particularly with respect to Yahoo!, which lists only active, paying websites.

In the context of this evidence of consolidation and reform, a number of current and potential regulatory mechanisms can be evaluated. An improving situation is still hardly a perfect one, and the current and past progress is at least partly attributable to regulatory forces at work. Nongovernmental bodies, the FDA and other federal actors, and state government bodies all have unique and often overlapping regulatory powers over Internet pharmacies domestic and international. There have been some recent modifications to those powers in response to abuses of Internet pharmacy, and literally hundreds of proposals to add to the powers of these bodies and even create new bodies with new powers have seen debate at various times. Together they form a powerful, if imperfect mechanism for regulating Internet pharmacy behavior.

A. Nongovernmental Regulation

Nongovernmental associations and organizations can and should play a crucial role in regulating Internet pharmacies. At the state level, state boards of medicine and pharmacy have detailed oversight that can substantially impact the practices of domestic pharmacies and doctors. These two types of nongovernmental organizations have national counterparts in the Federation of State Medical Boards and the National Association of Boards of Pharmacy. Both have taken significant steps to improve the quality of provisioning of medicine through the Internet with a primary concern on taking proper account of safety concerns while preventing the stifling of this area and the potential for improved commerce and medical care that it promises. No state has as of yet found – under new statute or by judicial ruling – that Internet Pharmacies are per se illegal.[88] Furthermore, the National Association of Boards of Pharmacy has expressed their desire to keep it that way, and has further opposed the implementation of new FDA standards or other federal regulation of the area.[89] The AMA also shares this view.[90]

As mentioned above in Part II.A, the phenomenon of the cyber-doctor prescription is in large part a creation of policies set forth by the AMA.[91] In as much as this problem is the result of AMA and NABP policies, it is probably best that the solution be developed with the aid of these bodies well, hopefully without the need for the urging and aid of legislation.

The AMA has long had guidelines outlining the minimum standard of care required, including that the doctor should obtain a medical history, physically examine the patient, offer and discuss treatment options, inform the patient about the risks and benefits of the prescription, and provide for follow-up care for the patient. It is implicit in the arrangements discussed above that many of these guidelines have been ignored in the dispensing of prescriptions by cyber-doctors, who perhaps relied on the original AMA statement on Internet prescribing as justification for ignoring these guidelines. John O'Bannon III, MD, member of the AMA Council on Ethical and Judicial Affairs, attempted to clarify the AMA position in March 1999, saying "any prescribing on the Internet or otherwise is wrong, illegal, and unethical if it occurs outside the context of a valid patient-physician relationship."[92] Later that year the AMA amended the guidelines to specifically state that the original standards apply to doctors that operate over the Internet, ending any confusion that their endorsement of the Internet as a vehicle for prescription writing obviated these longstanding principles.[93]

These acts, of course, did not by themselves bring any websites into compliance as the dictates of the AMA have no enforcement power.[94] Still, the persuasive power of the guideline change should not be overlooked. It served to clarify for state and national actors, including state medical boards, that the AMA considered many practices prevalent on the web improper. This also served as a wake-up call to physicians that were employed by web pharmacies. While perhaps few actually believed that the practices were actually proper, this took away their ability to make a pretense that their actions were arguably allowed.

Thus the AMA's greatest power is as a disseminator of information, not only in the form of official guidelines but also through their publications and statements to other media outlets and industry journals. One publication put out by the AMA is American Medical News , a newspaper-style weekly with a print circulation of over 230,000 that also offers web availability.[95] Given its focus on "professional, regulatory, public health and health market coverage" it is well positioned to cover areas like Internet pharmacy regulation and is likely to be read by many that are working in the area.[96] Indeed, while its primary audience is physicians, it is also read by "health regulators; legislators and their staffs; staffs of state, county and specialty medical societies; administrators of health programs; and journalists".[97] American Medical News has increasingly covered the regulation of Internet pharmacies, [98] and has been direct about its intent to warn subscriber-doctors about the risks of improper practices to their continued practice.[99]

The most significant step to be taken with respect to pharmacies that prescribe online in states were medical associations handle licensing is to revoke licenses of doctors that do not abide by the ethical rules that they are sworn to. The Federation of State Medical Boards employed a full-time investigator to search for doctors that were prescribing medications online improperly for the entire year 2001.[100] The position was to end soon, however, after its one-year funding – provided a group of pharmaceutical companies – was scheduled to expire. As of yet there have been no reports on the number of successful prosecutions as a result of the post. Success would not necessarily be measured exclusively in forfeited licenses, but could also be noted in the form doctors which chose voluntarily to stop and doctors deterred from ever considering such a path. Suffice it to say, however, that as of this writing there remains a ready supply of doctors writing such prescriptions despite these and other efforts.[101]

The NABP has argued that self-regulation will be adequate, and has instituted a certification called Verified Internet Pharmacy Practice Sites in order to regulate the industry.[102] The AMA looks to the NABP’s Verified Internet Pharmacy Practice Sites (VIPPS) as a primary source of protection,[103] whereby online pharmacies must meet certain requirements in order to receive the VIPPS seal on their website and be listed at the NABP website as a certified pharmacy.[104] A site that wants VIPPS certification must apply through the NABP, submitting license records and other information and consenting to a number of checks including random and scheduled on-site inspections.[105]

The system currently has several shortcomings which prevent it from being effective. First, the system is not very well publicized – though its renown improved substantially even as this paper was written – so consumers have no reason to know the seal is missing.[106] Many consumers that prefer a reliable source of prescription drugs online remain unaware of any system to guide them. Second, this mechanism is only a sufficient protection to the extent that consumers want a reputable provider. Do many people really go to www.exclamation-buy-viagra-order-impotence-prescriptions.com and hope to find the seal of approval of the AMA, much less the more obscure NABP? If anything, they are looking for just the sort of unscrupulous pharmacy that will not question their need for the medication.[107] Third, and perhaps most importantly, thus far certification has not become mandatory for licensing in any state. These limitations together help explain why even after several years of existence the VIPPS program only listed thirteen pharmacies.[108] Given that earlier estimates put the number of pharmacies on the Internet in the hundreds it would seem that the vast majority of online pharmacies lack this certification, either because they are unable to meet its strictures or they do not feel it is worth the cost and inconvenience to get certified.

If the NABP can garner further acceptance and recognition of its VIPPS system it promises to be one of the more effective regulatory devices available. NABP is the sole organization representing every state pharmacy board in the United States and therefore is in a great position to create interstate uniformity in the industry. [109] Further, since its membership also includes the boards of pharmacy for Canada, New Zealand, and Australia, it is one of the few organizations in place that can provide international oversight, if limited, at least in terms of reporting and information exchange.[110]

One reform that could be easily implemented for state pharmacy boards would be to require VIPPS certification in order to maintain an Internet presence.[111] Given that the body that oversees VIPPS, the NABP, is composed of the state boards of pharmacy of all fifty states,[112] it would appear that the program has the support of most if not all state boards. States boards could therefore require pharmacies to go through VIPPS certification in order to conduct Internet business, giving those that failed to gain VIPPS a more limited license prohibiting Internet transactions.[113] It would not be necessary that certification be gained simply to advertise on the Internet or to maintain a store website, but it would be if required prescriptions were given or orders were taken.

This approach displays several advantages over other approaches available to state boards and government agencies. It can be quickly implemented because it takes advantage of a regulatory mechanism that is already established and in place. State boards will not need to create or promulgate new rules in order to address Internet pharmacy, nor will they need to hire substantial staff to ensure compliance. Perhaps most importantly, it avoids certain incentive problems associated with other methods. It is the nature of state boards and agencies to be most responsive to the concerns of their own residents. Asking a state board to undertake substantial expense and effort to protect individuals in far-off locations is asking a great deal of a board or agency that has finite resources and must answer to the louder, more pressing complaints of residents. While the state of California may be large enough that virtually all Internet pharmacies merit the attention of its state pharmacy and medical boards, a smaller state such as New Hampshire could conceivably provide home to a pharmacy that was viable at a national level without generating much in-state business. The minimal effort required to administer a simple rule requiring VIPPS certification makes it less likely that a state board would shirk from this duty in favor of other concerns.

