LEDA at Harvard Law
School LEDA at Harvard Law
School
M E M O R A N D U M
FROM: Brian Hauck
DATE: January 31, 2000
RE: Internet Pharmacies
CC: Peter Hutt
This memorandum discusses the regulation of, and enforcement regarding, the internet pharmacy industry. It concludes that the problem does not require additional regulation; existing laws are sufficient to protect against the current problems. The federal government is, however, in a position to aid state law enforcement efforts. This memorandum proposes two ways in which Congress can bolster states’ attempts to enforce their laws. First, allowing states to gain injunctions in federal court, through a much narrower version of the Telemarketing Sales Rule, would make state enforcement efforts stronger and more efficient without burdening the federal courts. Second, encouraging states to form an interstate compact that better aligned incentives and enforcement capacities would give states more power without requiring federal resources.
Internet pharmacies are already subject to the thorough regulatory structure that governs brick-and-mortar pharmarcies. The most important regulations are the federal and state laws requiring that prescription drugs be issued only with a valid prescription. [1] State statutes go further, requiring that doctors perform “good faith” examinations before they issue prescriptions.[2] Case law requires that the prescription be issued “in the course of . . . professional practice”[3] and within a valid doctor-patient relationship.[4] This duty rests both on the pharmacist and the prescribing physician.[5] Many states also require that out-of-state pharmacies obtain “nonresident” licenses before shipping prescription drugs into their state. [6]
The industry is also heavily self-regulated. The National Association of Boards of Pharmacy (“NABP”) allows internet pharmacy sites that meet and demonstrate compliance with state requirements to advertise themselves as “Verified Internet Pharmacy Practice Sites” (“VIPPS”).[7] The NABP claims that this practice “will inform consumers that the online site is a legitimate practice site licensed or registered with a state agency.”[8] Likewise, the American Medical Association (“AMA”) is drafting guidelines for doctors issuing online prescriptions.[9]
Offending internet pharmacies are violating existing laws directly and in a variety of ways. A University of Pennsylvania study found that some foreign internet pharmacies are shipping drugs into the U.S. that FDA has not approved. [10] Other internet pharmacies issue prescription drugs without a valid prescription. It is common, for example, for a doctor to prescribe a drug to a patient he or she has never met, simply based on the patient’s responses to an online questionnaire. [11] Such a practice raises two primary dangers. First, there is a potential conflict of interest; the physician choosing whether to prescribe the drug is affiliated with the pharmacy that stands to profit from the prescription.[12] Second, an online, check-the-appropriate-box examination makes it very easy for patients to falsify information in order to obtain the prescription they desire.[13] The online questionnaires often facilitate this false information by preselecting the “appropriate” responses for a given prescription.[14]
The offensive practices are already illegal. According to the AMA’s Dr. Herman Abromowitz, “[e]very state medical board” agrees that prescribing drugs without examining a patient or reviewing the patient’s records constitutes “practicing medicine at a level far below the acceptable standard of medical care.”[15] The nature of the problem, then, means that additional regulations are unnecessary. The problem is one of enforcement.
States have had some successes. Several have brought suits against internet pharmacies;[16] Kansas brought a suit against seven drug companies, six doctors, and three pharmacies,[17] and Missouri obtained a temporary restraining order against a pharmacy licensed in Texas.[18] States have begun to cooperate in their efforts, too, as the NABP has created a databank through which states inform other states of disciplinary actions they bring against pharmacists or pharmacies.[19]
In these actions, however, states frequently have trouble finding the offending pharmacy. Although pharmacies that ship drugs into a state can be considered to “practice medicine” there,[20] it is often difficult to track them down. According to the University of Pennsylvania study, only 10% of internet pharmacies reviewed “would reveal their geographic location (city and country) beyond any information offered on the Internet. No Web site would reveal the specific address of consulting physicians.”[21] This makes state enforcement efforts difficult. Kansas Attorney General Carla Stovall called finding the offenders “[o]ne of the most difficult challenges” in internet pharmacy prosecutions.[22] State officials “have had to sort through multiple shell corporations, addresses that turned out to be mail drops, overlapping addresses shared by different entities, and similar evasive tactics.”[23] The fleeting nature of internet businesses means that an offending site can easily disappear, reappearing the next day in a new “location.”[24]
Even when states can successfully enforce their laws, much of their action is inefficient. In one instance, for example, Kansas, Louisiana, and Washington were all actively pursuing a single doctor affiliated with an internet pharmacy. All three states claimed that he had prescribed drugs to patients whom he had not examined.[25] This sort of duplicative effort indicates a realm in which the federal government might be of assistance.
