The application of civil RICO laws to rogue internet pharmacies.

AuthorMeyers, Craig
PositionRacketeer Influenced and Corrupt Organizations Act
  1. INTRODUCTION

    Anyone in the United States who has ever been ill knows that many medications require prescriptions. (1) Although the federal government requires that pharmacists register with the Drug Enforcement Agency (DEA), the states ultimately control the licensing and regulation of pharmacists. (2) As a result of state-specific licensing and regulation, a pharmacist licensed in one state may not be permitted to fill prescriptions in another state. (3) The government's ultimate purpose in this multilevel regulation is the protection of the consumer. (4)

    The issue of pharmacy regulation is important and becomes more complex when pharmacies fill prescriptions though the Internet and across state borders. The first Internet pharmacies began operating in 1999. (5) Since then, the industry has grown phenomenally. In 1999, there was an estimated 300 to 400 online pharmacies thought to be dispensing drugs, of which, only 6 were thought to be operating legally. (6) This proliferation continued and in 2000, sources estimated that sales for 2001 would reach $1.4 billion and would exceed $15 billion by 2004. (7) The high potential for profit coupled with the anonymity of the Internet and legally ambiguous jurisdiction pose a consumer protection risk.

    Online pharmacies fall into three basic categories: those that require a written prescription from a licensed physician, those that provide a prescription to the consumer, and those that dispense drugs without the requirement of a prescription. Pharmacies that require a written prescription from a licensed physician are the closest to the traditional neighborhood pharmacy. (8) This type of pharmacy is the least susceptible to abuse, and may include cyber-versions of well known national chains. (9) Pharmacies that refer the customer to an online prescription service or provide a consultation prior to prescribing and dispensing a prescription, and pharmacies that dispense drugs without a prescription are known as rogue pharmacies. (10) In addition, about half of the online pharmacies that sell drugs in the United States do so from inside its borders. (11) Therefore, this Note will discuss the application of civil RICO laws to rogue pharmacies based in the United States.

  2. BENEFITS AND RISKS

    Online pharmacies, although a possible source of fraud and abuse, may supply some benefit to the consumer, if run legally. Internet pharmacies offer the convenience of having one's prescriptions delivered directly to the door. (12) This may be of great importance to the elderly or other people who may be unable to leave their homes. (13) Also, Internet pharmacies may benefit consumers who do not live near a pharmacy and who may prefer to receive their prescriptions in the mail. (14) In addition, Internet pharmacies may have less overhead expenditures and more competition, thus resulting in lower drug costs. (15)

    Although Internet pharmacies may be convenient because they ship prescriptions via the mail or they may not require a prescription, the risks involved with these pharmacies outweigh the benefits. (16) One of the main purposes of the Federal Food, Drug, and Cosmetic Act (FDCA) is to protect the public from unsafe or adulterated drugs. (17) When prescription drugs are improperly prescribed or distributed with no prescription at all, Congress's intent is bypassed and the public is put at risk. (18)

    The dispensing of drugs by rogue pharmacies without a proper prescription endangers the public because it bypasses the patient-doctor and patient-pharmacist relationship. (19) In one tragic case, a man, without a prescription, placed an order over the Internet for the drug Viagra (sildenafil citrate), (20) a medicine to treat erectile dysfunction and later suffered a heart attack. (21) A proper check-up and medical history would likely have shown a family history of heart disease, which is a contraindication for the drug. (22) A responsible physician would not have prescribed Viagra to a patient with a history of heart disease. (23)

    In addition to self-imposed risks, consumers who purchase drugs from rogue sites may fall prey to unethical vendors because there is no way to ever truly know what one may receive in the mail. The consumer is at risk for receiving contaminated, counterfeit, or expired drugs. (24) These counterfeit drugs may contain inactive ingredients, subpotent, or superpotent drugs that could cause unexpected side effects. (25) Even if one orders and receives the proper drug, it may be shipped or stored under unsafe conditions that may affect its potency or safety. (26) This too could result in side effects not anticipated by the consumer. (27)