Beyond the boards representing doctors and pharmacies at the state and national level other nongovernmental organizations can play a role in establishing norms and policing the Internet pharmacy industry. Initiatives need not come only from organizations already formally in place, either. For example. former U.S. Surgeon General C. Everett Koop, MD, initiated the formation of a group called Hi-Ethics for Health Internet Ethics after discovering that the site that bore his name, DrKoop.com, employed questionable advertising techniques for medications.[114] Twenty of the largest health-based dot-coms established fourteen ethical principles, including a section on professionalism that implicates Internet pharmacies.[115] To date, its membership is limited to its original founding members – the thirteen that remain in business, anyway – none of which are pharmacies. This is not necessarily a failure, however, as it does not claim to aspire to be an accreditation itself, but rather a guide by a few significant industry players on how guidelines should be modeled.

At the international level, a nonprofit based in Geneva, Switzerland developed a code of ethics in 1996 which now boasts the participation of about 3000 websites.[116] The Health on the Net Foundation Code of Conduct (HONcode) is published in seventeen languages [117] and has participants in thirty-six countries.[118] Membership is voluntary, and workers at the Foundation visit the sites to see if they are complying and aid in any necessary modifications.[119] A number pharmacies that are not members of VIPPS are members of HONcode, including the large American pharmacies VitalRx.com, PLanetRx.com, and Wellpartner.com, as well as numerous pharmacies in other countries. One explanation is that HONcode is more widely participated in and recognized and therefore a more significant distinction to many consumers. A second reason may be that HONcode is more general in its requirements and therefore many web pharmacies find compliance easier to achieve.[120] Given differing national standards in pharmacy, it is impractical to expect an international body to enumerate requirements to the same level of specificity as a national body. This does serve as a limit on the effectiveness of such an organization in regulation. Still, it does serve consumers by giving a reliable method for determining if a site meets minimal ethical standards, particularly a problem in the context of international pharmacies.

The experience of the Internet Healthcare Coalition also demonstrates the need for early consumer recognition and merchant participation if voluntary regulation is to be effective.[121] Their initiative received widespread praise for release of an international code of ethics released May 24, 2000 by a large and diverse panel of experts.[122] The chair of the Internet Healthcare Coalition, Helga E. Rippen, MD, PhD, MPH, said soon after, "We believe that the eHealth Code of Ethics is really the internationally universal code of expectations for behavior."[123] But it failed to garner participants or establish a recognizable certification. Perhaps its rigor, one of the grounds on which was initially praised, was one of its limiting burdens. Michael J. Rozen, MD, vice president of consumer affairs for WellMed Inc., a web-company that chose not to participate, said of the code "We always think you should aspire to higher, nobler good, but in actuality some of the things may not be implementable."[124] Certainly had consumers collectively decided that obedience to the eHealth Code of Ethics or any other standard was essential to their patronage more companies would have come to the opinion that the policy was implementable. Absent the backing of a widely recognizable organization, however, it is probably difficult for a voluntary code to become well known if its strictness prevents companies from readily joining.

Against this backdrop of successes and failures, a new entry emerges in the Internet pharmacy regulation game. The American Accreditation HealthCare Commission (URAC), a coalition established by a number of healthcare companies but independently run, has existed since 1990 and has a total of thirteen various accreditation programs.[125] It's most recent addition is an accreditation for Internet pharmacies, a rigorous set of requirements announced on December 12, 2001 that is in part based on eHealth Code of Ethics and the Hi-Ethics Principles. [126] Its fourteen current members are largely identical to the Hi-Ethics founders, which is hardly surprising considering it borrowed much of their code.[127]

Given its youth it is too early to say for certain whether the URAC pharmacy accreditation will succeed, but it appears unlikely to gain much sway. While URAC is an established player in the accreditation business, its audience with its other accreditations is largely composed of health professionals. But absent compulsory participation – which it cannot achieve, nor does it aspire to – the relevant group that determines its success is not health professionals but consumers, as its advocates themselves implicitly admit.[128] In this group, there is little evidence that URAC has any saliency. Though some industry giants support it, it lacks the backing of organizations such as the AMA or the NABP. Given its lack of consumer recognition, its rigorous standards, and its voluntary operation, there seems to be little to endorse the URAC accreditation as a force for long-term industry regulation.

B. The Food and Drug Administration and Other Federal Government Agencies

The Food and Drug Administration is the first organization one is likely to think of when one contemplates the regulation of prescription drugs. It's powers to regulate drugs and the pharmaceutical industry date back to 1938 [129] and have been amended and updated through the years.[130] The statute specifically contemplated and addressed the need to protect consumers from unsafe and unscrupulous practices of pharmacies.[131] Despite this mandate, the FDA has traditionally left most regulation of the provisioning of prescription medications – in contrast to the approval and regulation of the drugs themselves– to other bodies.

At the end of 2000 the FDA announced a new "Shop Smart" service for consumers to report suspicious Internet sites, particularly those that might have made a sale resulting in injury. [132] This form is now only two clicks away from the FDA homepage.[133] The same page also lists options for calling a phone number in life-threatening cases or filling out the The MedWatch Online Voluntary Reporting Form if there was a serious reaction to an FDA-regulated product.[134] Complaints will lead to investigations and, in some cases, warnings to the public.[135] The FDA is well positioned to utilize its high profile for such cases. Generally, though, it will probably be best served using informal enforcement methods to conform conduct. The threat of public rebuke is probably enough to generate substantial compliance by many actors, at least in the case of domestic actors. They could also improve compliance by sharing information with relevant state governments and medical and pharmaceutical boards that are in better positions to act. Following such a strategy will conserve resources and be more expedient, of particular importance should the number of Internet pharmacies continue to grow, as some but not all experts predict also

Cyber-letters, letters sent electronically via email, were issued beginning in 2000 in concern with the above strategy.[136] The initial goal was to target foreign websites through shame and subtle threat, with the letters made public via the web[137] and copied to the US Customs Department. The "letter" strategy was not a new idea, but rather an Internet-adaptation of a similar concept which had proven effective in other areas. Later, the idea was adapted further to include domestic web pharmacies; indeed, most of the recent letter have been to domestic pharmacies.[138] It appears that the FDA felt their letters were more appropriate in the domestic context. Given there are still many foreign Internet pharmacies, this is probably due to calculations on the part of the FDA that the letters to the foreign pharmacies were less effective and/or that they were best handled in many cases by other agencies.

The Federal Trade Commission has also increasingly evoked its jurisdiction in this area. July 1999 brought "Operation Cure-All". The focus of this operation was not Internet pharmacies per se, but rather websites using questionable or deceptive promotions and claims. It identified about 600 sites that used these dubious methods.[139] A number of enforcement actions were brought against pharmacies and some have already led to closure.

It is in the category of international pharmacies that the lines between regulating the shipment of pharmaceuticals and preventing illicit drug trafficking becomes considerably blurred. The enforcement methods thus move towards consumption-oriented measures, such as the limits on Federal Restrictive Importing laws.[140] The responsibilities also shift increasingly away from the FDA and FTC and towards agencies such as the US Customs Agency.[141] Under current laws, it appears that most of international drugs, even those that are not FDA approved, can often be shipped without penalty, it not legally. The reaches of the FDA and FTC are considerably less extensive with respect to international pharmacies.[142] The Food & Drug Administration has banned the importation of medications that are not approved for consumption in the United States.[143] They do, however, allow limited discretionary importation of these substances for individual use.[144] It is uncertain how much effect any of these provisions and policies have on the actual importation of these substances.

But the blurring does not stop there. Traditionally, drug enforcement has focused on preventing large shipments from being smuggled into the United States by cars, planes, and ships. Through the international Internet pharmacy purveyors can reach the consumers directly and send in drugs in smaller, discrete packages shipped by UPS and Federal Express rather than via carriers. Not only are the shipments more difficult to stop, but also the liability of the carriers is severely limited.[145]

The result is to effectively diminish the significance of borders in drug enforcement, with consequences that may force the United States to reevaluate its approach to drug enforcement in some areas. With the borders no longer the clear bottleneck in at least some areas of drug trafficking, three options emerge as responses. The first is to go inland after consumers instead of producers. This might be effective, but we may find that abandoning our mostly supply-side oriented controls and going after the consumers is too distasteful. Images of cancer patients being arrested for buying their painkilling hallucinogenics may be more than Americans are willing to accept. The second option is to go after the producers more heavily in their countries. While this may be desirable conceptually, the expense and jurisdictional issues involved may make it an impracticable option in many cases. A third consideration is the choice not to regulate, or to do so minimally, and concentrate on providing consumers with information.[146] This rather Libertarian approach may be necessitated by the realities of global exchange facilitated by the efficient informational exchange that is the Internet.

