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86–641 PDF 2003

POINT, CLICK, SELF-MEDICATE: A REVIEW OF CONSUMER SAFEGUARDS ON INTERNET PHARMACY

SITES

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

MARCH 27, 2003

Serial No. 108–5

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

WILLIAM J. JANKLOW, South Dakota

MARSHA BLACKBURN, Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

CHRIS BELL, Texas

———

BERNARD SANDERS, Vermont

(Independent)

PETER SIRH, Staff Director

MELISSA WOJCIAK, Deputy Staff Director

RANDY KAPLAN, Senior Counsel/Parliamentarian

TERESA AUSTIN, Chief Clerk

PHILIP M. SCHILIRO, Minority Staff Director

(III)

C O N T E N T S

Page

Hearing held on March 27, 2003 ............................................................................ 1

Statement of:

Beales, J. Howard, Director of the Bureau of Consumer Protection, Federal Trade Commission; and William Hubbard, Senior Associate Commissioner for Policy Planning and Legislation, Food and Drug Administration ............................................................................................................ 25

Thompson, Dr. James, M.D., executive vice president, chief executive

officer, Federation of State Medical Boards; Carmen Catizone, executive

director, National Association of Boards of Pharmacy; and Richard

Blumenthal, attorney general, State of Connecticut, on behalf of the

National Association of Attorneys General ................................................. 100

Letters, statements, etc., submitted for the record by:

Beales, J. Howard, Director of the Bureau of Consumer Protection, Federal Trade Commission, prepared statement of ......................................... 27

Bell, Hon. Chris, a Representative in Congress from the State of Texas,

prepared statement of ................................................................................... 19

Blumenthal, Richard, attorney general, State of Connecticut, on behalf

of the National Association of Attorneys General, prepared statement

of ..................................................................................................................... 141

Burton, Hon. Dan, a Representative in Congress from the State of Indiana, prepared statement of .......................................................................... 11

Catizone, Carmen, executive director, National Association of Boards of

Pharmacy, prepared statement of ............................................................... 116

Davis, Chairman Tom, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 3

Hubbard, William, Senior Associate Commissioner for Policy Planning

and Legislation, Food and Drug Administration, prepared statement

of ..................................................................................................................... 44

Ruppersberger, Hon. C.A. Dutch, a Representative in Congress from the

State of Maryland, prepared statement of .................................................. 21

Thompson, Dr. James, M.D., executive vice president, chief executive

officer, Federation of State Medical Boards, prepared statement of ........ 103

Tierney, Hon. John F., a Representative in Congress from the State

of Massachusetts, prepared statement of ................................................... 24

Waxman, Hon. Henry A., a Representative in Congress from the State

of California, prepared statement of ........................................................... 6

(1)

POINT, CLICK, SELF-MEDICATE: A REVIEW OF

CONSUMER SAFEGUARDS ON INTERNET

PHARMACY SITES

THURSDAY, MARCH 27, 2003

HOUSE OF REPRESENTATIVES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 10:26 a.m., in room

2154, Rayburn House Office Building, Hon. Tom Davis of Virginia

(chairman of the committee) presiding.

Present: Representatives Davis of Virginia, Burton, Platts, Putnam, Duncan, Miller, Murphy, Turner, Janklow, Waxman, Towns,

Sanders, Maloney, Cummings, Kucinich, Tierney, Watson, Lynch,

Van Hollen, Ruppersberger, and Bell.

Staff present: Peter Sirh, staff director; Melissa Wojciak, deputy

staff director; Ellen Brown, legislative director and senior policy

counsel; Scott Kopple, deputy director of communications; Teresa

Austin, chief clerk; Joshua E. Gillespie, deputy clerk; Susie

Schulte, legislative assistant; Corinne Zaccagnini, chief information

officer; Anne Marie Turner, counsel; Phil Barnett, minority chief

counsel; Josh Sharfstein, minority professional staff member;

Earley Green, minority chief clerk; Jean Gosa, minority assistant

clerk; and Cecelia Morton, minority office manager.

Chairman TOM DAVIS. Good morning. The committee will come

to order.

I want to welcome everybody to today’s oversight hearing on the

domestic sale of drugs on Internet pharmacy sites.

The sale of consumer products over the Internet has grown exponentially over the last 10 years. Clearly, access to prescription

drugs via online pharmacies can provide benefits to consumers, including convenience and reduced cost. But, while many online

pharmacies operate in the same manner as traditional brick-andmortar drug stores and comply with the standards of State licensing authorities, not all pharmacies practicing over the Internet are

legitimate sites.

The Internet creates an easy environment for illegitimate sites to

bypass traditional regulations and established safeguards for the

sale of prescription drugs. Public health and consumer safety issues

arise when the sale of prescription drugs occurs without a valid

prescription or adequate physician supervision. It is now very simple to obtain virtually any medication online without ever seeking

or speaking with a physician. All a consumer has to do is type the

name of the drug into a search engine, quickly identify a site sellVerDate 11-MAY-2000 08:33 May 19, 2003 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 D:\DOCS\86641.TXT HGOVREF1 PsN: HGOVREF1
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ing the medication, and then click to purchase. Although some sites

require the consumer to fill out a health questionnaire to be reviewed by a physician prior to the prescription, consumers can easily manipulate their medical history on some questionnaires to be

approved for the drug they desire. On other sites, no questionnaire

is even required.

I think all of us here today have opened our in-boxes only to find

dozens of e-mails advertising medications at low cost with no prescription required. The most popular of those drugs sold online are

so-called ‘‘lifestyle’’ drugs, including Viagra and Propecia. After

September 11th there was a sharp rise in the sale of Cipro over

the Internet without a prescription. The risks of this kind of selfmedicating can include adverse reactions from inappropriately prescribed medications, dangerous drug interactions, and use of counterfeit or tainted products.

I think it is important to note that several of these illegitimate

sites fail to provide information about contraindications, potential

adverse effects, and efficacy.

Regulating these Internet pharmacies can be a challenge for Federal and State enforcement capabilities. Authorities have trouble

tracking down Internet sites that fail to comply with State licensing requirements and standards. Many don’t disclose identifying information, change their names and appearances often, and sometimes disappear without a trace. Accountability is impossible when

the violators cannot be identified and located.

Another regulatory challenge is the application of State regulations across multiple jurisdictions by multiple State and Federal

authorities. Historically, States have been the primary enforcement

authority with respect to the practice of medicine and dispensing

of prescription drugs; however, the Food and Drug administration

and the Federal Trade Commission also have a role to play.

We will hear the testimony from several witnesses to discuss the

regulatory challenges created by the domestic sale of prescription

drugs over the Internet. I want to thank all of our witnesses for

appearing here with us today.

I would now like to yield to Mr. Waxman for an opening statement.

[The prepared statement of Chairman Tom Davis follows:]

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Mr. WAXMAN. I would like to thank Chairman Davis for holding

this hearing today on the proliferation of domestic Web sites that

sell medications without a valid prescription. These Web sites occupy a dark and dangerous corner of the U.S. health care system.

With the simple click of a mouse, consumers can purchase virtually

any prescription medication without knowing who is hosting the

Web site, who is writing the prescription, or who is dispensing the

drug. On these sites, no prescription from your doctor is required.

