Rogue Online Drugstores

Internet pharmacy legislation (H.R. 2652) has been introduced by Rep. Bart Stupak (D-PA). The bill intends to amend the Food and Drug Act by requiring Internet-based pharmacies to list the name, address and phone number of the principal place of business, the name of each pharmacist and health professional who provides medical consultation, and the states where the pharmacy, pharmacists, and other health professionals are licensed. The legislation would also give states primary enforcement authority over any violations of the act. The bill was referred to the Subcommittee on Health in July 2003.

Meanwhile, The Internet Pharmacy Consumer Protection Act (H.R. 3880) was introduced on March 3 of this year by Rep. Tom Davis (R-VA) and Rep. Henry Waxman (D-CA). This bill, which was referred to the Subcommittee on Health in March, would require:

• Specific disclosures of the names of Internet prescribing physicians and dispensing pharmacies, the states in which the practitioners are licensed and their contact information;
• An established physician-patient relationship by way of an in-person medical evaluation; and
• Provisions for state attorneys general to enforce a nationwide injunction against illicit online pharmacies and the ability to seek damages, restitution and other compensation on behalf of residents.

Is There a Doctor in the House?

Legal historians trace the learned intermediary doctrine to the early days of strict liability in tort for defective and dangerous products. Perhaps even earlier — 40 or more years ago — physicians and other licensed health care professionals were found by courts to provide a defense to pharmaceutical manufacturers in certain cases. See Magee v. Wyeth Labs, 29 Cal. Rptr. 322, 328-30 (Ct. App. 1963); Sterling Drug Inc. v. Cornish, 370 F.2d 82 (8th Cir. 1966). The learned intermediary doctrine has been recognized in the Restatement (Third) of Torts Products Liability Section 6(b) and (d). It is well-established and is premised on the role of the physician and other medical providers in American health care.

With the advent of cyberspace and with direct-to-consumer advertising on the Internet and otherwise, however, there have been some cautionary notes sounded. Some argue that the doctrine's premise is undercut by direct appeals to patients or when the role of the “intermediary” (doctor) is diminished or non-existent. In Perez v. Wyeth Labs Inc., 734 A.2d 1245 (N.J. 1999), the court held that direct-to-consumer advertising may provide an exception to the learned intermediary rule. “Our medical-legal jurisprudence is based on images of health care that no longer exist.” Id. at 1246.

Courts have held that the manufacturer of the drug satisfies any duty it has by providing proper warnings to the prescribing physicians. “It would be illogical and unreasonable to impose a greater duty on the pharmacist or druggist who properly fills the prescription than is imposed on the manufacturer. To impose a duty to warn on the pharmacist would be to place the pharmacist between the physician, who having prescribed the drug, presumably knows the patient's present condition as well as his or her complete medical history, and the patient. Such interference in the patient-physician relationship can only do more harm than good.” Moore v. Memorial Hospital of Gulfport and Winndixie Louisiana Inc., 825 So. 2d 658, 664 (Miss. 2002) citing Ramirez v. Richardson-Merrell, Inc., 628 F. Supp. 85, 87-88 (E.D. Pa. 1986). However, although “almost every state confronted with the question has declined to impose on pharmacies a duty to warn of intrinsic dangers of prescription drugs,” In re Rezulin Litig., 133 F. Supp. 2d 272 (S.D.N.Y. 2001), this, too, could fall by the wayside if the doctrine is eroded. Indeed in Little v. Purdue, 227 F. Supp. 838 (S.D. Oh. 2002), the court in an OxyContin case explicitly disagreed with the approach in Rezulin and expressed concern with defendants' argument that the learned intermediary doctrine shielded pharmacists from strict liability claims. “[E]ven if it is logical that local defendants should not be held strictly liable given that corporate defendants cannot, it is not obvious that the rule addresses negligence claims arising out of the same nucleus of facts.” See Id.

In response to the changing landscape, in 1999 the American Medical Association drafted guidelines for doctors that specifically address Internet prescriptions. The guidelines are intended to ensure that doctors who prescribe over the Internet follow minimum standards of care. This includes actually examining patients to determine a diagnosis or ensure that a medical problem really exists.