The first successful handling of a foreign pharmacy with United States involvement came in March of 2000 when US Customs officers cooperated with agents in Thailand to track the sales by three Thai pharmacies of illegal drugs to American customers.[147] Twenty-two people were arrested in Thailand under Thai export regulations.[148] Additionally, six American customers were also arrested for buying medications illegally.[149] While this case has symbolic value, it only begins to address the problem. Each country brings with it difficulties in cooperating working with local officials and encouraging them to make enforcement a priority.

C. State Governments and Officials

While the Internet pharmacy seems to many like a national or even international issue, the majority of pharmacy regulation prior to the rise of Internet commerce was governed by the states.[150] This is hardly surprising when one considers that prior to the Internet pharmacy – and for that matter, even today – the vast majority of prescription sales took place within the state of residence and often within a few miles of the individual's residence. While the Internet has removed many of these purchases to states far away, states still have great powers relevant to the regulation of this industry. Various factors cut both in favor and against the states as effective regulators of Internet commerce.

State attorneys general have the power to take enforcement actions against websites that operate in their states. One strategy employed by some states has been to take action against doctors or pharmacies that operate within their states that are selling to residents of other states without authority.[151] This method is arguably of limited effectiveness and requires cooperation between states. From a political standpoint, it can be difficult to motivate action by a state when the victims implicated reside in other states. Additionally, it is necessary that individuals or agencies in other states make state officials aware of such violations and provide them with other information. That said, this approach has its advantages as well. This device can be used in response to complaints by residents of a state in which a site operates as a method of closing it down or reforming it. The burdens of proof required to demonstrate operation improperly outside the state might be much lower and less complicated than those required to show improper use of care with respect to domestic residents. Further, while the state is limited to preventing operation within its state, the cost of relocating can be a substantial deterrent to improper actions, especially if other states honor the decision made by the original enforcing state and prevent the businesses and/or doctors from relocating.

With respect to "instant" web pharmacies, an effective remedy is to deprive the websites of doctors to prescribe. As discussed above, one method to accomplish this is depriving doctor's of their licenses. Nineteen states have enacted Internet prescription laws in an effort to control this area, though enforcement has varied.[152] In some states, special government bodies have jurisdiction over physicians in addition to state medical boards. In Washington state, for example, the Washington Medical Quality Assurance Commission has the power to initiate licensure for unprofessional conduct, as they did in at least one case where a doctor was working with a pharmacy to prescribe Viagra based on web-forms.[153] A similar action was taken by the Illinois Professional Regulation Department and resulting in a suspended license, though his license was reinstated fifteen days later with a $1000 fine.[154] The riches available to some doctors during the period before they get caught could be enough to convince them to take that risk.[155] Further, any many other states licensure is left entirely to the medical boards. It is possible that states add to the counterincentive, however, by prosecuting doctors under criminal statutes, though none were yet found to have done so.[156]

California has taken the most active steps in limiting Internet consultations by its physicians, passing a law in 2001 "requiring doctors to examine patients or have a valid physician-patient relationship before they can legally dispense drugs online."[157] California's Medical Board has gone so far as to employ a full-time investigator to monitor websites and find doctors that are violating the law. The names of doctors from other states found to be out of compliance will forwarded to relevant state and federal officials.


D. Other Proposed Actions

In the interest of consumer protection and public safety, the government should arguably work with AMA and NAPB to strengthen regulation of these pharmacies.[158] Several advisable provisions of the proposed Internet Prescription Drug Consumer Protection Act, typical of many legislative intiatives proposed by various members of Congress, are relevant here. The Act proposes that the Department of Health and Human Resources (DHHR) work to educate the public about the dangers of online pharmacies.[159] More specifically, DHHR could work with the AMA, NAMP, and other agencies to strengthen an information and certification network and jointly provide a single, publicized website so consumers would know where to look for assistance. This site could also serve as a central location for the collection of complaints about Internet pharmacies so that irregularities and illegalities do not go unnoticed by those best able to deal with them.[160] In practice, however, as discussed supra , much of this action has already been taken by the relevant agencies. It is best that they not be burdened with formal requirements that might be inflexible, arduous, or become outdated, but instead be allowed to cooperate as needed, as they do in many other areas.

Another proposed requirement of the Act is that online pharmacies list a physical address and licensing information on their website.[161] This would add a greater degree of accountability to these organizations by making it more likely that a consumer could locate the parties responsible in the event of fraud of malpractice, and would help prevent pharmacies from merely changing their names to avoid reputational consequences and liabilities. This would facilitate private actions by disclosing exactly what parties are responsible should any complications or malpractice occur. This requirement is in practice already required by many state boards, at least arguably. Pharmacies are required to provide that information to customers in every state. Arguably, then, what is needed is merely enforcement of state law rather than federal statute. A particularly cumbersome element of created a federal law in this case is that for it to have any meaning federal prosecutors would be called upon to enforce it. In practice, it seems unlikely that federal prosecutors would expend much energy on this area absent a national crisis in this area, which as of yet has not come about despite dire predictions.

The proposed Act finally creates a federal action for state attorneys general to seek a national injunction against an Internet pharmacy engaged in improper activity.[162] The nature of the Internet pharmacy prevents a state from effectively prohibiting it from operating in only its state. Also, only a few states may have enough violations in their borders to bring the attention of local officials. This action could help protect consumers more effectively and prevent litigation from needlessly being undertaken redundantly in every state. Its disadvantage is that it creates a federal action without federal enforcement but instead relies on the states. It is uncertain that state attorneys general would feel compelled to seek such an injunction, especially when it would involve following federal procedure and statutes that might be more cumbersome and less familiar than analogous state laws. Further, it opens up pharmacies to a new avenue of litigation with potentially devastating consequences from as many as fifty opponents. Unless the pharmacy were allowed nonmutual collateral estoppel to bind all states in an initial result, it could find win many times but then have one loss suspend its entire operations. Given these drawbacks it is difficult to endorse such a significant piece of legislation absent a more pressing problem.


As we enter the Brave New World of Internet pharmacy it is tempting to yearn for the return of simpler days where regulation of the industry at least seemed more manageable. But emulating the proverbial ostrich will not undo the changes already in place or prevent those still to come. And it is probably not possible – nor should it be our goal – to return a model of distribution identical to that which existed before. To try to regulate this industry at the same level of safety protection could very well forestall the great potential that Internet pharmacy brings for greater consumer choice, information availability, convenience, and savings.[163] Similarly, we should not abandon common sense in our zeal for fostering this new market. Instead, we must focus on maximizing the benefits that this new technology can bring in this area and be realistic as to what harms can be reduced.

Reality contradicts the notion that immediate and drastic legislative and regulatory action must be taken to curb the online purchases and perhaps even the abuse of prescription medications. Evidence reveals that there are no unique threats to national health in the “dot com” market of prescription drug delivery. The concerns that regulatory agencies bring to the table are largely influenced by the potential for consumer abuse and outright fraud, likened to the abuses in traditional systems. Much like the minor negative impact the largely unregulated supplement industry has had on public health, the threat of prescription abuse via online vendors is not dissimilar to the present problem we face with brick and mortar dispensaries, and in some cases may be less.

The illicit solicitation to sell unneeded or irresponsibly applied medications to potential customers is a growing trend that deserves attention. Advertisement driven prescription consumption maybe more of a trend of modern medicine than specifically an Internet phenomenon. Pharmaceutical companies wield powerful influence over the consumer and medical practitioners through advertising campaigns, marketing initiatives dressed like informational distributions, and direct marketing techniques.

There is a vast misconception that “pop” drug prescriptions endorsed by a local physician and purchased at a brick and mortar pharmacy is somehow less dangerous than those acquired in the wide-open world of Internet purchasing. When the consumer receives unsavory unsolicited email practically begging the prospect to try out the latest pop drug, it is supported by the advertising pharmaceutical companies push through traditional print and broadcast media. When the pharmaceutical companies use marketing tactics to influence the physicians and massive media campaigns to encourage consumers to request the prescription from their doctor, it weakens the argument that the consumer is somehow at an increased risk because they can acquire the medications online.[164]

Doctors are influenced to make treatment decisions based on information delivered to them by the pharmaceutical companies; they are given incentives to think favorably about those companies when writing their patient’s prescriptions.[165] Since the physician-patient relationship has become less intimate, there are built in opportunities for misdiagnoses and misapplication of popular medications. There is a stronger argument for regulating the entirety of prescription drug marketing than specifying the communication platform on which the consumer receives the prescription, information, and opportunity to purchase medications. Nearly everyone agrees that these "instant" prescription Internet pharmacies should be reigned in; a less common discussion that deserves nearly equal attention, however, is whether or not instant prescription local doctors should be reigned in as well.