On the basis of a cursory medical questionnaire or no questionnaire

at all, an anonymous physician prescribes medication that can be

lethal.

This practice has been rejected as substandard care by the State

medical boards, and for good reason. Without a real visit with a

physician that explores the risks and benefits of a prescription

drug, a consumer can wind up suffering severe and unnecessary

side effects. Children can order drugs online without their parents’

or their doctor’s knowledge.

There is also concern among experts that easy access to antibiotics like Cipro through Internet pharmacies fosters drug resistance and therefore threatens us all.

One reason for the persistence of Web sites selling drugs without

valid prescriptions is a gap in consumer safeguards and Government enforcement. On one side of this gap are Federal agencies

that are charged with protecting consumers. Federal law prohibits

false and misleading advertising and requires certain drugs only be

dispensed with a prescription. However, while Federal agencies

have taken action against Web sites when there is a clear consumer fraud, the Federal Government has generally deferred to

States on the central question of what is a valid prescription.

On the other side of the gap are State agencies, including boards

of medicine and pharmacy, and the attorneys general. Many States

would like to shut these sites down, but often lack the legal authority to do so. For example, if one attorney general gets an injunction

against one Web site, that injunction applies only in one State. It

should not be necessary to require 50 separate lawsuits to shut

down every dangerous Internet site.

Today we will hear from the key agencies and organizations on

both sides of this gap. I look forward to hearing about existing efforts to protect consumers and to discussing possible solutions to

this ongoing problem.

I want to thank all the witnesses for appearing today.

Thank you, Mr. Chairman.

[The prepared statement of Hon. Henry A. Waxman follows:]

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Chairman TOM DAVIS. Thank you very much.

Any additional statements? Mr. Burton.

Mr. BURTON. Mr. Chairman, thank you very much. I agree with

what Representative Waxman and you just said. Those who are

selling drugs without prescriptions over the Internet should be

prosecuted to the full extent of the law; however, 10 years ago very

few people owned a personal computer and the Internet was only

used by the military and scientific communities. Ten years ago the

Internet was available to most Government agencies and the corporate world, and today every desk in every office of the country

has a computer hooked up to the Internet, and a majority of American homes have at least one computer and Internet access.

Americans can read the Congressional Record the day it is printed. We as a population buy books, music, video games, furniture,

flowers, clothing, and airline tickets online. At the same time,

Americans’ dependence on prescription drugs has risen dramatically: 75 percent of Americans between the ages of 50 and 64 are

on at least one prescription drug; 14 percent of women age 65 are

on five prescription drugs in any given weeks. And I have friends

who spend $600 or more a month on prescription drugs. Anyone

with a chronic health condition likely is in the same situation.

The price of prescription drugs in the United States is the highest of any country on Earth—highest of any country on Earth. In

fact, in these troubled economic times the pharmaceutical industry

is thriving. Several companies had 10 to 15 percent growth just

last year and their bottom line is unbelievable, the profits they are

making. Many Americans—in particular, our senior citizens—are

looking for legitimate ways to buy their needed prescriptions at

lower prices. Other Americans prefer the convenience of having

their prescriptions delivered directly to their home.

The technology highway, once a rough dirt road, has become a

multi-lane superhighway intersecting with Americans’ avenue of

need for lower-priced prescription drugs.

As Federal officials looking at this emerging field of Internet

pharmacies, we must move forward cautiously in determining what

type of traffic controls, if any, we place on the intersection between

consumers and the lawful Internet pharmacy. The roads and intersection already exist. Americans should have the right to lawfully

purchase prescription drugs through licensed Internet pharmacies

both in the United States and Canada, as long as those prescriptions are valid and given to the pharmaceutical Internet businesses.

Those who violate the law by operating illegal pharmacies should

be prosecuted. Those wholesalers who provide drugs to non-licensed

pharmacies should also be prosecuted. The jurisdiction of parts of

these roads is not that of the Federal Government. The regulation

of pharmacies and the practice of medicine both are managed by

State governments. I am a firm believer in States’ rights and do

not wish for the Federal Government to co-opt State regulatory authority.

I’m also a strong proponent of the free enterprise system that is

the underpinning of our democracy; therefore, I believe that anything we decide to do at the Federal level must respect rights of

the State governments, the rights of lawful businesses to operate,

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and the rights of Americans to use the Internet to buy prescription

drugs for which they have a legitimate prescription at the best

price available.

I look forward to hearing from our witnesses today. Today’s hearing is focused on domestic Internet pharmacies. We have another

problem relating to Internet pharmacies that we will be addressing

in a subcommittee hearing next Thursday, and that is the ability

for Americans to maintain access to lower-priced prescription drugs

through Canadian online pharmacies.

I have cosponsored legislation with Congressman Sanders and 50

other legislators at this time—and I fully believe we will have

maybe over 100 very shortly—that will institute monetary fines on

pharmaceutical companies that reduce access of Americans to

lower-cost drugs online from Canadian pharmacies.

Thank you, Mr. Chairman.

[The prepared statement of Hon. Dan Burton follows:]

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Chairman TOM DAVIS. Thank you very much.

Any other opening statements? Mr. Towns.

Mr. TOWNS. Thank you very much, Mr. Chairman, for holding

this oversight hearing on safeguards on Internet pharmacy. I would

like to commend you and Ranking Member Waxman for shedding

light on this issue.

Today’s Internet technology has revolutionized the purchase and

delivery of goods and services, so it should come as no surprise that

many people are utilizing this technology to purchase prescription

drugs, as well. However, what is surprising and often frightening

is the ease of which it can be done.

The purchase of prescription drugs through the Internet raises

some very troubling safety concerns. For starters, there is a legitimate question of whether a doctor or other medical professionals

are actually involved in the prescription drug transaction. Even if

there is a doctor, the consumer has no assurances of the medical

professional’s credentials or how thoroughly he or she reviews the

medical information supplied. A brief online questionnaire may

miss essential information on whether a specific drug is safe for a

patient.

Additionally, children may try to use the Internet to get potentially dangerous prescription drugs. Although the FDA has the authority to take action against the sale of prescription drugs without

a valid prescription, the agency has left it up to States to determine what is a valid prescription.

Since a person in New York can buy a prescription drug through

an Internet site based in Texas, it seems to me that the regulatory

scheme is inadequate.

I’m not in favor of shutting down all Internet pharmacy sites;

however, it appears that better oversight and control is definitely

needed. Purchasing drugs through the Internet can offer consumers

incredible benefits. It offers improved access for home-bound patients and increases privacy for a person who has a disease that

may carry a social stigma, but we must make sure that a licensed

medical practitioner is involved in all prescription drug transactions.

I look forward, Mr. Chairman, to hearing from the witnesses.

This is a very important hearing.

On that note I yield back.

Chairman TOM DAVIS. Thank you very much.

Any other opening statements over on this side? Mr. Janklow.

Mr. JANKLOW. Mr. Chairman, I am going to be brief. Thank you

very much for conducting this hearing. It is obvious one of the

major problems we have in this country is people just cannot get

prescription drugs at a price that they can afford to pay for them,

and, given the utility value of the Internet, they are able to very

quickly lower the cost. It is not always just a case of people trying

to circumvent the system as much as it is a lot of people trying to

find adequate drugs.