The problem is not one of regulation, but of enforcement: How can the federal government best facilitate states’ attempts to enforce their laws?
State access to federal courts was appropriate in the telemarketing context, because telemarketing fraud is an offense for which the mobility and anonymity of the offender, and the large, multi-state scale on which the offense can take place, render state jurisdictional limits inadequate. Just like illegitimate internet pharmacies, those who commit telephone fraud are difficult to find and, when they are found, can relocate quickly and easily. As the House Energy and Commerce Committee found in recommending the telemarketing legislation, telemarketing – though very cost-effective [27] - “can be carried on without any direct contact between sellers who may be based in one State and customers who may be based in another State.” [28] Further, “[b]ecause telemarketers are not very dependent upon a fixed location as a point of sale, they can be very mobile, easily moving from State to State.”[29] This anonymity and mobility are equally present in internet pharmacies.
Yet even when state officials could track down offending telemarketers, state jurisdictional limits made enforcement difficult. Noted the Senate Committee on Commerce, Science, and Transportation, “Even if court orders are obtained by a State against a fraudulent telemarketer in that State, the fraudulent telemarketer can continue to do business, and harm consumers, in other States.”[30] A data bank through which state and federal officials could share information on violators – much like the one the NABP currently maintains for internet pharmacies[31] – proved ineffective.[32]
The Telemarketing Sales Rule (“TSR”) proved a good response to that type of situation. By giving federal effect to state enforcement efforts, and allowing one state to obtain a nationwide injunction, a TSR-like rule can end duplicative state efforts. It also allows courts to issue injunctions that are well-tailored for their particular circumstances. In New York v. Financial Service Network , for example, the TSR allowed the court to give very specific instructions regarding future telephone promotions and the preservation of evidence.[33] At the same time, however, the rule also allows the federal government to ensure consistency in enforcement. The federal government reserved the right to intervene, be heard, and file appeals on any state-brought action.[34]
Allowing states to file in federal court has not appeared to have increased litigation,[35] and may actually decrease it. Since the TSR became effective in 1995, it has resulted in only two published opinions.[36] And in the internet pharmacy context, it could cause even fewer lawsuits. First, it would create no new cause of action. States can already bring these actions in state courts. The rule would only offer an another, more effective forum for suits that states would have brought regardless. And even if relocating the suits to federal court might increase costs, “such costs are not likely to be significant.”[37] Second, and most importantly, the possibility of one state obtaining a nationwide injunction, when appropriate, means that no longer will multiple states need to pursue the same offender. In New York v. Financial Services Network , for example, North Carolina joined New York’s prosecution.[38] Because they could achieve a nationwide injunction, however, they needed to file just one suit, not two.
Whatever the effects of the TSR, the version presented here is so much narrower that it will have even less of an effect on litigation. First, it sets a higher bar to the courtroom than does the TSR. The TSR opens the courtroom doors to any attorney general who “has reason to believe” that state residents’ “interests . . . have been or are being threatened” by illegal telemarketing practices.[39] This is a very low standard; Tennessee, for example, was able to bring an action in federal court for a phone call placed between Illinois and Utah, on the slight grounds that the call was part of a pattern that threatened Tennessee residents.[40] The language suggested here, however, is much more restrictive. An attorney general could gain access to federal court only by alleging that the internet pharmacy has actually distributed illegal drugs into the state. States may not gain a federal injunction against a pharmacy that merely “threatens the interests” of the residents, nor may they use the federal powers against in-state pharmacies,[41] a matter for which the state courts are adequately empowered.