    Some of the rogue sites issue online questionnaires that they claim are reviewed by doctors or they hyperlink their site to an online prescriber. (28) These services, however, provide minimal protection to the consumer. (29) On these sites, the consumer may simply fill out a brief questionnaire. (30) In theory, the operator of the site will then evaluate the answers and prescribe the requested drug. (31) However, these rogue pharmacies often fail to even confirm the answers provided by the consumer, and simply ship the drugs to the consumer's front door. (32) To illustrate the lack of actual supervision by doctors working for these rogue sites, an investigative reporter ordered Viagra for his cat. (33) He used the cat's name, real height, and weight. (34) The online pharmacy filled the prescription without asking any questions. (35) In similar instances of illegal dispensary, reporters obtained Viagra for a 98 year old man and "a prescription diet drug" for a seven year old girl. (36)

    In March of 2002, an 18 month joint investigation involving the Food and Drug Administration (FDA), DEA, Internal Revenue Service (IRS), and the U.S. Attorney's Office resulted in the indictment of a Texas pharmacist, three doctors, and two corporations, for dispensing drugs through a rogue Internet pharmacy. (37) Charges included conspiracy to illegally dispense controlled substances and conspiracy to commit money laundering. (38) According to the indictment, during the eighteen month period, the defendants illegally made more than $7.7 million from the Internet sale of only two drugs. (39) The doctors issued prescriptions to consumers without taking a history, performing an exam, or performing any type of testing. (40) The pharmacist and two corporations eventually pled guilty to illegally dispensing a controlled substance and forfeited

    $1 million. (41) It is obvious from the examples that illegal rogue pharmacies have the potential to injure consumers and therefore require regulation.

  3. REGULATION

    The regulation of drugs and pharmacies is multi-leveled and includes both the federal and state governments. On the federal level, the FDA is responsible for enforcing the FDCA. (42) The FDCA prohibits the sale or "delivery for introduction into interstate commerce," of drugs that are adulterated, misbranded, or unapproved and grants the FDA the power to bring civil or criminal charges against those who sell, import, or distribute these drugs. (43) Although the FDA may exert its jurisdiction when an Internet pharmacy violates the FDCA, it may not revoke a state pharmacist's license. (44)

    The DEA is another federal agency and is charged with enforcing the Controlled Substances Act (CSA). (45) Under this act, the DEA controls the distribution of controlled substances. (46) Not all prescription drugs, however, are considered controlled substances. (47) In fact, many drugs ordered from Internet pharmacies, including the popular "life style" drugs, are not controlled substances. (48) The CSA requires that anyone who distributes drugs, referring primarily to pharmacists, must register with the DEA. (49) The DEA, however, does not license pharmacists.

    The Federal Trade Commission's (FTC) jurisdiction overlaps with that of FDA when drugs are involved in interstate commerce and are sold to the public. The FTC has the authority to bring a civil or criminal action against an Internet pharmacy if the Internet pharmacy makes false or misleading statements on its website in violation the Federal Trade Commission Act (FTCA). (50) The FTC's jurisdiction is not specifically related to drugs but to "unfair or deceptive acts or practices in or affecting commerce." (51) When "unfair or deceptive acts or practices" involve food, drugs, or cosmetics, then the FDA and the FTC possess concurrent regulatory powers. (52)

    Although the FDA and FTC may regulate drug production and commerce, they cannot suspend or revoke a pharmacist's license. (53) The regulation of pharmacists rests primarily on the states, which designate their power to licensure boards. (54) These boards are responsible for establishing criteria for obtaining a license and have the power to suspend or revoke pharmacist's licenses. (55)

    In an attempt to avoid an increase in regulation by the federal government and to maintain standards, the National Association of Boards of Pharmacy (NABP) along with boards in Canada and Australia developed a voluntary self regulation system. (56) This Verified Internet Pharmacy Practice Site (VIPPS) program ensures quality, privacy, and compliance with state and federal regulations. (57) Due to the strict rules, only a few Internet pharmacies qualify for VIPPS approval. (58)

    The VIPPS program requires participating Internet pharmacies to post certain disclosure information, including the address for the physical location and the licensing state. (59) Of the 3,500 sites reviewed only a few are certified. (60) Certification allows the site to post a logo indicating its participation. (61) The NABP intended VIPPS to provide consumers with a method of identifying safe Internet pharmacies that meet the strict requirements of state regulation. (62)

    Although the large pharmaceutical companies may regulate the legal and illegal flow of prescription drugs into the United...

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