We talk about the Canadian situation. The fact of the matter is

this Congress passed statutes that were signed into law by the

President of the United States, and the last two Secretaries of

Health and Human Services have both refused to do the necessary

documentation that the law required to deal with the importation

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of drugs into the United States. For some reason, they’ve chosen

just not to comply with the law.

We talk about using the courts for civil actions to close people

down. The fact of the matter is a contested civil case in America

takes longer from start to finish than World War II did. There isn’t

any way that we have an efficient adjudicatory process in this

country. Someone can get an injunction on the front end, but by

the time it is finished on the back end it is several years later. And

there are hundreds of these cases that could be brought.

This is one of those rare times when, under the U.S. Constitution, where it was envisioned that Congress would regulate commerce between the States. This is something that’s within the

unique framework of the national Government to deal with.

Mr. Chairman, I think you have shown great insight in moving

forward on this particular issue, and I really look forward to the

testimony as to what people think we can do, as opposed to all the

brilliant things they are doing.

Thank you.

Chairman TOM DAVIS. Thank you very much.

Mr. Sanders.

Mr. SANDERS. I apologize for jumping ahead of my colleague

here.

Chairman TOM DAVIS. You can yield at the end of your 5 minutes

and we can get more in. That’s fine. You are recognized for 5 minutes.

Mr. SANDERS. Thank you, Mr. Chairman. Mr. Chairman, thank

you for holding this important hearing. The issue of prescription

drugs is something that I have been heavily involved in not only

in my 12 years in Congress but in years before that, as well. As

my friend, Mr. Janklow indicated, the reason for my concern is that

the American people pay by far the highest prices in the world for

prescription drugs. There are millions of senior citizens in this

country who are unable to afford prescription drugs and suffer—

and in some cases die—as a result of that reality.

Year after year the pharmaceutical industry leads every other industry in the profits that they make while millions of Americans

are unable to afford prescription drugs. Many of these companies

pay their CEOs extravagant compensation packages. And let us be

honest and bring the real world into this room: the pharmaceutical

industry is the most powerful lobby in the United States. In the

last several years, Mr. Chairman, the pharmaceutical industry has

spent hundreds and hundreds of millions of dollars in campaign

contributions to the vast majority of the Members of Congress, to

both political parties, especially the Republican party. The pharmaceutical industry has spent huge sums of money on lobbying. There

are over 600 paid lobbyists from the pharmaceutical industry who

descend on this institution any time that any Member comes up

with an idea to lower the cost of prescription drugs.

Now, the reality of what is going on in America today—and I

know, Mr. Chairman, this is a little bit divergent from your discussion, important issues that you are raising today—but the reality

is that approximately 1 million Americans are now going to Canada in order to buy prescription drugs because the same exact medVerDate 11-MAY-2000 08:33 May 19, 2003 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 D:\DOCS\86641.TXT HGOVREF1 PsN: HGOVREF1
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icine sold in Canada is sold for a fraction of the price that it’s sold

in the United States.

Mr. Chairman, several years ago I became the first Member of

Congress to take a group of citizens from the State of Vermont over

the Canadian border. Let me tell you one story. Mr. Chairman, I

know that you are aware of the very serious problem of breast cancer in this country and how many women are struggling for their

lives. Timoxaphin is one of the most widely prescribed breast cancer drugs in this country. The women who went with me over the

border were able to purchase timoxaphin—the same, exact product,

not a generic, Mr. Chairman—for one-tenth the price, 10 percent

of the price that they’re paying here in the United States.

Now, what is going on is that in the last several years—and I’m

proud to have been an active player in that process—about 1 million Americans are either going over the border to purchase prescription drugs in Canada or else they are increasingly using the

Internet.

Obviously, the pharmaceutical industry, which contributes so

much money in the political process, is putting a great deal of pressure on the FDA and on Members here to say, ‘‘No, let the old people suffer. Let them die, because we have to protect our profits.

Don’t let them go to Canada,’’ although there has not been one indication that the regulatory system in Canada is any inferior to

what we have here, not one indication, to the best of my knowledge, that one medicine, one prescription coming over the border

has caused anybody any problems.

So, Mr. Chairman, let me go on record right now as saying to the

FDA and to Mr. Hubbard and those other people here that we are

going to fight you and we are going to try everything that we can

to prevent you from forcing people in this country to suffer and die

so that the pharmaceutical industry can continue to rake up huge

profits and provide campaign contributions to Members of the Congress.

Thank you very much, Mr. Chairman.

Chairman TOM DAVIS. Any other statements? Mr. Bell.

Mr. BELL. Thank you, Mr. Chairman. I want to thank you and

the ranking member for focusing attention on what I think is a

very important issue, and I look forward to hearing the testimony

here today.

As the number of people accessing Internet pharmacy sites has

increased from 45 million in 1999 to an estimated 320 million by

the year 2005, it is imperative that the Federal Government lead

the way to ensure that these sites are safe for consumer use. While

I don’t completely disagree with my colleague, Mr. Sanders, that I

do think that consumers should have access to affordable prescription drugs, we need to make sure that it is safe.

Although law-abiding Internet pharmacies benefit modern health

care in numerous ways, some Internet pharmacies conduct illegal

and unsafe prescribing and dispensing practices that can endanger

the health of their patients. Because many online pharmacies offer

a variety of drugs, including controlled substances, and do not adhere to ethical guidelines to protect patients, the potential for harm

to consumers is massive. These pharmacies present a significant

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danger to health care consumers and pose a regulatory nightmare

that I’m sure we’ll hear more about today.

Mr. Chairman, I’m concerned that the Federal Government is

merely playing catch-up and stands to lose this race if we don’t

take immediate action.

I thank you again for calling this hearing and I look forward to

working with the committee to find a plausible solution.

Thank you, Mr. Chairman.

[The prepared statement of Hon. Chris Bell follows:]

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Chairman TOM DAVIS. Thank you.

Mr. Ruppersberger.

Mr. RUPPERSBERGER. Yes. Today we are going to discuss online

pharmacies. The cost of prescription drugs are on the rise and everyone is looking to save money, and my concern today though is

for the consumer. I think there are certain issues and questions

that we need to discuss, and hopefully you will discuss them in

your testimony.

Are these sites secure? Are these sites protecting the privacy of

individuals who choose to purchase their prescription drugs online?

Are there verification systems in place to make sure a prescription

is legitimate and real? Are the prescriptions that are sold valid,

safe, and healthy?

I’m also concerned about these Web sites because I’m concerned

that the proper precautions and safeguards are not in place to protect consumers.

While the growth of the Internet has allowed many Americans

to save money and experience real convenience, we have to question the safety of these Web sites.

Thank you, Mr. Chairman.

[The prepared statement of Hon. C.A. Dutch Ruppersberger follows:]

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Chairman TOM DAVIS. Thank you very much.

Any other opening statements? Mr. Tierney.

Mr. TIERNEY. Thank you, Mr. Chairman.