Second, this language offers a much narrower scope of relief. The TSR allowed states to seek damages in the federal court system.[42] The bill suggested here does not allow states to use federal courts for restitution. Rather, it focuses on the injunction and halting the illegal practice. Once a state has won an injunction, it must return to state courts, which can address damages and restitution just as effectively as federal courts.
If there are still concerns that granting states this enforcement tool would unnecessarily increase litigation, additional language could be inserted requiring that a state wishing to use federal court first have its suit certified by FDA.[43] This would give the federal government the power to place a cap on such access. However, the cost of administering such a certification program could be greater than the burdens of unfettered access.[44]
Enforcing the current regulations is a substantial cost for a cash-strapped agency. By shifting enforcement power to the states, however, the federal government can preserve resources[45] and give states, which do most regulating and licensing of pharmaceutical practices anyway, discretion over how to enforce those policies.[46]
The plan also prevents a future need for further federal regulation. From many perspectives, the internet pharmacy industry is ripe for federal intervention. On a “state failure” model, under which the federal government should handle issues “when state prosecution is demonstrably inadequate,”[47] federal assistance is fast becoming appropriate. Similarly, the fact that the issue has substantial multi-state aspects means that, according to the Committee on Long Range Planning of the Judicial Conference of the United States, it deserves federal attention.[48] These concerns can be rebutted, however, if states are given adequate tools to handle the multi-state aspects on their own. The bill suggested here would do just that.
Interstate compacts have long been viewed as a useful way to handle law enforcement problems, [49] especially when the problem clearly “transcends state lines.”[50] Congress can grant its consent to such compacts in several different ways. It can consent to a specific compact that states have already negotiated.[51] Or, it can give states a blank check to enter into whatever compacts on a given topic they desire.[52]
A third approach may be more appropriate here. Under this approach, Congress encourages states to enter into an agreement by granting advance consent.[53] However, Congress still reserves the right to “veto” any compact after it has been entered into.[54] This conditional consent would be valuable here, because it would give FDA and the states significant encouragement to enter into an agreement, but it would still give Congress sufficient oversight of the regulation of electronic commerce.[55]
Under the proposed compact, party states would grant each other this power in carefully defined circumstances. If an attorney general of a state (“the recipient state”) believed that an internet pharmacy[57] located in another state (“the host state”) was improperly shipping or prescribing drugs to a patient located in the recipient state, the attorney general could seek an injunction against the offending practice in the host state’s courts. Then, if the host state’s courts agreed that the pharmacy was violating both recipient state laws and good medical practice, the court would issue an appropriate injunction. The host state would then ensure that the offender complied with the injunction’s terms.[58]
This compact would thus assist state enforcement efforts by placing enforcement responsibility on the state in the best position to enforce the regulations. It acknowledges a fundamental dilemma of interstate commercial law enforcement: the recipient state has the best incentive to bring the action, because its laws are being violated, but the host state is in the best position to enforce the regulations. For example, if a recipient state wished to ensure that an out-of-state pharmacy were complying with the recipient state’s court orders, its options would be extremely costly. It could monitor all packages coming into the state, hoping to intercept anything from the offending pharmacy. Or it could assign a law enforcement officer to monitor the activities of the out-of-state pharmacy and its affiliated pharmacists and doctors. Both options would be useless if done poorly and outrageously expensive if done thoroughly. Under the compact, however, the host state – not the recipient state – would be responsible for enforcing the order.
Thus the real gain of this compact would come not in the reciprocal access to other states’ courts, but in the gains in enforcement efficiency. These gains would come from having the monitoring of resident pharmacies and doctors in the hands of their host states. Host states are in a much better position to monitor such pharmacies. They can easily inspect packages leaving the building, and they can perform random spot checks of prescription and dispensing practices. State attorneys general would no longer hesitate to bring an action against out-of-state internet pharmacies out of fear that, even were the action successful, it would be too difficult to enforce.
Although this compact would burden the courts of states that are home to internet pharmacies, granting court access to recipient states’ attorneys general would give host state courts more power, not less. As laws currently stand, recipient states would bring these actions in their own courts. This compact, however, would give attorneys general the option to trade control for enforcement: an attorney general seeking the stronger enforcement capacities of the host state must cede control to the host states’ courts.