Moreover, the Federation of State Medical Boards (FSMB) has been a leader in mobilizing a national effort to rein in inappropriate Internet prescribing. In 2000, the FSMB established The National Clearinghouse on Internet Prescribing to collect and disseminate information on illicit Web sites and the physicians who prescribe for them. The clearinghouse coordinates information-sharing between regulatory and enforcement agencies, including state medical boards, the Department of Justice, the Drug Enforcement Administration and the Federal Trade Commission. Several physicians have been disciplined based on clearinghouse-supplied information.

In 2002, the Federation adopted as policy the “Model Guidelines for the Appropriate Use of the Internet in Medical Practice,” one of the first national standards established for Internet medical practice. The FSMB recommends that state medical boards “consider it unprofessional conduct for a physician to provide treatment recommendations, including issuing a prescription … unless the physician has obtained a history and adequate physical evaluation of the patient.” The FSMB report concludes that online prescribing of medications based solely on a medical questionnaire “clearly fails to meet an acceptable standard of care and is outside the bounds of professional conduct.” The FSMB proposes a four-part test to establish an acceptable standard of practice, including patient examination, discussion of treatment options and the risks and benefits of treatment, following progress to assess therapeutic outcome, and maintenance of contemporaneous medical records “available to patients and their other health care professionals.” However, the Model Guidelines have not been adopted by all of the states' licensing boards.

Verified Internet Pharmacy Practice Sites

The National Association of Chain Drug Stores (NACDS) also wants the consumer to be able to distinguish a traditional pharmacy that has an Internet presence from unlicensed Internet-only pharmacies that facilitate the ordering and dispensing of prescription medications without a valid patient-provider relationship. One way for consumers to know they are dealing with a licensed pharmacy that follows recommended-practices for the Internet is to look for the VIPPS seal, which verifies that the site has passed the rigid criteria of the Verified Internet Pharmacy Practice Sites program. See www.nabp.net/vipps/intro.asp.

VIPPS is a voluntary certification program that confirms the following pre-conditions to the VIPPS seal of approval: 1) the online pharmacy maintains all state licenses in good standing; 2) it allows information about the pharmacy to be posted and maintained on the VIPPS Web site; 3) an NABP-sanctioned team is permitted to inspect its operations, given reasonable notice; and 4) the pharmacy displays and maintains the VIPPS seal with a link to the VIPPS Web site.

Despite efforts to shore up the learned intermediary in cyberspace, some have urged that manufacturers limit the types of medications sold online and that they carefully decide whether it is “reasonable” for a particular drug to be distributed in this way. The commentators also urge that manufacturers frequently visit the sites that dispense their products to monitor the effectiveness of warning efforts and to make sure that manufacturers refuse to sell to any sites that fail to comply with contractual obligations to distribute patient warnings. See Chuang C: Is There A Doctor in The House: Using Failure-to-Warn Liability to Enhance the Safety of Online Prescribing,” 75 N.Y.U.L. Rev. 1452 (Nov. 2000).

Other Prophylactic Measures

When there is a possibility to bypass certain regulations, problems may occur that result in harm from contaminated, counterfeit or outdated drugs. While all counterfeit products deprive manufacturers of hard-earned profits and dilute the value of companies' intellectual property, counterfeit drugs are unique because they have the ability to injure consumers in a number of ways. Counterfeits may have too little or too much of an active ingredient, may contain no active ingredients at all, or may even contain potentially harmful active ingredients that the genuine drug would not contain. In addition, counterfeit drugs may be produced under unsanitary conditions, so they can spread wholly new diseases and infections to consumers.

Manufacturers and others in the chain of distribution of medical products are taking steps to protect these products and the consumer from diversion and other counterfeiting problems.

The NACDS, representing the recommendations of chain drug stores, suppliers, wholesalers and manufacturers, recommends the following measures: 1) A classification system to prioritize and focus resources on the drugs most vulnerable to counterfeiting; 2) Tracking and tracing systems (similar to imported food regulations already in place) to ensure drug authenticity for very high risk drugs. Every member of the supply channel would track the immediate source and recipient of drug products; 3) Anti-counterfeiting packaging (requesting guidance by the FDA regarding multi-level measures built into packaging – helping to combat counterfeiting of high risk drugs); 4) Strict licensing: more stringent licensing requirements on wholesalers and drug re-packagers – including tougher penalties and frequent inspections for all distributors in the prescription drug channel; and 5) Importation law enforcement. See http://www.nacds.org/index.cfm. See also the NABP's list of susceptible products (released Feb. 20, 2004) (The list, which will be updated at least annually, represents those drugs or devices that have been determined to be susceptible to adulteration, counterfeiting, or diversion, and thus those that pose the potential for a public health risk. Included on the list are Lipitor', Procrit', and Zocor'. See www.nabp.net for the complete list.)