I’d just ask for unanimous consent to enter my remarks in the

record and essentially adopt much of what Mr. Sanders said. As

much as we need to make sure that we have good regulatory practices in place, we ought to be very careful to make sure that we’re

not at the same time taking away from consumers and people that

need affordable prescription drugs and alternatives. I would rather

see us use this hearing as an effort to make the system work so

that they can, in fact, get affordable prescription drugs, as opposed

to one that’s shutting the door on them in that regard.

[The prepared statement of Hon. John F. Tierney follows:]

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Chairman TOM DAVIS. Thank you.

Any other comments?

[No response.]

Chairman TOM DAVIS. If not, we’re going to move to our first

panel of witnesses. We have Mr. William Hubbard here from the

FDA. Mr. Howard Beales will be testifying on behalf of the Federal

Trade Commission.

Mr. Taylor, you are accompanying him; is that correct?

Mr. TAYLOR. Yes.

Chairman TOM DAVIS. So you may be testifying. Why don’t we

all rise? It is the policy of the committee to swear in witnesses.

[Witnesses sworn.]

Chairman TOM DAVIS. Thank you very much.

We have a timer in front of you. When it is green, you keep

going. When it is orange, you have a minute to sum up. When it

turns red, we would appreciate your summing up, because your

total statements will be in the record.

Let’s start, Mr. Beales, with you, and then Mr. Hubbard. We

thank you very much for being with us. As you can see, there’s a

lot of interest among Members on this subject.

STATEMENTS OF J. HOWARD BEALES, DIRECTOR OF THE BUREAU OF CONSUMER PROTECTION, FEDERAL TRADE COMMISSION; AND WILLIAM HUBBARD, SENIOR ASSOCIATE COMMISSIONER FOR POLICY PLANNING AND LEGISLATION,

FOOD AND DRUG ADMINISTRATION

Mr. BEALES. Thank you, Mr. Chairman and members of the committee. I am Howard Beales, the Director of the Federal Trade

Commission’s Bureau of Consumer Protection. I’m pleased to be

here today to present the FTC’s testimony and to work with the

committee on these important issues.

For many years the Commission has actively attacked false and

misleading health care advertising, no matter the medium. In the

last 5 years, alone, the Commission has brought 105 health and

safety cases. In most of those cases, some part of the marketing occurred online.

We have been particularly concerned about fraudulent claims on

the Internet. The Commission’s ‘‘Operation Cure All’’ targets Web

sites that deceptively promote products or services that purportedly

treat or cure serious and life-threatening diseases. Since June

1999, the FTC has filed 18 ‘‘Operation Cure All’’ cases and sent

warning letters to hundreds of Web sites.

Of course, success would not be possible without the efforts of

our many law enforcement partners, including the FDA and several

State attorneys general.

The sale of prescription drugs on the Internet raises special law

enforcement challenges. Prescription drugs available online offer

consumers convenience and value. Many online pharmacies appear

to operate the same way traditional pharmacies do; however, as

this committee well knows, the practices of some online pharmacies

that file prescriptions without adequately reviewing a consumer’s

medical history or dispense unapproved drugs from overseas have

significant potential to injure consumers.

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Historically, the States have regulated the practice of medicine

and pharmacy. In the last few years, a number of States have

brought actions against online companies that dispense prescription drugs without a valid prescription or have initiated professional disciplinary actions.

On the Federal level, the FDA is the principal agency with both

scientific expertise and statutory authority to oversee online prescription sales, including the authority to take action against the

dispensing of a prescription drug without a valid prescription.

The Commission can assist these agencies by bringing cases

against Web sites that engage in false and deceptive practices. For

example, in one case the Commission charged an online pharmacy

with falsely representing that consumers received care by a clinic

with physicians and an onsite pharmacy. There were no physicians,

no onsite pharmacy.

Following the anthrax outbreak in 2001, the Commission investigated the possible sale of counterfeit Cipro on the Web. Working

with FDA, our staff ordered product samples from both foreign and

domestic Web sites and had them tested. No counterfeit Cipro was

discovered and no actions were filed. We provided information

about the foreign Web sites to the FDA.

Prescribing and dispensing drugs online may be illegal, but unless it is deceptive or unfair it falls outside of the FTC’s authority

and expertise.

We will continue to work closely with the FDA and other Federal

and State agencies and assist them when we can. We will also continue to monitor the Internet for deceptive and misleading product

claims and to bring cases when appropriate under our jurisdiction.

Thank you for this opportunity to present the Commission’s

views. I look forward to responding to your questions.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Mr. Beales follows:]

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Chairman TOM DAVIS. Mr. Hubbard, thank you for being with

us.

Mr. HUBBARD. Thank you, Mr. Chairman.

As you said earlier, I am accompanied by John Taylor, our Chief

Enforcement Official at FDA. We have a written testimony. I’ll

make just a few remarks, if I may.

One of the best things Congress ever did for consumers in our

view, Mr. Chairman, is to create a modern drug approval system.

Drugs are tested for safety and efficacy and manufactured to exacting specifications overseen by the FDA. American patients can be

almost totally certain when they go to a licensed pharmacy that

they are getting a safe and effective drug.

The emergence of these illegal Internet sites poses a fundamental

threat to that safety/assurance system. We note, of course, that

there are legitimate Internet sites that are licensed by the States

and can properly dispense drugs and, in fact, provide a public service, but let me show you a site. I believe the committee may have

a printout of a site that we are looking at. I’ve taken off the name

of this site to perhaps protect the guilty. But this site, as you can

see from the information—it’s also on the poster over here—a consumer can go on and fairly easily buy some relatively serious

drugs. Some of these drugs have serious side effects and need to

be taken under the guidance of a physician, and some are, in fact,

controlled substances. We believe this is a very fundamental

threat.

Now, the patient that buys these drugs on the Internet site has

no way of knowing what they are getting. This offers particular

drugs. If I order any of these drugs, I have no idea that I’m going

to get that drug or it is going to be the real drug or it is going to

be a safe and effective drug. In fact, there are cases in which people have ordered drug A and gotten drug B.

I’ll last say that this site that I have given you we have begun

to look at. This site looks like an American doctor and nurse or doctors or whatever. It looks very normal. When we checked, this site

is actually in Thailand, and the drugs that are coming from this

site are from some place we don’t know, but I doubt they are from

the United States. These sites have sprung up continuously in recent years and they challenge the ability of State and Federal authorities to combat them.

Now, FDA and other agencies in the States have taken a number

of steps to fight these rogue sites. We have been educating consumers. We have many brochures and information on our Web site and

other things to warn people about these. We have partnership

agreements with the State medical and pharmacy regulators to

jointly attack these sites in many cases. We and the FTC, as Mr.

Beales has said, have been working on a number of cases. FDA has

enforced dramatically in this area. We’ve had over 300 cases of

Internet sites since 2000, 150 arrests. We have 100 current investigations. And just today, this morning the State of Oklahoma is

going to court to seek an injunction against an Internet site with

the support of the FDA. That action is one that we are trying to

do in concert with the States, and we believe that together the

Feds and the State can have an impact here.

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So with those brief remarks, Mr. Chairman, I will say thank you

and take questions.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Mr. Hubbard follows:]

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Chairman TOM DAVIS. I’m going to start the questioning with

Mrs. Miller. The gentlelady from Michigan is recognized.