The very real problem of re-importation is an economic concern. One of the leading advantages to cross border and overseas Internet pharmacies hinges to some degree on violating the very concept of the marketplace factors that allow pharmaceutical companies to work in the US creating new drug treatments at the pace Americans have come to expect. Violations of patent law and intellectual property rights may be the most complicated to regulate and damaging effect of purchasing medications online and abroad.

As regulatory agencies work together to learn how to deal with prescription drugs and law enforcement as applied to Internet sales, it is profoundly important that security be insured for the safety of the consumer and the manufacturers. Consumers must take precautions, should they insist on buying from overseas suppliers of medications online.[166] It is a buyer beware world when it comes to buying medications from online off-shore or cross border venders until stronger controls are settled into place. Ready availability is the only unique quality of cross border Internet pharmacy.

As consumers become more comfortable with the process of buying prescription drugs online, this new marketplace will continue to grow. It is likely to become a leading method of medication delivery in a short few years. Many encouraging things will occur to improve service, safety, and savings. “It is important that we do not overreact by piling new regulations on to an emerging marketplace," said House Commerce Committee Chairman Tom Bliley, a Republican from Virginia.[167]

The survival of opportunity is essential for economic growth, and thus dictates that we temper concerns about regulatory and manipulative controls regarding the budding Internet pharmacy . There are several real concerns and issues that must be addressed at the state and federal levels. It is essential for the security of the consumer that the governing bodies maintain clear and concise rules and regulations on transport of medication into the country, as well delivery of medications from and to domestic entities. Agencies will grow to learn how to deal with the complexities of tracking, moderating, and even containing online criminal behavior. And, the systems in place today will flower with new methods of guaranteeing quality in the new medium. It is likely that brick and mortar methods of control will work well with this new medium, despite larger volumes and fear of a borderless map. These entities still use traditional methods of delivering the medications to the consumer. They still require access to US soil through some method at some point. As the potential for harm grows, so will the powers that govern, to handle the new and different technologies of communications and transport.

[*] Student, Harvard Law School.

[1] See Nua Internet Surveys, Online Pharmacies Predicted to Thrive by 2003 , at www.nua.ie/surveys/?f=VS&art_id=905354928&rel=true (last modified May 26, 1999).

[2] See Steve Tarter, Pharmacies Must Change to Adjust to New Internet Customers , J. Star Mar. 21, 2000.

[3] See, e.g ., http://www.webmd.com, http://www.drkoop.com. The Internet is already a large supplier of health and medical information for many. In 1998, 23.3 million Americans sought medical information online, most before or instead of visiting a doctor. See Federal Trade Commission, Drugstores on the Net: The Benefits and Risks of Online Pharmacies, Before the Subcommittee on Oversight and Investigations of the Committee on Commerce United States House of Representatives (July 30, 1999), available at http://www.ftc.gov/os/1999/9907/pharmacytestimony.htm (visited Nov. 17, 2000). 1999 saw seventy-two million people, nearly three quarters of all Internet users, use these and many other lesser known Internet websites to get health-related information. See Online Health: Number of Users Continues to Grow , AM. HEALTH LINE (Aug. 5, 1999). By 2002 that number had jumped to 110 million, or fully 80% of all Internet users. See Nua Internet Surveys, Harris Interactive: The US is a Nation of ‘Cyberchondriacs’, available at http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357914 (last modified May 2, 2002). The potential for misinformation and fraud is great in this setting. See Federal Trade Commission, supra note 2. Though this is a significant issue meriting attention and is a related topic, it is not here in detail. For articles which discuss this topic at length, see generally Ross D. Silverman, Regulating Medical Practice in the Cyber Age: Issues and Challenges for State Medical Boards , 26 AM. J. L. & MED . 255 (2000) (discussing the regulation of medical advice over the Internet); .Kristen Green, Note: Marketing Health Care Products on the Internet: A Proposal for Updated Federal Regulations , 24 AM. J. L. & MED . 365 (1988) (discussing regulation of Internet advertising and deceptive advice); Leah Brannon, Regulating Drug Promotion on the Internet , 54 FOOD DRUG L.J. 599 (1999) (arguing pharmaceutical advertising is distinct from other mediums); Katy Ellen Deady, Note: Cyberadvice: The Ethical Implications of Giving Professional Advice over the Internet , 14 GEO. J. LEGAL ETHICS 891 (2001) (discussing online advice in light of current ethics rules).

[4] See William Glanz, FDA Warns Against Cyber-drugs: Agency Vows to More Closely Scrutinize On-line Pharmacies , WASH. TIMES , July 31, 1999, at C7; Online Pharmacies: Feds Push For More Regulation , AM. HEALTH LINE (Aug. 2, 1999).

[5] See, e.g., Sheryl Gay Stolberg, Internet Prescriptions Boom in the "Wild West" of the Web , N.Y. TIMES , June 27, 1999, at A1; Robin Herman, Drugstore on the Net: It's Quick, It's Convenient and It's Unregulated. Consumers Run the Risk of Harm With Do-It-Yourself Prescriptions , WASH. POST , May 4, 1999, at Z14.

[6] See, e.g., Stephen C. Burson, The Explosion of Internet Pharmacies, Pharmacist's Letter, THERAPEUTIC RESEARCH CENTER (Oct. 1999);

[7] See Regulation of Internet Pharmacies and Pharmacists: Hearing before the Senate Health, Education, Labor and Pensions Committee, 106th Congress (March 21, 2000) (Statement of Calvin J. Anthony, Executive Vice President of the National Community Pharmacists Association (NCPA), formerly the National Association of Retail Druggists.) In his statement to the committee, he said: "NCPA sees Internet pharmacy as a wonderful vehicle for good patient education and care if the proper safeguards are in place." Id.

[8] At the time of the proposal Jeffords was a Republican, though presently he is an Independent.

[9] See Jeffords Wants Internet Pharmacy Regulation , INTERNET HEALTH CARE, at http://www.internethealthcaremag.com/html/news/101900_5.htm (last modified Oct. 19, 2000) [hereinafter Jeffords ].

[10] Id.

[11] See id.

[12] Jefford’s proposal was preceded in 1999 by the more aggressive Internet Pharmacy Consumer Protection Act of 1999. See H.R. 2763 106th Cong. (1999). Neither proposal reached a vote. Rep. Thomas Bliley (R-Va.), chair of the House Commerce Committee, announced plans to introduce his own similar legislation in the 2002 session. See Jeffords , supra note 9.

[13] It is arguable that the Internet did truly alter certain fields and industries. Email has largely replaced the letter – and in some cases even the phone call or the fax – as the preferred format for many types of communication. As a result, the Postal Service has seen a considerable decline in revenues from First Class postage. The Internet has similarly become a dominant method of distribution for music; at present time little of it is provided via pay services. There is some debate over whether this has resulted in a decline in record sales, though in either case it is evident that the music industry will be forced to adapt to this change. But even in these striking cases, there is not necessarily a need for a change in laws in response to these changes. Does the Postal Service need laws to protect it from the encroachment of email? Is the record industry actually best served by suing digital delivery methods yet failing to respond with digital delivery methods of their own? Even in these areas, the revolution may not have been so revolutionary as to require drastic action.

[14] Sale of Prescription Drugs over the Internet: Hearing Before The Subcommittee on Oversight and Investigations , 105th Cong. (July 30, 1999) (statement of Ivan Fong, Deputy Associate Attorney General, Department of Justice), available at http://www.cybercrime.gov/fong9907.htm (visited Mar. 10, 2000) (“First, the government should treat physical activity and cyber activity in the same way. If an activity is prohibited in the physical world, but not on the Internet, then the Internet becomes a safe haven for that criminal activity. Similarly, conduct that is not a federal crime in the physical world should not be subject to federal criminal sanction simply because it is committed in cyberspace.”).