In addition, the FDA has joined forces with state regulatory agencies and law enforcement groups to combat illegal domestic sales of prescription drugs. The agency signed agreements with the National Association of Boards of Pharmacy and the Federation of State Medical Boards representing the commitment of these organizations to help enforce federal and state laws against unlawful Internet sellers and prescribers of drugs in the United States. The Commissioner of the FDA established the FDA Anti-Counterfeiting Task Force to combat the growing threat of counterfeit drugs in the United States. The Task Force's goals were straightforward: to inhibit the introduction of counterfeit drugs into the U.S. market, to make the identification of counterfeit drugs easier, and to minimize the danger to consumers from counterfeit drugs.

The FDA final report, Combating Counterfeit Drugs: A Report of the Food and Drug Administration, was released Feb. 18, 2004. It is the FDA's first attempt to systematically, preemptively wipe out counterfeit drugs, and the measures the report suggests are often sweeping. A mandatory implementation of even some of the suggested changes would radically alter the prescription drug distribution system while also creating a wholly new relationship between the wholesale and retail drug industry and its manufacturers. Whether the suggested measures truly address the problem is another question.

The FDA is also in the process of creating a Counterfeit Alert Network to link national organizations, consumer groups, and industry representatives to provide timely and effective notification to health care professionals and consumers about counterfeit events. The MedWatch reporting form will be available both on paper and online for those who wish to report suspect counterfeiters.

Meanwhile, security and smart labels represent a growing effort by the industry. In the 1980s, Tylenol' was criminally altered (capsules were laced with cyanide), resulting in the deaths of seven people. The industry responded with induction cap seals and heat-shrink sleeves, which have now become commonplace in the pharmaceutical industry. Today, however, proposals to protect packaging and pharmaceutical products from counterfeiting range from watermarks and invisible inks, such as those used to prevent counterfeiting of $20 bills; chemicals used to trace explosives; and hologram packaging. Among other steps considered by the FDA in its report are “track-and-trace” technologies and product authentication technologies, including electronic technologies. The FDA claims that such radio frequency identification (RFID) technologies, in essence a “start-to-finish” digital program for the tracking of all prescription drugs throughout the entire drug distribution channel, will make drug counterfeiting more difficult. While it is predicted that costs for RFIDs will be reduced enough to implement the technology by 2007, RFIDs really address the issue of product decision and not counterfeiting: Remember, a counterfeiter works completely outside the system and relies on rogue sellers. Moreover, a number of groups have opposed the use of track-and-trace technology for consumer products because they may violate privacy. Garfunkel SL: The Trouble with RFID, The Nation, http://thenation.com/doc.mhtml?i=20040216 &s=garfunkel (posted 2/3/04).

Conclusion

The Internet is taking an increasing role in providing access to medical products, especially for those individuals with limited mobility and in rural areas where it may be difficult if not impossible to obtain certain products. Indeed researchers predict the market for online prescription drugs will grow from $3.2 billion in 2003 to $13.8 billion in 2007. Although buying prescription drugs online may offer advantages not available from a local drugstore, drug Web sites present certain risks to purchasers and unique challenges to regulators, law enforcement officials, policy makers and manufacturers. Efforts must to be undertaken to deal with rogue pharmacies and other rogue diverters, so that such entities and their operators can be identified and prosecuted. This will require international cooperation and a change in the laissez faire Internet culture to a mature, responsible and organized market.