Moreover, state courts would in no way be “hostage” to the idiosyncracies of other states’ laws. This is so for two reasons. First, state laws in this area are substantially similar. State boards of pharmacy require valid patient-prescriber relationship,[59] and state medical boards require a doctor to examine a patient or review the patient’s records before issuing a prescription.[60] These basic requirements do not vary across state lines. Second, in order to gain an injunction in a host state court, a recipient state attorney general would have to show that the doctor had violated good medical practice.[61] This sets a double barrier, so that a host state court does not become involved merely because a pharmacy violated a technicality of another jurisdiction. Rather, for a host state court to become involved, the pharmacy must also violate good medical or pharmaceutical practice – a serious violation indeed.
Thus the compact also protects the internet pharmacies themselves. First, giving host state courts jurisdiction means that, although violators would be subject to closer monitoring, actions would be more likely to be brought in the courts of the pharmacy’s own state. This is attractive both politically, as the pharmacies can appear in a more friendly home-state court, and financially, as it will not have to travel to face action in an inconvenient location. Second, the “good medical or pharmaceutical practice” requirement creates a safe haven of sorts. For internet pharmacies that observe good practice standards, nothing would change. They would still be liable in recipient state courts. Internet pharmacies that violate these standards, however, would now be subject to the strict monitoring of home state law enforcement.
The two approaches have their advantages and disadvantages. The interstate compact, state court approach will make no alterations to the federal structure. Except for technical consent legislation, it consumes no national resources. However, interstate compacts take a long time to negotiate[62] and even longer to take effect.[63] The federal court approach, in contrast, can take effect immediately and gives state law enforcement officials a much stronger tool. However, it will relocate a small handful of cases to federal court.
Regardless, either approach is better than the status quo or some of the alternatives currently being discussed. The problem is one of enforcement, not regulation. A proper solution will assist state enforcement efforts without burdening a growing and important industry with an additional layer of regulation. Either solution offered here will do just that.
State Access to Federal Courts
Section 1. Title
This act shall be known as the Internet Pharmacy Enforcement State Empowerment Act.
Section 2. Definitions
For purposes of this act:
(a) The term “internet” means collectively the myriad of computer and telecommunications world-wide network of networks that employ the Transmission Control Protocol / Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire or radio.
(b) (1) The terms “site” and “address”, with respect to the internet, mean a specific location on the internet that is determined by Internet Protocol Numbers. Such terms include the domain name, if any.
(2) The term “domain name” means a method of representing an internet address without direct reference to the Internet Protocol Numbers for the address, including methods that use the designations “.com”, “.edu”, “.gov”, and “.org”.
(3) The term “internet protocol numbers” includes any successor protocol for determining a specific location on the internet.
(c) The term “drug” means an article subject to 21 U.S.C. § 321(g).
(d) The term “prescription drug” means a drug subject to 21 U.S.C. § 353(b).
(e) The term “internet pharmacy” means an internet site through which users can submit purchase orders for drugs or prescription drug, or conduct any other part of a sales transaction for a drug or prescription drug.
Section 3. State Access to Federal Courts
(a) In general
Whenever an attorney general of any State has reason to believe
that an internet pharmacy has shipped or distributed drugs from
outside of that State into that State, in violation of 21 U.S.C.
§ 353(b), the State, as parens patriae, may bring a civil
action on behalf of its residents in an appropriate district court
of the United States to enjoin such internet pharmacy from shipping
or distributing misbranded drugs, to enforce compliance with such
rule of the Food and Drug Administration (FDA), or to obtain
further and other relief, not including damages, restitution, or
other compensation, as the court may deem appropriate.
(b) Notice
The State shall serve prior written notice of any civil action
under subsection (a) or (f)(2) of this section upon the FDA and
provide FDA with a copy of its complaint, except that if it is not
feasible for the State to provide such prior notice, the State
shall serve such notice immediately upon instituting such action.
Upon receiving a notice respecting a civil action, FDA shall have
the right (1) to intervene in such action, (2) upon so intervening,
to be heard on all matters arising therein, and (3) to file
petitions for appeal.
