Online pharmacies evading regulation

U.S. officials struggle to control prescription drug-dispensing Web sites.

Published April 17, 2000 4:00PM (EDT)

It should be a simple open-and-shut case. The Web site is in clear violation of state and federal laws governing the sale of prescription drugs. The opening lines of its home page unabashedly state as much: "Hair2Go provides safe mail order access to prescription medications from overseas pharmacies without a prescription." Among the drugs available are the impotency drug Viagra, the weight-loss drug Xenical and the hair regrowth drug Propecia.

In March, the Food and Drug Administration sent the site's operators a stern letter that explained the laws regulating the sale of pharmaceuticals and ordered the site operator to contact the FDA to resolve the matter. But that was it -- no lawsuit, no agents descending on the offices of the site operator, no formal charges brought of any kind -- and the site is still up today. Why? Because Hair2Go is based in Auckland, New Zealand.

In the last year, pharmacies and health product providers in general have caught dot-com fever. According to a study cited by the Justice Department in its recent report on confronting online crime, Internet pharmacies sold more than $1.9 billion worth of prescription and over-the-counter drugs, vitamins and a host of other health-care products in 1999. As the Justice Department report stresses, much of the new industry is legal., founded by former Microsoft executive Peter Neupert in February 1999, is one example of an apparently booming, and legal, pharmacy. Neupert says his Web site has served almost 700,000 customers since starting, and predicts the online drug market will grow from what was all but nothing in 1998 to $15 billion a year by 2004.

But the problem is that no one has any idea how much illegal activity is out there. The National Association of Boards of Pharmacy estimates at least 200 U.S.-based Web sites offer prescription drugs without a prescription. The FDA says the worldwide number could range anywhere from 200 to 1,000. Meanwhile, the NABP has certified exactly five sites as in compliance with state regulations for dispensing prescription drugs. In all fairness, the NABP offers that certification only to those who apply for it. Nevertheless, rogue sites far outnumber legitimate ones. And as government and industry officials begin to ask how they will regulate those sites, nobody seems to have a compelling solution.

No matter what regulators do to control domestic sites, they can do little more than send threatening letters to those overseas. And the more pressure regulators put on operators of domestic sites, the more they will move overseas and out of reach. Already, in 1999 the amount of pharmaceuticals seized by U.S. Customs increased by over 400 percent.

The rogue sites specialize in what officials call "lifestyle" drugs: treatments for things such as male impotence, balding, dieting and skin care. Typing the word Viagra into a search engine will bring up screen after screen of links offering the drug. Inside, most of the sites will require only an "online consultation" as a prerequisite for ordering., for example, offers a "fast, discreet and 100% private" way to start weight-loss treatment with Xenical, a prescription drug. The site requires customers submit to a $65 consultation billed only if you are approved for the drug. After asking the customer's mailing address, drug order, shipping preference and credit card information, the consultation gets around to the "Customer Medical Declaration." The customer is then asked to declare a number of medical facts: height, weight, history of a list of illnesses, if he or she has taken Xenical previously, allergies, what other medications he or she is now taking and whether she has a history of breast cancer. Finally, the customer is asked if "there are any reasons why you believe you may not be able to take Xenical?"

This process, the FDA and state regulators say, hardly replaces a prescription. The first concern is whether or not the person fielding these consultations is actually a licensed doctor. In one widely publicized incident last year, a magazine editor entered in the actual information for her neutered cat and was approved for the purchase of Viagra. There's also the question of whether or not the drug ultimately shipped is authentic and safe, as many of the sites contain no information about where the drugs come from.

And, even if the site is honest, the "online consultation" process does nothing to ensure the customer tells the truth. The focus on diet drugs is particularly worrisome from that perspective. "My worst nightmare is an anorexic girl getting hold of these drugs," says Kansas Assistant Attorney General Fran Brunner, who is working on six suits her state brought against online pharmacies last year. "The consequences are astronomical." A person with an eating disorder would merely need to fabricate the weight he or she "declares" and could have a fatal supply of diet pills.