Part Two of a Two-Part Article

In last month's newsletter, we looked at the problems posed by online pharmaceutical distributors that do not follow good pharmacy practice. These “rogue” pharmaceutical sites may be buying expired, substandard, contaminated or counterfeited products. Some sell without requiring customers to present prescriptions. The consumer may not be receiving proper medical oversight, which can result in administration of incorrect dosages, wrong or contraindicated drugs, or medication without adequate directions for use. These activities risk the reputations of pharmaceutical manufacturers and put them in greater peril of being sued by consumers whose adverse medical reactions could have been avoided. So, what can be done about it?

Proposed Legislation

Internet pharmacy legislation (H.R. 2652) has been introduced by Rep. Bart Stupak (D-PA). The bill intends to amend the Food and Drug Act by requiring Internet-based pharmacies to list the name, address and phone number of the principal place of business, the name of each pharmacist and health professional who provides medical consultation, and the states where the pharmacy, pharmacists, and other health professionals are licensed. The legislation would also give states primary enforcement authority over any violations of the act. The bill was referred to the Subcommittee on Health in July 2003.

Meanwhile, The Internet Pharmacy Consumer Protection Act (H.R. 3880) was introduced on March 3 of this year by Rep. Tom Davis (R-VA) and Rep. Henry Waxman (D-CA). This bill, which was referred to the Subcommittee on Health in March, would require:

• Specific disclosures of the names of Internet prescribing physicians and dispensing pharmacies, the states in which the practitioners are licensed and their contact information;
• An established physician-patient relationship by way of an in-person medical evaluation; and
• Provisions for state attorneys general to enforce a nationwide injunction against illicit online pharmacies and the ability to seek damages, restitution and other compensation on behalf of residents.

Is There a Doctor in the House?

Legal historians trace the learned intermediary doctrine to the early days of strict liability in tort for defective and dangerous products. Perhaps even earlier — 40 or more years ago — physicians and other licensed health care professionals were found by courts to provide a defense to pharmaceutical manufacturers in certain cases. See Magee v. Wyeth Labs , 29 Cal. Rptr. 322, 328-30 (Ct. App. 1963); Sterling Drug Inc. v. Cornish , 370 F.2d 82 (8th Cir. 1966). The learned intermediary doctrine has been recognized in the Restatement (Third) of Torts Products Liability Section 6(b) and (d). It is well-established and is premised on the role of the physician and other medical providers in American health care.

With the advent of cyberspace and with direct-to-consumer advertising on the Internet and otherwise, however, there have been some cautionary notes sounded. Some argue that the doctrine's premise is undercut by direct appeals to patients or when the role of the “intermediary” (doctor) is diminished or non-existent. In Perez v. Wyeth Labs Inc. , 734 A.2d 1245 (N.J. 1999), the court held that direct-to-consumer advertising may provide an exception to the learned intermediary rule. “Our medical-legal jurisprudence is based on images of health care that no longer exist.” Id. at 1246.

Courts have held that the manufacturer of the drug satisfies any duty it has by providing proper warnings to the prescribing physicians. “It would be illogical and unreasonable to impose a greater duty on the pharmacist or druggist who properly fills the prescription than is imposed on the manufacturer. To impose a duty to warn on the pharmacist would be to place the pharmacist between the physician, who having prescribed the drug, presumably knows the patient's present condition as well as his or her complete medical history, and the patient. Such interference in the patient-physician relationship can only do more harm than good.” Moore v. Memorial Hospital of Gulfport and Winndixie Louisiana Inc. , 825 So. 2d 658, 664 (Miss. 2002) citing Ramirez v. Richardson-Merrell, Inc. , 628 F. Supp. 85, 87-88 (E.D. Pa. 1986). However, although “almost every state confronted with the question has declined to impose on pharmacies a duty to warn of intrinsic dangers of prescription drugs,” In re Rezulin Litig., 133 F. Supp. 2d 272 (S.D.N.Y. 2001), this, too, could fall by the wayside if the doctrine is eroded. Indeed in Little v. Purdue , 227 F. Supp. 838 (S.D. Oh. 2002), the court in an OxyContin case explicitly disagreed with the approach in Rezulin and expressed concern with defendants' argument that the learned intermediary doctrine shielded pharmacists from strict liability claims. “[E]ven if it is logical that local defendants should not be held strictly liable given that corporate defendants cannot, it is not obvious that the rule addresses negligence claims arising out of the same nucleus of facts.” See Id.