(c) Construction
For purposes of bringing any civil action under subsection (a) of
this section, nothing in this section shall prevent an attorney
general from exercising the powers conferred on the attorney
general by the laws of such State to conduct investigations or to
administer oaths or affirmations or to compel the attendance of
witnesses or the production of documentary and other evidence.
(d) Actions by FDA
Whenever a civil action has been instituted by or on behalf of FDA
for violation of any rule prescribed under the Food, Drug, and
Cosmetic Act (21 U.S.C. 301 et seq.), no State may, during the
pendency of such action instituted by or on behalf of FDA,
institute a civil action under subsection (a) or (f)(2) of this
section against any defendant named in the complaint in such action
for violation of any rule as alleged in such complaint.
(e) Venue; service of process
Any civil action brought under subsection (a) of this section in a
district court of the United States may be brought in the district
in which the defendant is found, is an inhabitant, or transacts
business or wherever venue is proper under section 1391 of title
28. Process in such an action may be served in any district in
which the defendant is an inhabitant or in which the defendant may
be found.
(f) Actions by other State officials
(1) Nothing contained in this section shall prohibit an authorized
State official from proceeding in State court on the basis of an
alleged violation of any civil or criminal statute of such State,
including the seeking of damages, or restitution, or other
compensation in a matter pursuant to which the State had sought
and/or gained an injunction under subsections (a) or (f)(2) of this
section.
(2) In addition to actions brought by an attorney general of a State under subsection (a) of this section, such an action may be brought by officers of such State who are authorized by the State to bring actions in such State on behalf of its residents.
Interstate Compact Enabling Legislation
Section 1. Title
This act shall be known as the Internet Pharmacy—Court Access Interstate Compact Authorization Act.
Section 2. Authorization
The Commissioner of the Food and Drug Administration is hereby authorized to assist and encourage States to negotiate and enter into an interstate compact regarding the enforcement of state and federal regulations of internet pharmacies; review the terms and conditions of such a proposed compact in order to assist to the extent feasible in obtaining consistency with federal enforcement efforts; assist and coordinate the activities thereunder; provided , that a copy of such internet pharmacy compact shall be transmitted promptly to the Senate and the House of Representatives. The consent of Congress shall be granted to each such compact, upon the expiration of the first period of sixty calendar days of continuous session of the Congress following the date on which the compact is transmitted to it; but only if, between the date of transmittal and expiration of such sixty-day period, there has not been passed a concurrent resolution stating in substance that the Congress does not approve the compact; provided , that nothing in this section shall be construed as preventing Congress from withdrawing at any time its consent to any such compact.
Internet Pharmacy-Court Access Interstate Compact
Article I. Findings and Purpose
As used in this compact
[1] See 21 U.S.C. 353(b)(1)(c). See also , e.g. , CAL. BUSINESS AND PROFESSIONS CODE § 4059(a) (West 2000) (“No person shall furnish any dangerous drug, except upon the prescription of a physician . . . .”); NEW YORK EDUC. LAW § 6810(1) (McKinney 1999) (“No drug for which a prescription is required by [the Food, Drug, and Cosmetic Act] . . . shall be distributed or dispensed to any person except upon a prescription . . . .”).
[2] CAL. BUSINESS AND PROFESSIONS CODE § 2242 (West 1990). See also TEX. REV. CIV. STAT. ANN. art. 4542(a)(1) § 26(15) (West 1998) (making it illegal to “dispense[] prescription drugs while acting outside the usual course and scope of professional practice”).
[3] Jin Fuey Moy v. United States, 254 U.S. 189, 194 (1920).
[4] See , e.g. , Brown v. United States, 250 F.2d 745, 747 (5th Cir. 1958).
[5] See United States v. Guerrero, 650 F.2d 728, 730 n.1 (5th Cir. 1981).