Mrs. MILLER. Thank you, Mr. Chairman.

I’m particularly interested in this issue, as we are talking about

these various Internet sites and the kinds of problems that we are

having. I live in Michigan, obviously a border State to Canada, and

our seniors—I’m not sure if they are on the Internet. They just get

on the bus and go across the Bluewater Bridge or the Ambassador

Bridge and they’re purchasing their drugs in Canada. You can’t

hardly blame them, certainly.

It has been interesting for me to listen to your testimony here

today. I notice that you said that you send out initial warning letters to some of the sites that are illegitimate or what have you. It

is my understanding that what is happening with many of the seniors, whether they are purchasing these drugs over the Internet or

whether or not they’re just traveling there personally, they do have

to have a script from a Canadian doctor. My understanding is that

they’ll go there with a script from an American doctor and then

have to have it re-scripted by Canadian doctors.

How are you interacting not only with the States but with the

Canadian Government? Are you having any success in writing

these letters? You just mentioned that you only had one lawsuit

and you had another this morning with Oklahoma. Are you having

good cooperation with the local law enforcement from the States,

as well as the Canadian Government, on weeding out some of these

illegalities that are happening?

Mr. HUBBARD. I will take that as my question. I certainly think

we are having good success. As I said, we have agreements with

the States in which we are attempting to coordinate our actions.

In terms of Canada, we have been in regular contact with Canadian regulatory officials and they recognize that these sites are illegal and are working at their end of the border on them.

As far as patients coming across from Canada, the American citizens, we try to warn them and tell them that they’re taking risks

in buying these drugs.

We do not, of course, prosecute or otherwise take action against

individual consumers who go to Canada to purchase drugs.

Mrs. MILLER. I mean, it is a huge cottage industry immediately

across the various bridges that I have talked about in our State,

and I’m not sure if these Canadian doctors are licensed or what is

happening, but that’s what my seniors are telling me—that they

just take these scripts and they are re-scripted over by the Canadian doctors and they come back with their drugs.

Mr. HUBBARD. Well, the Canadian officials tell us that the Canadian regulatory officials who oversee the practice of medicine in

Canada are very concerned about Canadian physicians co-signing

these prescriptions, and they are trying to make that point to their

physicians that they should not be doing that. They do not consider

it a good practice of medicine.

Mrs. MILLER. Thank you.

Chairman TOM DAVIS. Thank you very much.

The gentleman from Texas.

Mr. BELL. Thank you, Mr. Chairman.

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Mr. Hubbard, I want to talk to you for a moment about the definition of a valid prescription. The FDA allows States to determine

the definition for valid prescription, correct?

Mr. HUBBARD. That’s correct. The Federal law says that a prescription drug must be dispensed pursuant to a valid prescription,

but it does not define that, so FDA relies on the State definition

of valid prescription.

Mr. BELL. Is that part of the problem?

Mr. HUBBARD. It certainly has been said by many that is a problem; that if the individual State does not have a definition of valid

prescription that covers these Internet sites, then that is viewed as

a weakness.

Let me ask Mr. Taylor to say more about that.

Mr. TAYLOR. Sure. I can expand upon that.

It poses two challenges, one in the context of our own statute,

which basically says that if a product is dispensed and there isn’t

a valid prescription, the drug product is misbranded. So if there

isn’t a clear definition on the State level as to what constitutes a

valid prescription in the context of the Internet, it is difficult for

us to make a misbranding charge.

In the criminal context, the challenge comes because in order to

show intent to establish a criminal violation, it is difficult to establish intent if, again, the standard as to what constitutes a valid

prescription is not clear.

So, to the extent we have had success in building criminal cases,

it is often in those States where there, indeed, is a clear definition

as to what constitutes a valid prescription in the context of the

Internet.

Mr. BELL. From a regulatory standpoint, isn’t it somewhat of a

nightmare, because you could be looking at 50 different definitions

for valid prescription, couldn’t you?

Mr. TAYLOR. Indeed. And when we started working on the Internet in 1999, both on the State level and the Federal level, our statutes really never contemplated the use of the Internet, quite frankly, as a means of conveying drug products, and so I think both on

the State level and the Federal level we have tried to apply our

laws in a way that allows us to address this problem.

But you are right: in the context of the States, you have 50 different definitions, and therefore when we are putting together

cases or when we are investigating sites we have to factor that in

as a part of our strategy, and so that does pose a great challenge

to us.

Mr. BELL. Would it be your recommendation to try to come up

with one definition?

Mr. TAYLOR. Well, I don’t think the administration has a position

on that; however, as I said, it has been a longstanding concern to

us because our inability to build the cases we would like in certain

circumstances.

Mr. BELL. And, just so we’ll have a better understanding of what

is going on out there, I assume there are some folks that are operating in a legitimate fashion?

Mr. TAYLOR. Absolutely. Absolutely. And I think one of the programs that we think is very positive is NABP’s Verified Internet

Practice Pharmacy Site program [VIPPS]. We also think that is an

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excellent program because it allows consumers to look at the seal

and realize that they are getting a drug that is pursuant to a valid

prescription under State law, and also that they are getting a drug

that is FDA approved. So yes, there are definitely legitimate sites.

The Internet definitely provides great benefits, including anonymity, convenience to those who are homebound, as well as cheaper

prices in some cases, but that’s not the case across the board.

Mr. BELL. Thank you, Mr. Chairman.

Chairman TOM DAVIS. Thank you very much.

Mr. Duncan.

Mr. DUNCAN. Thank you, Mr. Chairman, and thank you for calling a hearing on this very important topic.

Mr. Hubbard, as Congresswoman Miller said, you can’t blame

these people for trying to get lower prescription drug costs almost

any way that they can—going to other countries or over the Internet or something. But I’ve read several times in the Wall Street

Journal over the last few years that it costs they estimate an average of $650 million to $800 million and 10 to 12 years to get a drug

approved by the FDA. And then I remember reading also in the

Wall Street Journal a few years ago about a small company in Illinois that had a breast cancer detection pad that they had sold

many, many thousands in other countries and they had gotten approved in every industrialized nation within weeks or months, but

they had been, I think, at that point 9 years dealing with the FDA.

They had several doctors quoted in that article saying thousands

of women have died because the FDA had been so slow and bureaucratic.

What I’m wondering about is why does it take so much longer

to get drugs approved here than in any other industrialized nation

in the world, and what are you doing now or have you done some

things to try to bring down those costs and those time constraints

to help, because that would do more than anything to bring down

the prices of prescription drugs in this country.

Mr. HUBBARD. Mr. Duncan, in fact, in the 1970’s and 1980’s

drugs did occasionally reach the U.S. patients last in some cases

because of—allegedly because of FDA requirements. However, I

would say that Congress stepped in on this issue about a decade

ago——

Mr. DUNCAN. Right.

Mr. HUBBARD [continuing]. And created new legislation that has

resulted in drugs now being approved as fast or faster in the

United States than anywhere in the world, so our patients do get

the drugs faster than anywhere else.

It’s very expensive to——

Mr. DUNCAN. I was here when we passed that legislation and I

remember that, and we did try to step in. But I still read these articles in the Wall Street Journal and other places that says FDA

still—that the big drug giants can get things approved real quickly,

but some of these small companies don’t have a chance.