In response to the changing landscape, in 1999 the American Medical Association drafted guidelines for doctors that specifically address Internet prescriptions. The guidelines are intended to ensure that doctors who prescribe over the Internet follow minimum standards of care. This includes actually examining patients to determine a diagnosis or ensure that a medical problem really exists.

Moreover, the Federation of State Medical Boards (FSMB) has been a leader in mobilizing a national effort to rein in inappropriate Internet prescribing. In 2000, the FSMB established The National Clearinghouse on Internet Prescribing to collect and disseminate information on illicit Web sites and the physicians who prescribe for them. The clearinghouse coordinates information-sharing between regulatory and enforcement agencies, including state medical boards, the Department of Justice, the Drug Enforcement Administration and the Federal Trade Commission. Several physicians have been disciplined based on clearinghouse-supplied information.

In 2002, the Federation adopted as policy the “Model Guidelines for the Appropriate Use of the Internet in Medical Practice,” one of the first national standards established for Internet medical practice. The FSMB recommends that state medical boards “consider it unprofessional conduct for a physician to provide treatment recommendations, including issuing a prescription … unless the physician has obtained a history and adequate physical evaluation of the patient.” The FSMB report concludes that online prescribing of medications based solely on a medical questionnaire “clearly fails to meet an acceptable standard of care and is outside the bounds of professional conduct.” The FSMB proposes a four-part test to establish an acceptable standard of practice, including patient examination, discussion of treatment options and the risks and benefits of treatment, following progress to assess therapeutic outcome, and maintenance of contemporaneous medical records “available to patients and their other health care professionals.” However, the Model Guidelines have not been adopted by all of the states' licensing boards.

Verified Internet Pharmacy Practice Sites

The National Association of Chain Drug Stores (NACDS) also wants the consumer to be able to distinguish a traditional pharmacy that has an Internet presence from unlicensed Internet-only pharmacies that facilitate the ordering and dispensing of prescription medications without a valid patient-provider relationship. One way for consumers to know they are dealing with a licensed pharmacy that follows recommended-practices for the Internet is to look for the VIPPS seal, which verifies that the site has passed the rigid criteria of the Verified Internet Pharmacy Practice Sites program. See www.nabp.net/vipps/intro.asp.

VIPPS is a voluntary certification program that confirms the following pre-conditions to the VIPPS seal of approval: 1) the online pharmacy maintains all state licenses in good standing; 2) it allows information about the pharmacy to be posted and maintained on the VIPPS Web site; 3) an NABP-sanctioned team is permitted to inspect its operations, given reasonable notice; and 4) the pharmacy displays and maintains the VIPPS seal with a link to the VIPPS Web site.

Despite efforts to shore up the learned intermediary in cyberspace, some have urged that manufacturers limit the types of medications sold online and that they carefully decide whether it is “reasonable” for a particular drug to be distributed in this way. The commentators also urge that manufacturers frequently visit the sites that dispense their products to monitor the effectiveness of warning efforts and to make sure that manufacturers refuse to sell to any sites that fail to comply with contractual obligations to distribute patient warnings. See Chuang C: Is There A Doctor in The House: Using Failure-to-Warn Liability to Enhance the Safety of Online Prescribing,” 75 N.Y.U.L. Rev. 1452 (Nov. 2000).

Other Prophylactic Measures

When there is a possibility to bypass certain regulations, problems may occur that result in harm from contaminated, counterfeit or outdated drugs. While all counterfeit products deprive manufacturers of hard-earned profits and dilute the value of companies' intellectual property, counterfeit drugs are unique because they have the ability to injure consumers in a number of ways. Counterfeits may have too little or too much of an active ingredient, may contain no active ingredients at all, or may even contain potentially harmful active ingredients that the genuine drug would not contain. In addition, counterfeit drugs may be produced under unsanitary conditions, so they can spread wholly new diseases and infections to consumers.

Manufacturers and others in the chain of distribution of medical products are taking steps to protect these products and the consumer from diversion and other counterfeiting problems.