[6] See , e.g. , TEX. REV. CIV. STAT. ANN. art. 4542(a)(1) § 37(b) (West 1998) (“[I]t is unlawful for a pharmacy located in a state . . . other than this state to ship, mail, or deliver to this state a prescription drug . . . dispensed under a prescription drug order to a resident of this state unless the pharmacy is licensed with the board.”); OHIO REV. CODE ANN. § 4729.551 (Anderson 1997) (“Each person, whether located within or outside this state, who sells dangerous drugs at retail for delivery or distribution to persons residing in this state, shall be licensed as a terminal distributor of dangerous drugs . . . .”); FLA. STAT. ANN. § 465.0156(1) (1999) (“Any pharmacy which is located outside this state and which ships, mails, or delivers, in any manner, a dispensed medicinal drug into this state shall be registered with the board . . . .”). The National Association of Boards of Pharmacy estimates that 40 U.S. jurisdictions require the licensing of out-of-state pharmacies. See Drugstores on the Net: The Benefits and Risks of On-line Pharmacies: Hearings Before the Subcomm. on Oversight and Investigation of the House Comm. on Commerce , 106th Cong. (1999) (hereinafter “On-line Pharmacy Hearings ) (statement of Carmen Catizone, Executive Director, National Association of Boards of Pharmacy), available in 1999 WL 20010891.
[7] See On-line Pharmacy Hearings , supra note 6 (statement of Carmen Catizone, Executive Director, National Association of Boards of Pharmacy), available in 1999 WL 20010891.
[8] Id.
[9] See On-line Pharmacy Hearings , supra note 6 (statement of Dr. Herman Abromowitz, American Medical Association), available in 1999 WL 20010892.
[10] See Bernard S. Bloom & Ronald C. Iannacone, Internet Availability of Prescription Pharmaceuticals to the Public , ANNALS INTERNAL MED. , Sept. 27, 1999 <http://www.acponline.org/journals/annals/05oct99/bloom.htm>.
[11] See Sheryl Gay Stolberg, In Internet Drug Deals, a Regulations Dilemma , N.Y. TIMES , June 27, 1999, at __.
[12] See Bloom & Iannacone, supra note 10.
[13] See id.
[14] See id.
[15] On-line Pharmacy Hearings , supra note 6 (statement of Dr. Herman Abromowitz, American Medical Association), available in 1999 WL 20010892; see also On-line Pharmacy Hearings , supra note 6 (statement of Carmen Catizone, Executive Director, NABP), available in 1999 WL 20010891 (stating that sites operating illegally often “inappropriately defin[e] the use of questionnaires or cyberspace consultations as constituting a valid patient-prescriber relationship”).
[16] See Robert Pear, Controls Sought on Drug Sales on the Internet , N.Y. TIMES , Dec. 28, 1999, at __.
[17] See State of Kansas Office of the Attorney General, Attorney General Files Lawsuits to Prohibit Internet Drug Sales (June 9, 1999) <http://www.ink.org/public/ksag/contents/news-releases/news99/internetdrugsales.htm>.
[18] See On-line Pharmacy Hearings , supra note 6 (statement of Carmen Catizone, Executive Director, NABP), available in 1999 WL 20010891.
[19] See id.
[20] See On-line Pharmacy Hearings , supra note 6 (statement of Carla Stovall), available in 1999 WL 20010887.
[21] Bloom & Iannacone, supra note 10.
[22] On-line Pharmacy Hearings , supra note 6 (statement of Carla Stovall), available in 1999 WL 20010887.
[23] Id.
[24] See Robert V. Wiesemann, Note, On-Line or On-Call? Legal and Ethical Challenges Emerging in Cybermedicine , 43 ST. LOUIS U. L.J. 1119, 1153 (1999); On-line Pharmacy Hearings , supra note 6 (statement of Rep. Fred Upton).
[25] See Stolberg, supra note 11.
[26] A draft of such a narrowed version of the rule is attached. See infra , Appendix A.
[27] HOUSE COMM. ON ENERGY AND COMMERCE, CONSUMER PROTECTION TELEMARKETING ACT, H.R. REP. NO. 103-20, at 2 (1993) [hereinafter HOUSE TELEMARKETING REPORT ].
[28] Id. See also SENATE COMM. ON COMMERCE, SCIENCE, AND TRANSPORTATION , TELEMARKETING AND CONSUMER FRAUD AND ABUSE PREVENTION ACT , S. REP. NO. 103-80, at 3 (1993) [hereinafter SENATE TELEMARKETING REPORT ] (“Telemarketing differs from other sales activities in that it can be carried out by sellers across State lines without any meeting between buyer and seller.”).