Mr. HUBBARD. Well, when Congress passed that legislation it

gave us very strict review times, and we’d be glad to share the data

with you. We, in fact, meet those review times as directed by Congress.

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Mr. DUNCAN. So you are saying that we are now faster than most

other industrialized nations?

Mr. HUBBARD. Than all other industrialized nations.

Mr. DUNCAN. All right.

Mr. Beales, how many people are buying drugs over the Internet,

as best as you can tell? And has the FTC—have you received complaints about these drugs being fake in some way, or can you tell

us, do you know of anybody that has been hurt by any of these

drugs? I’m wondering about the scope of the problem here.

Mr. BEALES. We don’t have a specific estimate of how many people purchase drugs over the Internet. I mean, there are an enormous number of people who make various health-related purchases

over the Internet, but I can’t narrow that down to pharmaceutical

products.

We do get complaints about products that are ineffective. They

are—those don’t tend to be complaints about prescription drugs,

but what most of the complaints we get from online pharmacies—

that concern online pharmacies are non-delivery kinds of complaints and those kinds of issues.

We don’t know of particular instances of cases where somebody

has tried to buy a drug that turned out not to work or to be the

wrong thing. That is what we were concerned about in looking at

Cipro, and we have in the past brought cases against home test

kids for AIDS that were sold online and, in fact, did not work. So

we know that problem is out there, but we don’t know of specific

instances in prescription drugs.

Mr. DUNCAN. All right. Thank you very much.

Chairman TOM DAVIS. Thank you very much.

Mr. Waxman.

Mr. WAXMAN. Thank you, Mr. Chairman.

Mr. Beales, one possible model of addressing the Internet pharmacy issue could involve shared response authority, shared authority between FDA and the States. Shared enforcement already exists within FTC law in the Telemarketing Act. Can you explain

how the Federal Government and States share enforcement of the

Telemarketing Act? And does this work in the case of telemarketing?

Mr. BEALES. Certainly. The way the Telemarketing Sales Act is

set up is the FTC writes rules that govern telemarketing to define

deceptive and abusive practices and specify requirements, and then

the FTC can enforce those rules, but States also have the ability

to go into Federal court to enforce the Federal rule. There is a right

of first refusal, if you will. States have to tell us to go to Federal

court, and if we want to take over the case we can.

What that structure does is to preserve a uniform Federal set of

rules and Federal authority over what the rules will be and remain, but it allows for individual States to go into Federal court

to obtain a national injunction to stop a particular practice.

By and large, that scheme has worked well. We find that mostly

States prefer still to go into State court under their own State

laws, but there have been about 50 or so cases where States have

gone to Federal court in order to stop particular telemarketing

practices.

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Mr. WAXMAN. Thank you. You testified that FTC has noticed a

large number of false or misleading claims made about dietary supplements. After the death of Oriole’s pitcher Steve Bechler several

weeks ago, a great deal of attention is focused on ephedra products.

Can you give us examples of statements made by Web sites about

ephedra that FTC considers false or misleading? And let me also

ask: if a company asserts that an ephedra product is safe, is that

considered misleading by the FTC?

Mr. BEALES. We have, in four cases so far, going back to 1997,

challenged claims that ephedra was safe or had no side effects as

unsubstantiated. We don’t think there is sufficient scientific evidence to establish safety or to establish the lack of side effects. And

we have been successful in those four cases that we have brought.

We have other investigations involving ephedra products, and there

will be more cases that are in the pipeline.

Mr. WAXMAN. Well, if a company asserts that an ephedra product

is safe, is that considered misleading by the FTC?

Mr. BEALES. Yes, it is. We think that a claim is misleading if it

is false or it is misleading if there is not sufficient scientific evidence to substantiate the claim, and in either case we can and do

go to Federal court in order to stop it.

Mr. WAXMAN. Mr. Taylor, some have suggested that there should

be a single Federal standard for what is valid prescribing over the

Internet. With a clear Federal standard, would enforcement be

easier?

Mr. TAYLOR. Indeed, it would, simply because, instead of dealing

with the standards of 50 States in terms of looking at whether to

bring a civil or criminal case, we would be dealing with one unified

standard for what constituted a valid prescription.

Mr. WAXMAN. Thank you.

Thank you, Mr. Chairman. I yield back.

Chairman TOM DAVIS. Thank you very much.

Mr. Janklow.

Mr. JANKLOW. Thank you very much, Mr. Chairman.

Mr. Taylor, if I could ask you, give us an example of two States

that have different laws that define a prescription.

Mr. TAYLOR. You mean specific States or specific fact patterns?

Mr. JANKLOW. Either one, because I just need an example of two

States that have a definition of ‘‘prescription’’ that’s different.

Mr. TAYLOR. Sure. There are some States that specifically address, for example—if you notice up on the easel there is essentially what is called an ‘‘online questionnaire.’’ There are some

States that specifically state that an online questionnaire, filling

out that online questionnaire does not fall within the standard for

the practice of medicine and does not fall under the standard of

what constitutes a practice of pharmacy and therefore a valid prescription. There are other States, however, that don’t address the

question of whether or not an online questionnaire falls inside or

outside the proper standard of medical care or inside or outside the

standard for the practice of pharmacy or what constitutes a valid

prescription. That’s two concrete examples of how an online questionnaire is dealt with different in two different States.

Mr. JANKLOW. But, sir, your second example that you gave, you

said they don’t say one way or the other, so I don’t know how that

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is a different example. One State may say that an online fill-out

is not a prescription, the other State is silent. That doesn’t mean

it is.

Mr. TAYLOR. Well, actually, here’s the difference. The difference,

in the context of a criminal case, is that if you are going to bring

a criminal case and you are going to go to a U.S. Attorney’s office,

and as part of a statute in a criminal case you need to establish

intent, you’re able to go to the U.S. Attorney and say definitively

that this type of conduct falls outside what constituted a valid prescription, and by this kind of conduct, the filling out of a questionnaire falls clearly outside of what constituted a valid prescription

within that State, and therefore it is easier to establish that someone has intentionally violated State and thereby Federal law.

In the context of a State where it is unclear whether it does or

does not constitute a valid prescription, it is difficult to show that

someone, you know, willfully intended to violate the law because

they may not know, themselves, that——

Mr. JANKLOW. But, sir, as a practical matter, you can file charges

against somebody that should be determined. I mean, what we’re

doing is making subjective judgments on cases that we don’t file,

as opposed to filing an action where we believe there is a violation

and letting it be determined by judges through the appellate chain.

Mr. TAYLOR. Well, in some cases where there is ambiguity we’ve

gone to the States to get an advisory opinion as to whether or not

the online questionnaire falls under a valid prescription of medicine, but we have not, quite frankly——

Mr. JANKLOW. Let me ask you, if I can, this, sir.

Mr. TAYLOR. OK.

Mr. JANKLOW. Do you know of any State that says an online

questionnaire fulfills a prescription requirement?

Mr. TAYLOR. Not off the top of my head, but that doesn’t

mean——

Mr. JANKLOW. OK. Mr. Hubbard, if I can ask you, you talked

about this case in Arizona [sic] that is being filed today. How long

has that case been being worked?