The NACDS, representing the recommendations of chain drug stores, suppliers, wholesalers and manufacturers, recommends the following measures: 1) A classification system to prioritize and focus resources on the drugs most vulnerable to counterfeiting; 2) Tracking and tracing systems (similar to imported food regulations already in place) to ensure drug authenticity for very high risk drugs. Every member of the supply channel would track the immediate source and recipient of drug products; 3) Anti-counterfeiting packaging (requesting guidance by the FDA regarding multi-level measures built into packaging – helping to combat counterfeiting of high risk drugs); 4) Strict licensing: more stringent licensing requirements on wholesalers and drug re-packagers – including tougher penalties and frequent inspections for all distributors in the prescription drug channel; and 5) Importation law enforcement. See http://www.nacds.org/index.cfm. See also the NABP's list of susceptible products (released Feb. 20, 2004) (The list, which will be updated at least annually, represents those drugs or devices that have been determined to be susceptible to adulteration, counterfeiting, or diversion, and thus those that pose the potential for a public health risk. Included on the list are Lipitor', Procrit', and Zocor'. See www.nabp.net for the complete list.)

In addition, the FDA has joined forces with state regulatory agencies and law enforcement groups to combat illegal domestic sales of prescription drugs. The agency signed agreements with the National Association of Boards of Pharmacy and the Federation of State Medical Boards representing the commitment of these organizations to help enforce federal and state laws against unlawful Internet sellers and prescribers of drugs in the United States. The Commissioner of the FDA established the FDA Anti-Counterfeiting Task Force to combat the growing threat of counterfeit drugs in the United States. The Task Force's goals were straightforward: to inhibit the introduction of counterfeit drugs into the U.S. market, to make the identification of counterfeit drugs easier, and to minimize the danger to consumers from counterfeit drugs.

The FDA final report, Combating Counterfeit Drugs: A Report of the Food and Drug Administration, was released Feb. 18, 2004. It is the FDA's first attempt to systematically, preemptively wipe out counterfeit drugs, and the measures the report suggests are often sweeping. A mandatory implementation of even some of the suggested changes would radically alter the prescription drug distribution system while also creating a wholly new relationship between the wholesale and retail drug industry and its manufacturers. Whether the suggested measures truly address the problem is another question.

The FDA is also in the process of creating a Counterfeit Alert Network to link national organizations, consumer groups, and industry representatives to provide timely and effective notification to health care professionals and consumers about counterfeit events. The MedWatch reporting form will be available both on paper and online for those who wish to report suspect counterfeiters.

Meanwhile, security and smart labels represent a growing effort by the industry. In the 1980s, Tylenol' was criminally altered (capsules were laced with cyanide), resulting in the deaths of seven people. The industry responded with induction cap seals and heat-shrink sleeves, which have now become commonplace in the pharmaceutical industry. Today, however, proposals to protect packaging and pharmaceutical products from counterfeiting range from watermarks and invisible inks, such as those used to prevent counterfeiting of $20 bills; chemicals used to trace explosives; and hologram packaging. Among other steps considered by the FDA in its report are “track-and-trace” technologies and product authentication technologies, including electronic technologies. The FDA claims that such radio frequency identification (RFID) technologies, in essence a “start-to-finish” digital program for the tracking of all prescription drugs throughout the entire drug distribution channel, will make drug counterfeiting more difficult. While it is predicted that costs for RFIDs will be reduced enough to implement the technology by 2007, RFIDs really address the issue of product decision and not counterfeiting: Remember, a counterfeiter works completely outside the system and relies on rogue sellers. Moreover, a number of groups have opposed the use of track-and-trace technology for consumer products because they may violate privacy. Garfunkel SL: The Trouble with RFID, The Nation, http://thenation.com/doc.mhtml?i=20040216 &s=garfunkel (posted 2/3/04).

Conclusion

The Internet is taking an increasing role in providing access to medical products, especially for those individuals with limited mobility and in rural areas where it may be difficult if not impossible to obtain certain products. Indeed researchers predict the market for online prescription drugs will grow from $3.2 billion in 2003 to $13.8 billion in 2007. Although buying prescription drugs online may offer advantages not available from a local drugstore, drug Web sites present certain risks to purchasers and unique challenges to regulators, law enforcement officials, policy makers and manufacturers. Efforts must to be undertaken to deal with rogue pharmacies and other rogue diverters, so that such entities and their operators can be identified and prosecuted. This will require international cooperation and a change in the laissez faire Internet culture to a mature, responsible and organized market.