[29] HOUSE TELEMARKETING REPORT , supra note 27, at 2; see also SENATE TELEMARKETING REPORT , supra note 28, at 2 (“[T]elemarketers can by definition be very mobile, easily moving from State to State.”).
[30] SENATE TELEMARKETING REPORT , supra note 28, at 3; see also HOUSE TELEMARKETING REPORT , supra note 27, at 4 (quoting testimony that state “jurisdictional limits make it difficult to prosecute or obtain relief from fraudulent telemarketers who locate their operations outside the states in which their victims are located or move frequently to avoid detection and prosecution under state law”).
[31] See On-line Pharmacy Hearings , supra note 6 (statement of Carmen Catizone, Executive Director, National Association of Boards of Pharmacy), available in 1999 WL 20010891.
[32] See HOUSE TELEMARKETING REPORT , supra note 27, at 4.
[33] See New York v. Financial Services Network, 930 F.Supp. 865, 872 – 73 (W.D.N.Y. 1996).
[34] See 15 U.S.C. § 6103.
[35] The Administrative Office of the United States Courts does not keep records of the number of lawsuits that states filed under the TSR. Telephone Interview with Gwendolyn Coleman, Statistics Division, Administrative Office of the United States Courts (Jan. 24, 2000).
[36] The cases are New York v. Financial Services Network , 930 F.Supp. 865 (W.D.N.Y. 1996), and Tennessee v. Lexington Law Firms , No. 3:96-0344, 1997 WL 367409 (M.D. Tenn. May 14, 1997).
[37] HOUSE TELEMARKETING REPORT , supra note 27, at 6 (quoting Letter from Robert D. Reischauer, Director, Congressional Budget Office, to Hon. John Dingell, Chairman, House Committee on Energy and Commerce (Feb. 27, 1993) (describing the financial effects that allowing state access to federal courts would have on the judiciary)).
[38] See New York v. Financial Services Network , 930 F.Supp. 865, 865 (W.D.N.Y. 1996).
[39] 15 U.S.C. § 6103.
[40] See Tennessee v. Lexington Law Firms , No. 3:96-0344, 1997 WL 367409, at 113 133 143 173 183 193 223 233 243 253 283 303 313 323 333 343 363 383 393 403 413 453 493 513 523 533 553 563 583 593 613 623 633 643 653 663 673 693 703 713 723 73 733 753 763 783 793 803 83 93 (M.D. Tenn. May 14, 1997).
[41] The language requires that the pharmacy have shipped or distributed the goods into the state from outside the state. Thus an in-state pharmacy, which is unlikely to have shipped from outside the state, is subject only to state courts. The federal courts are necessary only when state jurisdiction is inadequate.
[42] See 15 U.S.C. § 6103(a).
[43] To add this restriction, section 3(a) must be amended to begin with the language, “Subject to the requirements of subsection (b) of this section,” and the current subsection (b) must be replaced with, “(b) Certification. No State may proceed with a civil action under subsection (a) of this section without first having its suit certified by FDA. FDA shall certify only those actions for which a parallel action in state court would be inadequate to enforce 21 U.S.C. § 353(b) properly.
[44] Such a requirement would certainly have administrative costs. Even if FDA were not required to issue full regulations regarding when it would grant or refuse certification, cf. Professionals and Patients for Customized Care v. Shalala, 56 F.3d 592 (5th Cir. 1995) (allowing FDA to issue “policy statements,” rather than substantive rules, provided that the agency leaves itself genuine room for discretion and imposes no legal burden), requiring FDA certification does impose an administrative cost with no obvious benefit.
[45] Cf. Terrance DeWald & Amy Blumenthal, The Telemarketing and Consumer Fraud and Abusive Protection Act: Did Congress Create a Private Right of Action for Violation of SRO Rules? , 1062 PRACTISING LAW INSTITUTE CORPORATE LAW AND PRACTICE COURSE HANDBOOK SERIES 241, 243 (1998) (stating that, for the TSR, “Congress also recognized that the problem was of such magnitude that the Commission’s resources were inadequate to protect consumers from such widespread abuse and authorized actions by state attorneys general as well as private actions by individuals”).