Mr. HUBBARD. I don’t know how long Oklahoma—it’s Oklahoma.

I don’t know how long Oklahoma has been working it, but we spent

a few, the last few weeks on it.

Mr. JANKLOW. Pardon?

Mr. HUBBARD. We’ve spent the last few weeks on it. We are reacting to the claims they are making to their Web site and to the

actual sales that they are making.

Mr. JANKLOW. And are there thousands of these sites out there?

Mr. HUBBARD. There are certainly hundreds. We have learned

that in many cases a given Web site is part of a larger business

that runs several Web sites, so it could be if you see Web site A,

there is also B, C, D, E all run by the same company with different

looks on the Internet.

Mr. JANKLOW. Do you have any estimate as to the number of

cases globally that have been filed in America, what percent are

civil, what percent are criminal?

Mr. HUBBARD. As I said in my testimony, we have done over 300

at FDA. The States have done some number more, but I do not

have that number. Perhaps the next panel will know more.

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Mr. JANKLOW. Are you aware of many instances where someone

has been shut down civilly where they have reopened under another name or another operation?

Mr. HUBBARD. Absolutely.

Mr. JANKLOW. So the civil law really doesn’t work very well, does

it?

Mr. HUBBARD. Well, I think that could also be true of the criminal. If you don’t catch the criminal and he has moved on to another

State or another country, just because you have targeted them

doesn’t mean you have successfully put them out——

Mr. JANKLOW. I understand that, but, I mean, as a practical matter there is less likelihood someone will be dealing with the criminal law violations as a matter of choice than civil law violations.

Mr. HUBBARD. Let me ask John to answer that.

Mr. TAYLOR. Not in all cases.

Mr. JANKLOW. I said as a practical matter. I didn’t say in all

cases.

Mr. TAYLOR. Not even in—I can’t even say it is a practical matter, because there might be some instances where a Web site is disseminating a product that is so dangerous that it is, quite frankly,

more advantageous to try and move with the civil case—for example, an injunction or seizure—that removes the product from the

marketplace quickly. Some of our criminal cases are so complex

that, quite frankly, it takes a certain amount of time to put them

together, and during that time in some cases products could still

be—the pharmacy could still be dispensing products to consumers.

So it really is a fact-based analysis.

If you may, I just want to expound upon what Oklahoma is doing

today. One of the unique facets of the Oklahoma action is this involves a storefront pharmacy which is accepting prescriptions,

sending the prescriptions to Canada, and then obviously products

are then distributed to consumers.

The reason why this particular storefront was of interest both to

the State of Arkansas and the State of Oklahoma is because, as

Mr. Hubbard said, the company was making misleading claims

about the FDA-approved status of their products, which raises safety concerns that are troubling to us.

Part of, I think, the driving force for trying to address this problem is to ensure that the American public has products that, indeed, are FDA approved and that, indeed, are safe and effective,

and that’s one of the reasons why the State of Oklahoma moved

the case.

Mr. JANKLOW. My time is expired. Thank you.

Chairman TOM DAVIS. Thank you very much.

Mr. Ruppersberger, and then Ms. Watson.

Mr. RUPPERSBERGER. First, after listening to a lot of the testimony and questions, it seems to me that clearly the problem isn’t

getting any better and there’s a lot of ambiguity within different

States and that we really do need to establish some Federal standard. Would you agree with that premise?

Mr. HUBBARD. Well, certainly we’re getting that advice from several points. Understand that there are significant policy decisions

around doing that because FDA does not regulate the practice of

pharmacy or the practice of medicine.

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Mr. RUPPERSBERGER. What policy decisions? If you were sitting

here, what would you suggest that we do to resolve and try to help

this situation?

Mr. HUBBARD. Obviously, the advice you will get is that there be

a national Federal standard for a valid prescription, but, as I was

saying, there is a certain States rights issue and federalism issue

around whether you want to empower the Federal Government to

define what States traditionally have done. Obviously, that’s Congress’ choice to make, not FDA’s.

Mr. RUPPERSBERGER. But isn’t it true that State boards of medicine, State boards of pharmacy, States Attorneys General are all

asking for this type of legislation?

Mr. HUBBARD. And from their points of view it is a very legitimate request.

Mr. RUPPERSBERGER. And, you know, the issue is a Federal

issue. I mean, it’s Internet, it’s not within State.

Let me ask you this. I think, Mr. Taylor, you referred to VIPPS.

It is my understanding that VIPPS is a voluntary program that

certifies Web sites; is that correct?

Mr. TAYLOR. That’s correct.

Mr. RUPPERSBERGER. Well, it seems to me that’s a very simple

issue, a very simple program. What would you think of making

VIPPS mandatory? What would be the down side of making VIPPS

mandatory?

Mr. TAYLOR. The administration does not have a position;

however——

Mr. RUPPERSBERGER. Do you have a position?

Mr. TAYLOR. I don’t have a position, either.

Mr. RUPPERSBERGER. As an enforcer.

Mr. TAYLOR. However, obviously I think one of the reasons why

VIPPS is so good and one of the reasons why the agency embraces

it and tries to spread the word is because it does provide consumers with good advice about the products that they are seeking and

it allows consumers to discern whether or not they should be choosing from a site with the VIPPS seal versus all the other sites that

are proliferating out there on the Internet.

Mr. RUPPERSBERGER. Do we really think that by answering a few

questions a physician is in a position to prescribe medicine?

Mr. TAYLOR. Well, I think the American Medical Association has

said that it is important to have a real doctor/patient interaction,

and that merely asking and having a few questions answered does

not fall within what they believe to be the proper standard.

Mr. RUPPERSBERGER. And what kind of actions do we have that

we can take against medical professionals that blindly prescribe

drugs?

Mr. TAYLOR. Well, on the State level there have been instances

where we have worked with medical boards who have taken actions

to disqualify a doctor based on their interactions with a patient. We

have, quite frankly—we had one criminal case that we brought

against a doctor who was not only prescribing but also owned an

Internet site and was disseminating prescription—excuse me, disseminating drugs without a valid prescription. So there are some

actions that can be taken on both the State and Federal level. But

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the practice of medicine, as Mr. Hubbard said, does rest primarily

with the States.

Mr. RUPPERSBERGER. Well, from sitting here and listening to the

testimony, it seems to me that a very practical solution might be

to encourage that VIPPs be changed to some type of mandatory

certification. That might be the first step for getting the camel’s

nose under the tent. So I would hope that you would take that back

to your policymakers in the administration.

Mr. TAYLOR. Fair enough.

Chairman TOM DAVIS. Thank you very much.

Mr. Turner, any questions?

Mr. TURNER. Thank you, Mr. Chairman.

Mr. Taylor, I was fascinated by one comment you made. You said

that if they violated State law they thereby violated Federal law

with respect to the issuance of a prescription. In your discussions

from the whole panel on the issues of foreign Web sites where people are logging on and buying prescriptions and may not even know

where they are buying them from, is there any State that doesn’t

require that a valid prescription be issued by a U.S.A. or State-licensed doctor?

Mr. TAYLOR. Yes. All the States require a valid prescription. The

key is—well, there are two keys. One is that what constituted a

valid prescription is not necessarily consistent from State to State.