[15] See generally. Mitchell Waldman, Requirement of Approval of Drugs Prior to Sale , DRUGS AND CONTROLLED SUBSTANCES , 25 AM. JUR. 2D 97, Regulation of Drugs and Controlled Substances, in General , 25 AM. JUR. 2D §§ 17-129; New, Adulterated, or Misbranded Drugs .

[16] See Rebecca Porter, Internet Pharmacies: Who's Minding the Store? , 36 TRIAL 12, 12 (2000) .

[17] See National Institute for Health Care Management Research and Educational Foundation, Prescription Expenditures 2001: Another Year of Escalating Cost 10 (revised May 6, 2002), available at http://www.nihcm.org/spending2001.pdf (viewed May 7, 2002) (analyzing data by Scott-Levin for the American Institutes for Research) [hereinafter NIHCM]. This compares to a 50% growth in the sector overall over the same period. See id. at 2.

[18] See supra notes 1- 3 and accompanying text.

[19] See NIHCM, supra note 17 at 8.

[20] See id. at 2.

[21] See id. at 5.

[22] See American Booksellers Association, Bookstore Sales Close Ahead in 1999 (Mar. 3 2000), at http://www.bookweb.org/home/news/btw/2960.html (visited Mar 12, 2002).

[23] See Bob Tedeschi, Want to Be an Online Drugstore? Take a Number , CYBERTIMES: N.Y. TIMES ONLINE (Feb. 2, 1999), avaialable at http://fox.rollins.edu/~tlairson/ecom/ecom81.html (visited Mar. 13, 2002).

[24] See Shari Roan, Your Friendly Neighborhood E- Drugstore , L.A. TIMES , Sept. 20, 1999, at S1 (arguing generally that consumers have benefited and will continue to benefit from online pharmacy in a number of ways).

[25] It is generally accepted that mail-order sales have the potential to lower drug prices, and Internet pharmacies are similar in relevant ways. It is expected that this effect will grow as mail order and Internet pharmacies become larger participants in the market and gain more buying power. See NIHCM, supra note 17 at 3.

[26] See id. at 5.

[27] See id. Due to Medicaid rules, for example, prices on drugs can be mandated by state law to be from 15% to 50% below the market level. See id.

[28] See, e.g., Destination Rx, at http://www.destinationrx.com ("Over a million people have compared and saved 20% to 65% on their prescription purchases by finding the lowest online prices."); Pricescan, at http://www.pricescan.com/home_health.asp (a website listing prescription drug price comparisons alongside price lists for items such as cruises, cars, and baby clothes); Prescription Drug Price Guide, at http://www.drugpriceguide.com ("This site is designed with a simple purpose: So that you can have a list of all of the online pharmacies and compare prices. There is a big difference between the cheapest and most expensive online pharmacies, so you can save a lot of money using this site.")

[29] See infra note 82 and accompanying text.

[30] See Drugstores on the Net: The Benefits and Risks of On-line Pharmacies: Hearing Before Subcomm. on Oversight and Investigations of the House Comm. on Commerce , 106th Cong. (1999) (statement by Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, FDA)

[31] See Roan, supra note 24.

[32] See id. But see Nicole A. Rothstein,Protecting Privacy and Enabling Pharmaceutical Sales on the Internet: A Comparative Analysis of the United States and Canada ,53 FED. COMM. L.J. 343 (2001) (discussing the privacy concerns created by the sale of drugs on the Internet, particularly with respect to the security of the transmission and the use of data in marketing).

[33] See Institute for Safe Medication Practices, White Paper, A Call to Action: Eliminate Handwritten Prescriptions within 3 Years! (2000), available at http://www.ismp.org/MSAarticles/Whitepaper.html (visited Mar. 12, 2002).


[35] See W. N. Kelly, Medication Misadventuring—A major health care problem?, 9 J. OF PHARMACY PRACTICE 157, 158 (1996);

[36] See J. Lazarou, et. al. , Incidence of Adverse Drug Reactions in Hospitalized Patients: A Meta-analysis of Prospective Studies . 279 JAMA 1200, 1203-05 (1998).

[37] See D. W. Bates, et al., Relationship Between Medication Errors and Adverse Drug Events. 10 J GEN INTERN MED 199, 205 (1995).

[38] See ADE Prevention Study Group, Incidence of Adverse Drug Events and Potential Adverse Drug Events: Implications for Prevention : 274 JAMA 29, 29-30 (1995).

[39] See GROUP INSURANCE COMMISSION , GIC Takes a Stand Advocates for Improved Patient Safety , FOR YOUR BENEFIT 1, 2 (Winter 2001).

[40] These classifications were formed independently as I began framing the issues, but research revealed that other writers have found it useful to distinguish Internet pharmacies using similar categories. See, e.g., Cybermedicine: The Benefits and Risks of Purchasing Drugs Over The Internet , 5.2 J. TECH. L. & POL'Y 1, 5-7 (2000) (employing a slightly different three category approach) [hereinafterCybermedicine ].

[41] There are a number of well-known businesses that fit this description. See, e.g., http://PlanetRx.com; http://Drugstore.com (part of Amazon.com); http://WebRx.com (a.k.a. DrugEmporium.com, HeathCentral.com, and perhaps other aliases). Many other competitors, large and small, will compete in this market, if only for a short time. My personal favorite is Larry’s Pharmacy, which claims to be the first pharmacy on the Internet. See Larry’s Pharmacy, Inc., at http://www.foxfire1.com/ (visited Nov. 26, 2000). As of the date of this writing, the title URL Pharmacy.com is not in use as a pharmacy.

[42] These issues have been repeatedly discussed in the context of many different products sold on the Internet. With a few exceptions discussed within this section, pharmaceuticals are not significantly distinguishable from any other product to merit independent discussion or action.

[43] This is most relevant with respect to state nongovernmental agencies and state governments, discussed infra in Parts III.A and III.C.

[44] See, e.g., http://www.ultimaterx.com/ (visited Mar. 13, 2002); http://www.viagra-propecia-pharmacy.com (visited Mar. 13, 2002); http://www.drugstore-pharmacy.com (visited Mar. 14, 2002).

[45] See Porter, supra note 47 at 12.

[46] Se MedPrescribe, at http://www.medperscribe.com (listing drugs by categories such as "Weight Loss", "Skin Care", and "Sexual", with hypertext names of the drugs below.) See also SafeWeb Medical, at http://www.safewebmed.com (employing an almost identical interface, but listing each drug with it's official logo for brand recognition); EPrescribe, at http://www.eperscribe.com; Lowest Price Viagra Internet Drugstore, at http://www.lowest-price-viagra-drugstore.com (for when having to search a list of multiple medications is too cumbersome).

[47] See Porter, supra note 47 at 12.

[48] See Ross D. Silverman, supra note 3 at 255. I will ignore for the time the question of whether patients are really that well informed about the quality of the doctors they encounter in person, though presumably at a minimum one can be reasonably certain the local doctor is at least licensed.

[49] See Elizabeth Cohen, Viagra For Women: More and More are Turning to the Impotence Drug, CNN INTERACTIVE (Nov. 4, 1998), available at http://www.cnn.com/HEALTH/9811/04/viagra.women (last visited Mar. 8, 2002).

[50] See Bernard S. Bloom & Ronald C. Iannacone, Internet Availability of Prescription Pharmaceuticals to the Public , 131 ANNALS INTERNAL MED. 830, 832-33 (1999).

[51] See, e.g., Buy Viagra Online, http://www.exclamation-buy-viagra-order-impotence-prescriptions.com/buyviagra-buy-viagra-online.html, (last viewed May 10, 2002). The home page of this site when first viewed urged ever-so-professionally “Surprise your partner! Order Viagra Prescriptions Online - Buy Viagra Online Now!!!”. See http://www.exclamation-buy-viagra-order-impotence-prescriptions.com/workviagquest.html (as viewed Mar. 8, 2001). After a year of various types of intense scrutiny discussed infra the site appeared on last viewing substantially reformed. One might question whether enough reform has yet come given the continued existence of a pharmacy at the URL in any form.

[52] See Porter, supra note 47 at 12.

[53] See Charles Marwick, Journal Discussion: Several Groups Attempting Regulation of Internet Rx , 268 JAMA 975, 975 (1999) (describing how one site prescribed and delivered Viagra despite answers describing several contraindication including a heart condition).

[54] See Brian N. Durham, Regulating Prescription Drugs on the Internet (June 28, 1999), at http://lawyers.about.com/careers/lawyers/library/weekly/aa062899.htm (last viewed March 8, 2001).