Because the Internet offers site operators both anonymity and the ability to change their location and identity quickly, regulators depend largely on consumer complaints to spot and prosecute violators. But for illegal online pharmacies, those complaints aren't flowing in. NABP executive director Carmen Catizone says the complaints his group does hear come mostly from traditional pharmacists whose customers talk about getting a particular drug without the prescription online, or at a cheaper rate from an online pharmacy based overseas.

"The strange thing about these cases is we don't have consumers complaining," Brunner adds. "Consumers believe they should be able to get these drugs without a prescription. And they believe they are safe."

The lack of complaints also means there is little data on how much actual harm is being done. No one can say how many adverse reactions due to rogue Web sites there were last year. Given the probable profile of customers drawn to the idea of getting cheaper pharmaceuticals without the hassle of a prescription -- someone already disposed to circumvent the health-care bureaucracy -- victims are less likely to report problems to the government. "I've only known of a few cases," says FDA spokesman Tom McGinnis.

The overall health risks associated with the sorts of lifestyle drugs illegal online pharmacies target remains in question as well. The FDA has long been criticized as lax in monitoring a drug's safety once it has been approved and is on the market. In the case of lifestyle drugs, any data that is available is shrouded by the fact that people taking them often have high risks for other medical problems.

With Viagra, for instance, researchers have been unable to definitively determine whether the seemingly high number of heart attacks among men using it stem from the drug itself or from preexisting heart problems. Still, one study in the Journal of the American Medical Association showed 564 people died while taking Viagra from the time of its approval in early 1998 to July 1999 -- a death rate almost 10 times that of former treatments for erectile dysfunction.

And so the regulatory machine is cranking up to deal with the latest dot-com conundrum. State attorneys general are banding together to sue as many rogue sites as they can round up. Illinois and Missouri have sued operators of six sites, and Michigan has sent out notices of a pending suit to operators of 17 sites.

The states are trying to work together, but the effort is by no means systematic or comprehensive. "Several states get on a conference call and we share information," Brunner explains. "We are trying to teach each other, [but] does anyone have a list of 400 sites that we've divided up? No."

Meanwhile the federal government is also taking its own steps to tighten the online drug market. Rep. Ron Klink, D-Penn., has introduced a bill in Congress that would make online pharmacies disclose more information about themselves on their Web sites. The FDA is requesting $10 million from Congress to fund new staff and other resources that would be dedicated to dealing with the new industry.

But no matter what course regulators chart, one has the feeling that the effort is once again doomed by the Internet con man's ace in the hole: Ultimately, Web site operators merely have to move overseas. Indeed, the U.S. Customs Service seized almost 10,000 packages with illicit prescription drugs last year -- almost four times as many as agents seized in 1998.

"I think it's directly tied to the Internet sites," FDA spokesman McGinnis says of the spike. He notes that officials held their first real public discussion of regulation last year (at a House committee hearing on the matter in July) and that all of the states launched their legal efforts last summer. Last year also saw the big-name legitimate sites such as and take off. All of these things, he said, conspired to begin driving rogue operators overseas.

That leaves the feds, the states, the industry and the public in the hands of regulators in whatever country the operators set up shop. Here the states throw their hands up in deference to the feds; the feds throw their hands up in deference to diplomacy.

So in January, the FDA launched its cyber-letter campaign, in which the agency sends a threatening letter to rogue operators overseas. The letter carefully explains that, barring special considerations, pharmaceuticals cannot legally enter the U.S. and that the company cannot, therefore, sell its product here. The equivalent regulatory agency in the particular country also receives a copy of the letter, as do U.S. Customs officials, who then keep an eye out for packages from the company cited. McGinnis says the FDA has sent 15 such letters so far, and three companies have responded apologizing and promising to desist.

Still, the effort seems toothless. got a letter on Feb. 2. But this week, it still advertised itself on its home page as "a safe and secure Internet-based mail-order service offering Viagra." It informs customers that they do not have to present a prescription, but offers them the option of a $20 consultation and promises overnight delivery of Viagra only in the U.S. "Importation of prescription medication is legal in most countries (including the U.S.)," the defiant page reads. "Click here for the Order Form."

By Kai Wright

Kai Wright is a reporting fellow with The Investigative Fund at The Nation Institute.

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