[46] This state enforcement would be subject only to broad oversight by FDA to assure general consistency.
[47] Geraldine Szott Moohr, The Federal Interest in Criminal Law , 47 SYRACUSE L. REV . 1127, 1142 (1997).
[48] See COMMITTEE ON LONG RANGE PLANNING OF THE JUDICIAL CONFERENCE OF THE UNITED STATES , LONG RANGE PLAN FOR THE FEDERAL COURTS 24 (1995).
[49] See, e.g. , Crime Control Consent Act of 1934, ch. 406, 48 Stat. 909 (codified as amended at 4 U.S.C. § 112(a) (1994)) (authorizing states to enter into compacts regarding crime control).
[50] PAUL T. HARDY, INTERSTATE COMPACTS: THE TIES THAT BIND 2 (1982).
[51] See, e.g. , Act of July 11, 1940, ch. 581, 54 Stat. 752 (codified as amended at 33 U.S.C. § 567a) (granting consent to an interstate compact regarding pollution in the Ohio River drainage basin).
[52] The Crime Control Consent Act of 1934, supra note 49, was this kind of “blank check” consent.
[53] The National Association of Attorneys General has in the past asked Congress to speed up the consent process. See FREDERICK ZIMMERMAN & MITCHELL WENDELL, THE LAW AND USE OF INTERSTATE COMPACTS 22 (1961) (citing National Association of Attorneys General, Conference Proceedings 167 – 74 (1957)).
[54] See , e.g. , 50 U.S.C. § 2281(g) (1994) (granting consent to any civil defense compact which Congress does not specifically reject within sixty days of the compact being filed) (repealed 1994).
[55] Appropriate consent legislation is attached. See infra , Appendix B.
[56] A draft of such a compact is attached. See infra , Appendix C.
[57] This would also apply to a pharmacist or doctor affiliated with such a pharmacy.
[58] Thus there are several things that this compact would not do. First, it would not require any sort of disclosure or information exchange among party states. There are two possible versions of such a disclosure requirement. One version would require party states to disclose pharmacies that are licensed in their state, thus letting other states know that if pharmacy P ships out of state S, S has found P to be a pharmacy in good standing. However, this accomplishes very little. Recipient states do not care whether P is licensed in S. Recipient states, for the most part, require that P be licensed in their own state. See supra note 6. Another version of the disclosure requirement would ask states to disclose pharmacies that have violated their laws, thus identifying possible offenders for other states to investigate. A compact of this sort would do very little; the NABP currently maintains a National Disciplinary Clearinghouse and Database that does roughly the same thing. See On-line Pharmacy Hearings , supra note 6 (statement of Carmen Catizone, Executive Director, National Association of Boards of Pharmacy), available in 1999 WL 20010891.
Second, this compact would not create a reciprocity agreement, through which states would recognize as valid licenses issued in other states. States are free to do this already. Moreover, licensing is but a small part of the problem. Reciprocity would do nothing to assist states trying to enforce their laws against offenders.
[59] See On-line Pharmacy Hearings , supra note 6 (statement of Carmen Catizone, Executive Director, National Association of Boards of Pharmacy), available in 1999 WL 20010891.
[60] See On-line Pharmacy Hearings , supra note 6 (statement of Dr. Herman Abromowitz, American Medical Association), available in 1999 WL 20010892.
[61] Correspondingly, the attorney general would have to show that the pharmacy or pharmacist had violated good pharmaceutical practice.
[62] See VINCENT V. THURSBY, INTERSTATE COOPERATION: A STUDY OF THE INTERSTATE COMPACT 138 (1953).
[63] The National Council of State Boards of Nursing, for example, recently concluded a multistate Nurse Licensure Compact. Since its promulgation in November of 1998, only six states have enacted it. Only five more have taken any legislative action at all. See National Council of State Boards of Nursing, State Compact Bill Status (visited Jan. 29, 2000) <http://www.ncsbn.org/files/mutual/billstatus.asp>.