[55] Id.

[56] The practice of ignoring traditional business practices was common among the often-twenty-something dot-commers that dominated the initial development of Web commerce and was often done with pride. There seemed to be little regard for the difference between mere traditional practices on the one hand and professional ethics and law on the other.

[57] Or, they might argue, just more clear.

[58] See infra Part III.A.

[59] But see AMERICAN MEDICAL ASSOCIATION, Internet Prescribing , REPORT OF THE BOARD OF TRUSTEES, B OF T REPORT 35-A-99, 2 (1999 ) ("Pfizer, the manufacturer of Viagra®, has filed a complaint with the Federal Trade Commission (FTC) asking the FTC to assert authority over Internet prescribing of Viagra® and to proceed against those who dispense Viagra® on-line without adequate safeguards.") SO perhaps Pfizer does prefer live consultation, if only for liability reasons.

[60] Though is weight loss, one of the most popular areas for medication advertisement, truly a non-life-threatening area of treatment? Cf, id. at 2 ("While Viagra® has been beneficial to many men with properly diagnosed erectile dysfunction, it also carries substantial risks for some patients and over 100 deaths have been associated with its use. The Board believes that prescribing this medication over the Internet in the manner described above is dangerous and highly inappropriate, and state medical boards should investigate physicians who do so.").

[61] See Find a Doctor Near You, MERK , at http://www.merck.com/product/usa/propecia/cns/ derm/physicians.html.

[62] See id.

[63] The Yellow Pages provide twenty-two listings for doctors within the ZIP code. See Yahoo! Yellow Pages, at http://yp.yahoo.com/py/ypResults.py?&&city=Prattville&state=AL&zip=36067& country=us&slt=32.489500&sln=-86.516300&cs=5&stp=y&stx=8110048 (visited Mar. 9, 2002).

[64] One expects most of these doctors would probably refuse a cat's request for Propecia, though it is less certain they would refuse a woman's request for Viagra.

[65] See, e.g ., Jolly’s Pharmacy, http://www.jollysonline.com/jollys_company.htm (as viewed Mar. 10, 2001); http://www.emedsdirect.com (last viewed Mar. 12, 2002) For a list of a number of these sites, see On-line, Off-shore and Mexican Pharmacies , http://www.opioids.com/offshorepharmacy (last viewed Mar. 12, 2002).

[66] See Timothy S. Jost, The Globalization of Health Law: The Case of Permissibility of Placebo-based Research , 26 AM. J. L. AND MED . 175, 175 (2000).

[67] See, e.g. http://www.thecanadiandrugstore.com (last viewed Mar. 10, 2001). Due to the heavy government oversight of the Canadian medical industry, American regulators are probably not terribly concerned about these Canadian websites; pharmaceutical manufacturers are probably considerably less apathetic given that Canadian sites inhibit their ability to price discriminate across the two markets.

[68] For websites dedicated to consumers with these interests, see, e.g., http://www.partnersagainstpain.com (last viewed Mar. 6, 2001); http://www.pain.com (last viewed Mar. 7, 2001).

[69] See US Customs Service, Department of the Treasury, Press Release - Consumer Alert (Feb. 20, 1998) http://www.customs.ustreas.gov/hot-new/pressrel/1998/0220-00.htm (as viewed Mar. 10, 2001) [hereinafter US Customs Service].

[70] See Dodge City, Kansas , at http://www.americanwest.com/pages/dodge.htm (visited Mar. 7, 2001).

[71] Reimportation of Prescription Drugs: Hearing on H.R. 4461 Before the House Agriculture Appropriations Comm., 106th Cong. 4461 (2000) (statement of Rep. Pete Stark, Member, House Agriculture Appropriations Comm.), available at http://www.house.gov/stark/documents/1 06th/ drugreimport.html. “In recent weeks, these provisions have been the subject of considerable controversy: Some Members have asserted that allowing wholesalers to reimport FDA-approved pharmaceuticals will essentially solve the problem of overpricing, while others say the practice will expose U.S. consumers to unsafe products.” Id.

[72] Continuing Concerns Over Imported Pharmaceuticals: Hearing Before the Comm. on Energy and Commerce, Subcomm. on Oversight and Investigations, 107th Cong. (2001) (statement of Donald deKieffer, attorney at deKieffer & Horgan in Washington , D.C.), available at http://energycommerce. house.gov/107/hearin gs/06072001Hearing267/deKieffer407.htm. Mr. deKieffer said “Diversion, in the form of parallel importing, is a violation of intellectual property rights. Included in most patents is the exclusive right to the use, including importation and exportation, of the patented good. Intellectual property rights are the financial basis of the pharmaceutical industry.” Mr. Donald deKieffer makes the argument that importing US manufactured drugs intended for other countries or importing competing drugs that would be in violation of patent laws if sold in the US makes for dangerous tinkering with the profits built into the pharmaceutical industry which maintains the creation of new and necessary medications. He goes on to offer a solution:

There needs to be better cooperation between the government agencies in charge of enforcing laws relating to diversion and counterfeit trade. According to a report issued by the U.S. General Accounting Office, the efforts of the FDA, DOJ, DEA and Customs do not always support each other. For example, sometimes the FDA releases packages of drugs detained by Customs in an effort to conserve resources. These kinds of actions are counterproductive, undermine the law, and send mixed signals to the individuals involved. Laws have been put in place to control diversion; however, it needs to be clear who is in charge of enforcement. Efficacious systems of detection and seizure as well as substantial penalties for abusers must be implemented and enforced.


[73] See, e.g., Sean P. Haney, Note: Pharmaceutical Dispensing in the "Wild West": Advancing Health Care and Protecting Consumers Through the Regulation of Online Pharmacies ,42 WM AND MARY L. REV. 575 (2000); Kerry Toth Rost, Note: Policing the "Wild West" World of Internet Pharmacies , 76 CHI.-KENT. L. REV. 1333 (2000).

[74] A roller-coaster that has generally gone downhill since most of these estimates were made.

[75] See Finding the Proper Balance Between Stores and the Net , Chain DRUG REV ., Aug. 30, 1999, at RX70 (featuring a report by Jupiter Communications predicting that online drug sales would gain a mere four percent between the publish date and the end of 2002). The President of Walgreens, expressing concerns that many of the greatest profit makers for his company – such as food sales and candy – were not as practical in the online setting, said "We're not sure dot.com pharmacies will ever make money." Brandon Copple, The Reluctant Webster , FORBES , Oct. 18, 1999, at 78. Apparently, Walgreens overcame its initial hesitancy. See http://www.walgreens.com.

[76] See Rita Rubin, Easier-to-Swallow Way to Get Your Pills Refilled: E-pharmacies Offer Convenience But Raise Safety Concerns , USA TODAY , Oct. 6, 1999, at 1D (quoting Peter Neupert, CEO of one of the largest web presences, Drugstore.com, CEO of one of the largest web presences, Drugstore.com).

[77] See Copple, supra note 75 (discussing CVS's entry into the market with its purchase of soma.com and Rite-Aid's investment in Drugstore.com). See also The Ins and Outs of Online Drugstores , CONSUMER REP ., Oct. 1999, at 42 (noting that Drug Emporium and AARP began offline but now have significant web presences).

[78] See Copple, supra note 75. See also http://www.cvs.com.

[79] See id.

[80] See Rita Rubin, Easier-to-Swallow Way to Get Your Pills Refilled: E-pharmacies Offer Convenience But Raise Safety Concerns , USA TODAY , Oct. 6, 1999, at 1D (describing a number of smaller entrants into the market from the ranks of corner drugstores) .

[81] See id. For example, a District of Columbia resident can use ConerDrugstore.com to shop at Super Pharmacy, 1019 H Street N.E., which will deliver a $30.00 minimum order of prescriptions or other items anywhere within five miles of its physical location. See http://www.cornerdrugstore.com/store/ newhome/viewstore.asp?city=Washington&state=DC (visited Mar. 11, 2002). Another similar group has joined together under http://www.rx.com.

[82] See, e.g., Cantu's Pharmacy, at http://www.canturx.com (visited Mar. 11, 2002) (specializing in diabetic care); Dougherty's Pharmacy, at http://www.doughertys.com (Mar. 9, 2002) (Dallas, Texas pharmacy specializing in AIDS care and discontinued drugs); Orange Belt Pharmacy's Respiratory Services, at http://www.obpmedicaremed.com (visited Mar. 9, 2002) (Florida-based pharmacy that specializes in "dispensing and providing home delivery of unit-dose nebulizer medications for chronically ill, asthmatic, COPD and diabetic patients"). The potential benefits to consumers from this specialization are great, particularly for patients that have rare ailments or reside in rural communities that may not provide the expertise that a specialist store can provide. That a pharmacy has roots in a traditional independent pharmacy does not always guarantee, however, that its practices are completely sound. See Campbell Drugstore, at http://www.campbelldrugstore.com (visited Mar. 10, 2002) ("A small independent pharmacy specializing in vitamins and herbal remedies for impotence and weightloss.")

[83] See Top 200 Drugs of 2000 , PHARMACY TIMES , available at http://www.pharmacytimes.com/ top200.shtml (visited Mar. 11, 2002).

[84] See id. But see Michael Vogel, Independent Pharmacies Rebound , CHAIN DRUG REV ., Nov. 22, 1999, at 3 (arguing that while many independents have shut down those remaining are seeing improved market share). With respect to the current argument, this trend would actually contribute to the thesis. A smaller number of stronger "independent" web pharmacies would be easier to regulate than hundreds of weak, smaller "garage" operations.

[85] See Reuters, Internet Retailers Face Tough Times , Mar. 2, 2000, available at http://www.internetnews.com/bus-news/article/0,,3_95662_Ext,00.html (visited Mar. 25, 2001); Associated Press, Tough Times for Online Drug Stores , June 24, 2000 (arguing online pharmacies were suffering if they lacked affiliation with traditional drugstores); Sam Howe Verhovek, Dot-Com Leaders Await a Shakeout of Losers , N.Y. TIMES , Apr. 23, 2000, at A12 (anticipating the failure of many, if not most, online pharmacies that existed at the time of writing). DrugEmporium.com WebRx.com, and WebPharmacy.com are among the startups that no longer exist.

[86] Compare http://www.google.com/search?hl=en&ie=UTF8&oe=UTF8&q=internet+pharmacy (visited May 9, 2002) with http://www.google.com/search?hl=en&ie=UTF8&oe=UTF8&q= internet+pharmacy (visited Mar 6, 2001).

[87] Compare http://search.yahoo.com/bin/search?p=internet+pharmacy (visited May 9, 2002) with http://search.yahoo.com/bin/search?p=internet+pharmacy (visited Mar 6, 2001).

[88] See Cybermedicine, supra note 40 at 10.

[89] See id. at 12.

[90] See Marwick, supra note 53 at 975-76 ("The agency views obtaining prescription drugs without the personal interaction of patient and physician as a significant problem but believes that it is one better handled by state licensing and medical boards than by the FDA.").

[91] See supra notes 54-56 and accompanying text.

[92] Marwick, supra note 53 at 976.

[93] See Porter, supra note 47 at 12.

[94] See Marwick, supra note 53 at 976. The article quotes Michael A. Friedman, MD, the FDA's deputy commissioner for operations, stating that the Internet pharmacy problem "is too big for any one organization to handle comprehensively, and the FDA doesn't have the staff, the resources, or even the authority to deal with it". Id.

[95] See American Medical News: A Descriptive Profile, at http://www.ama-assn.org/public/journals/amnews/amndescr.htm (visited Apr. 16, 2002).

[96] Id.

[97] Id. And, it appears, at least one law student.

[98] See, e.g., Tyler Chin, Rx Surveillance: Watch Out For Prescribing Over the Internet , 44 AMNEWS 40 (Oct. 22/29, 2001) available at http://www.ama-assn.org/sci-pubs/amnews/pick_01/tesa1022.htm (visited April 16, 2002) (warning physicians of greater enforcement in California against improper prescriptions online); Deborah L. Shelton, Group Warns of Unlawful Web Sales of Fertility Drugs , 43 NEWS 26 (July 10/17, 2000) available at http://www.ama-assn.org/sci-pubs/amnews/pick_00/hlsa0710.htm (visited April 16, 2002); Vida Foubister, Developing Rules for the Web , 43 AMNEWS 28 (Jul. 31, 2000) available at http://www.ama-assn.org/sci-pubs/amnews/pick_00/prsa0731.htm (visited April 16, 2002) (discussing industry self-regulation); See, e.g., Tyler Chin, When Physicians Say No to Cipro, Some People Turn to the Internet , 44 AMNEWS 41 (Nov. 5, 2001) available http://www.ama-assn.org/sci-pubs/amnews/pick_01/tesa1105.htm (visited April 16, 2002) (discussing the availability of Cipro through online consultations in the wake of the Anthrax scare).

[99] See Chin, supra note 98 (The article warns, tongue-in-cheek but with serious overtones, "Pssst! Are you prescribing online without seeing patients? Well, watch out.").

[100] See id.

[101] As fate would have it, even as I was writing this paragraph I received a SPAM email soliciting me to purchase some Viagra, Zyban, Phentermine, or Propecia. See Email from Rx Express Online Pharmacy (SuperViagra@pacbell.net) Michael Nunnelley (Mar. 8, 2002 21:15:03 EST) (on file with author) ("Doctors online to prescribe the appropriate medication.").

[102] See Cybermedicine, supra note 40 at 12.

[103] See AMERICAN MEDICAL ASSOCIATION, supra note 59 at 5. The report added that "The AMA has participated on a NABP Task Force to develop criteria for the VIPPS program." Id.

[104] See National Association of Boards of Pharmacy, VIPPS , at <http://www.nabp.net/vipps/intro.asp (visited Mar. 8, 2002).

[105] See National Association of Boards of Pharmacy, VIPPS Certification Process , at http://www.nabp.net/vipps/pharmacy/intro.asp (visited Mar. 8, 2002).

[106] Indeed, it was months into my research that I found the first details of the system. Needless to say, most individuals will put in less effort researching their online pharmacy than it takes to write a legal paper on the subject.

[107] To the extent that this is true, this problem is only greater with respect to many of the international pharmacies discussed infra in Part III.

[108] See National Association of Boards of Pharmacy, VIPPS Database Search Results , at http://www.nabp.net/vipps/consumer/listall.asp (visited May 11, 2002). WebRx.com, one of the largest online pharmacies, does not have a VIPPS certification listed on the website.

[109] See National Association of Boards of Pharmacy, Who We Are , at http://www.nabp.net/whoweare/intro.asp (visited Jan. 24, 2002).

[110] See National Association of Boards of Pharmacy, Boards of Pharmacy , at http://www.nabp.net/whoweare/boards2.asp (visited Jan. 24, 2002).

[111] The VIPPS system is discussed supra in Part III.A.

[112] See National Association of Boards of Pharmacy, supra note 109.

[113] Already, many states provide pharmacies different types of licenses based on the types of medications they can carry and other factors, so this would not be a substantial departure.

[114] See Foubister, supra note 98.

[115] See Hi-Ethics for Health Internet Ethics, Health Internet Ethics: Ethical Principles For Offering Internet Health Services to Consumers, available at http://www.hiethics.com/Principles/index.asp (visited May 4, 2002).

[116] See Foubister, supra note 98. This code deals with many areas of web-ethics including advertising and online health advice, so only a portion of the subscribers are pharmacies.

[117] See Health On the Net Foundation, FAQ about HONcode , available at http://www.hon.ch/HONcode/FAQs_HONcode.html (visited May 4, 2002).

[118] See Foubister, supra note 98.

[119] See Health On the Net Foundation, supra note 117.

[120] Compare Health On the Net Foundation, Principles , available at http://www.hon.ch/HONcode/Conduct.html (visited May 4, 2002) with National Association of Boards of Pharmacy, VIPPS Criteria, available at http://www.nabp.net/vipps/consumer/criteria.asp (visited Jan. 24, 2002).

[121] See generally their website at http://www.ihealthcoalition.org (visited April 7, 2002).

[122] See Foubister, supra note 98.

[123] Id.

[124] Id.

[125] See URAC, URAC History and Overview , available at http://www.urac.org/about/history.htm (visited Apr. 27, 2002).

[126] See John Mack, A Case for Pharmaceutical Website Accreditation , 1 PHARMA-MARKETING NEWS 1 (Jan. 2002).

[127] See URAC, URAC Directory , available at http://webapps.urac.org/directory/dirsearch.asp (visited Apr. 27, 2002).

[128] See Mack, supra note 126 ("Pharmaceutical sites already follow rigorous standards, some of which are mandated by federal regulations. But this fact is clearly not getting out to consumers, only 14% of whom by some surveys have a high degree of trust in pharmaceutical Web sites. It seems to me, therefore, that pharmaceutical companies should consider URAC accreditation as one tool to improve trust in their consumer-focused Web sites.").

[129] See Haney, surpa note 73 at 578.

[130] See Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 -395 (1994 & Supp. III 1997).

[131] Jane E. Henney et al., Internet Purchase of Prescription Drugs: Buyer Beware , 131 ANNALS OF INTN'L MED. 861, 861-62 (1999).

[132] See Lauran Neergaard, Clicks to Expose Quacks: FDA Counters Online Prescription Risk with Web Site, AP (Dec. 21, 2000), available at http://abcnews.go.com/sections/living/DailyNews/ internet_medicine991221.html (visited Mar. 9, 2001).

[133] See FDA, Reporting Unlawful Sales of Medical Products on the Internet , at http://www.fda.gov/ oc/buyonline/buyonlineform.htm.

[134] See id.

[135] See Neergaard, supra note 132.

[136] See FDA, FDA Talk Paper: FDA Launches "Cyber" Letters Against Potentially Illegal,Foreign-Based Online Drug Sites (Feb 2., 2000), available at http://www.fda.gov/bbs/topics/ANSWERS/ ANS01001.html.

[137] See FDA, "Cyber" Letters 2002 , at http://www.fda.gov/cder/warn/cyber/cyber2002.htm.

[138] See id. (listing all letters released in 2002).

[139] See Porter, supra note 47 at 12.

[140] For example, consumers are limited to no more than a 30 day supply of prescription drugs from Mexico and other foreign countries. See US Customs Service, supra note 34.

[141] The US Customs Service has been called upon increasingly to stop prescription drugs during shipping based on requirements of labeling and quantity limits. See id.

[142] The AMA and NAMP, thus far the most influential regulatory forces for the domestic Internet pharmacy industry, have little power in with respect to international Internet pharmacies.

[143] See Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 301, 335(a) (1998).

[144] See FDA REGULATORY PROCEDURES MANUAL , Chapter 9 http://www.fda.gov/ ora/compliance_ref/rpm_new2/ch9pers.html (visited Nov. 24, 2000). The Subchapter on Coverage of Personal Importations includes the guidelines for allowing discretionary exceptions. However, the FDA occasionally often institutes import alerts prohibiting discretionary important of certain drugs for any reason. See U.S. Food and Drug Administration and Department of Health and Human Services, Imports, (Mar. 11, 1999), available at http://www.fda.gov/ora/import/ora_import_system.html (visited Mar. 10, 2001).

[145] Thus a producer can ship drugs into the country with severely reduced liability.

[146] See, e.g., Food & Drug Administration, Purchasing Medications Outside the United States, at http://www.fda.gov/ora/import/purchasing_medications.htm (visited Nov. 17, 2000). This memorandum effectively explains the risks of purchasing foreign medications. Unfortunately, it is buried deeply in the FDA website such that no one would be likely to find it.

[147] See Matthew Pennington, International Crackdown U.S.: Thai Officials Move Against Online Pharmacies, AP (March 21, 2000), available at http://abcnews.go.com/sections/tech/DailyNews/ onlinedrugs000321.html (visited Mar. 9, 2001). The products in question included various types of tranquilizers, steroids, and diet pills. See id.

[148] See id. Thai law provides penalties of up to five years in prison.

[149] See id.

[150] See Haney, supra note 73 at 576-77 (citing N.J. Stat. Ann. § 45:14-1 to -36.4 (West 1995 & Supp. 2000); Va. Code Ann. § 54.1-3300 to -3319 (Michie. 1998 & Supp. 2000) as examples of traditional statutes).

[151] Illinois, Kansas, and Missouri are among the states that have taken such action. See Porter, supra note 47 at 12.

[152] See Chin, supra note 98.

[153] See AMERICAN MEDICAL ASSOCIATION, supra note 59 at 3.

[154] See id.

[155] The Illinois doctor received $65 per form, while the Washington doctor was paid $5,000 per month. See id.

[156] See Cybermedicine, supra note 40 at 8.

[157] Chin, supra note 98.

[158] The “government” here, and in other cases, refers to the Legislature, the FTC, and/or the FDA when appropriate. No doubt many reforms could be implemented either as legislation or simply new agency policy. The FDA and FTC have extensive and often overlapping powers, but cannot regulate the industry alone. For example, the FTC makes no rulings with regards to how a medical doctor may prescribe medication, nor does it have the power to revoke a doctor’s license; these powers are left to the local medical boards in each state. See Federal Trade Commission, supra note 1. This is only one example demonstrating the importance of cooperation between government and professional agencies.

[159] See Jeffords , supra note 2.

[160] Recently , the FDA created a page – which can be accessed via a prominent banner on their homepage – that fulfills some but not all of the functions envisioned above. See Buying Medicines and Medical Products Online, at http://www.fda.gov/oc/buyonline/default.htm (visited Mar. 11, 2002). With greater functionality and publicity this page has the potential to be quite useful.

[161] See id . This provision would be strengthened if the database were also included on the NABP and FDA websites.

[162] See id.

[163] While it may be appealing to give short shrift to these considerations when considering issues of health, such action would be ill advised. For individuals for which prescription drugs represent a significant portion of their overall budget, a sizeable reduction in the cost of these drugs can do a great deal to improve the quality of their lives, even in the area of health, by allowing them more money to spend on other medical care. It may not be realistic to expect the same mix of these market benefits and safety in the face of conditions that promote a drastically different equilibrium.

[164] See Jennifer Couzin, Drug Makers' Virtual Schmooze ,THE INDUSTRY STANDARD (Jun 18 2001), available at http://www.thestandard.com/article/0,1902,26936,00.html ?body_page=1. This article about the growing trend of direct marketing, technology and medicine, the article states:

The drug industry last year spent $9.3 billion marketing to doctors, nurses and physicians' assistants, according to Scott-Levin, a health consulting firm; by comparison, drug companies spent $2.5 billion reaching consumers. Those investments are apparently paying off. The five drugs most commonly pitched last year - Celebrex and Vioxx for arthritis; Claritin and Allegra for allergies; and Lipitor for high cholesterol - each brought in more than $1 billion in revenue, and together grossed more than $14.5 billion.

Id. The pitch to medical practitioners strengthens with technology even more quickly than the trend to e-push drugs online directly to consumers. The article continues: “Physicians are already bombarded with ads in medical journals and reference works. But PDAs give drug companies an unprecedented opportunity to get in front of the right doctors at the right time - when they're on the job." Id. "'You can potentially control what the physician writes.'" Id. (quoting Richard Evans, an analyst at Sanford C. Bernstein).

[165] See Brian Ross & David W. Scott, Influencing Doctors: How Pharmaceutical Companies Use Enticement to ‘Educate’ Physicians , ABC NEWS (February 21, 2002), available at http://abcnews.go.co m /sections/primetime/2020/primetime_020221_detailmen_feature.html (Visited Mar. 11, 2002)

“It's very tempting and they just keep anteing it up. And it's getting harder to say no," said Dr. Rudy Mueller. "I feel in some ways it's kind of like bribery." He continues to clarify this activities impact: "It changes your prescribing behavior. You just sort of get caught up in it," said Dr. Rudy Mueller, who said he was offered a cash payment of $2,000 for putting four patients on the latest drug for high cholesterol. The company called this a clinical study; Mueller called it a bounty.’ The impact of direct marketing to the physicians is evident in the prescriptions they write and profits the pharmaceutical companies reap.


[166] See Anne Fawcett, Rx: Overseas Sources Can Slash the Cost of Drugs, But Experts Prescribe Healthy Doses of Caution , ATLANTA J. & CONSTITUTION (Aug. 7, 2001) (“The FDA warns that those who buy drugs from foreign online sources risk getting fake, unapproved, outdated or substandard products, with little or no quality control.”)

[167] See Karen Molchanow, Cyberpharmacy Proponents Want Protection, Not Restrictions , USIS-AUSTRALIA , at http://www.usis-australia.gov/hyper/WF990805/epf410.htm ("The Justice Department reported that 'we are not at this time advocating any particular legislative action with respect to the sale of these drugs over the Internet.' Rather, Justice and other federal agencies are working to become more familiar with the legal and policy issues raised by this new market.").