Mr. TURNER. That’s why I ask you is there a State that doesn’t

require that a prescription be written by a licensed doctor?

Mr. TAYLOR. Not that I know of. No, sir.

Mr. TURNER. So these sites that are foreign or where there

doesn’t appear to be any regulation that’s going on, it would seem

that you would not have to wonder whether or not Federal law is

being violated and whether or not it satisfies all 50 States’ regulations if you can determine or ascertain that a U.S.A.-licensed medical doctor is not participating in the transaction.

Mr. TAYLOR. That’s correct.

Mr. HUBBARD. And can I say, Mr. Turner, that for the foreign

sites it is almost irrelevant whether it’s a valid prescription because the drugs, themselves, are unapproved and shouldn’t be imported into this country.

Mr. TURNER. And to what extent, then are you taking action on

those that are just foreign?

Mr. TAYLOR. Well, in the context, just using Canada as an example, we have shared with the Canadian Government recently 45

Web sites that came to our attention, based on our own domestic

work, and we have asked for them to evaluate those Web sites and

to let us know whether or not they can take action on their side

of the border.

In the context of the action that Mr. Hubbard just talked about,

which involves Rx Depot, which is an action that was brought not

only by the State of Arkansas but also by the State of Oklahoma,

the Canadian—the province Manitoba has issued a statement saying that they were going to take steps to notify Rx Depot that the

importation of products from Canada were not only not in compliance with U.S. law, but was not in compliance with the law in the

province of Manitoba.

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So, to make a long story short, what we try to do is increase our

contact with foreign governments and working closely with them.

Obviously, it poses a number of challenges, one being products can

appear to come from Canada but in some cases they do not. And

so one challenge is trying to figure out exactly where the products

come from.

The other challenge is, quite frankly, the fact that different foreign governments, as well as the United States, are becoming acquainted with this problem and we’re all at different places in

terms of coming up with tools that can best address what is now

a global issue, as opposed to an issue that is impacting specific

countries.

Mr. TURNER. Turning to domestic sites, then, to what extent do

you work to verify that a licensed doctor is participating? You have

the issue in all 50 States to what extent the questionnaire is

enough or not enough, but are you verifying whether or not, as

they state, that there is a doctor at all involved in the transaction?

Mr. TAYLOR. Yes, we do. As a matter of fact, when the Internet

first—in 1999 and 2000 when the Internet first became a very popular medium for the dissemination of these products, there was a

perception that most of these sites did not have any doctor involvement.

What we found subsequent to that was that there are some

where there indeed is no physician involved; however, there are

others that do have physicians involved. And then the question becomes whether or not the physicians, based on online questionnaire

or based on the interaction, are really interacting with the patient

in a way that again is consistent with the standard for medical

care and is consistent with what, indeed, is a standard for a valid

prescription. So yes, we do try and determine that as a part of our

investigations, because that is going to be an important fact in determining not only what charges apply but what remedies we want

to use in order to deal with the conduct if it is violative.

Mr. TURNER. Thank you.

Chairman TOM DAVIS. Thank you very much.

Ms. Watson.

Ms. WATSON. Thank you so very much, Mr. Chairman, for holding this hearing.

I have been following this issue for many, many years. I was

chair of the California Senate’s Health and Human Services Committee. There are a couple of things that I want to address, I guess

to Mr. Hubbard and then to you, Mr. Taylor.

First, dealing with the foreign Web sites and the prescriptive

drugs that can be available, I have tremendous concerns because

the ingredients in a particular product vary from country to country, No. 1. So many of these prescriptions might be counter-indicative, depending on the ethnic group that is using them, and so

there is a tremendous danger.

I’d like you to comment first, Mr. Hubbard, on what you are

doing to look at the prescriptive drugs that can be ordered without

a doctor’s assistance or without a doctor being in relationship with

the patient.

Mr. Taylor, could we have a national standard that says any

kind of prescriptive drugs that are ordered off the Internet dealing

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with foreign pharmaceutical groups will be prohibited if there is

not a doctor related? Can we do that as a national standard?

Mr. Hubbard, and then you think about your response.

Mr. HUBBARD. To answer the question to me, you are absolutely

right that there is a great risk that drugs purchased over the Internet from foreign countries could have variability in ingredients and

content, they can be contaminated, they might not even be the

drug you think you’re getting, so that is a very serious issue and

we have been trying to essentially stop those drugs from coming in

by taking some enforcement action, by asking foreign governments

from where those drugs are coming to step in, and by warning our

consumers who buy those drugs that they are taking great risk.

I’ll let Mr. Taylor answer the other question.

Ms. WATSON. Could we have a Federal standard as it addresses

the foreign pharmaceuticals?

Mr. TAYLOR. Again, the administration doesn’t have a position on

a Federal standard; however, to the extent that there were going

to be policy discussions on the issue, I think it would certainly be

wise to try and, with whatever standard, whether it be a Federal

or State standard, try to come up with a standard that addresses

the myriad of fact patterns that we’re seeing in relation to these

Internet sites, including the one maybe that you just posed as part

of your hypothetical.

Ms. WATSON. Well, I understand that FDA has intervened when

there is no doctor or prescription involved at all, and in terms of

trying to set a national standard, as has been mentioned here before, could we not start there with the foreign pharmaceuticals?

Would that not make sense?

I know each State has a board and they set their own standards

for practice, but this seems to be—since we are dealing with the

Internet, international, wouldn’t it be in the best interest of our

Federal authority to prohibit the ordering of a prescriptive drug if

there has been no patient/doctor contact?

Mr. TAYLOR. In the context of the foreign sites, quite frankly, as

Mr. Hubbard alluded to earlier, the issue of valid prescriptions is

just really one piece of the puzzle. I mean, in regards to the foreign

sites, there certainly are steps that the agency could take to not

only address the patient/physician interaction, but, quite frankly,

could take to address the actual products, themselves, that are

being sold on these sites.

I mean, one of the over-arching concerns that the agency has

once again is that, you know, we certainly are cognizant and sensitive to the fact that people are purchasing products from these

sites because of their cost, but the over-arching concern that we

have is that we, quite frankly, don’t know a lot about the manufacturer of these drugs, we don’t know a lot about the storage condition of these drugs, we don’t know whether these drugs are counterfeit. We don’t know, quite frankly, as to whether or not these

drugs are originating in Canada or have been trans-shipped from

other countries. We have had recent evidence that there are Web

sites where the product reports it came from Canada but, indeed,

comes from——

Ms. WATSON. Would you yield, Mr. Taylor?

Mr. TAYLOR. Yes. Sure.

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Ms. WATSON. To cut to the chase, couldn’t we start there? Since

you have all these questions——

Mr. TAYLOR. Sure.

Ms. WATSON [continuing]. And we are looking for a national

standard, would that not be the place to begin in terms of a national, all 50 States?

Mr. TAYLOR. It is certainly——

Ms. WATSON. Since we have all these questions.

Mr. TAYLOR. It is certainly something I am willing to take back.

Ms. WATSON. OK. Thank you.

Mr. BURTON [assuming Chair]. The gentlelady’s time has expired.

Mr. Janklow.

Mr. JANKLOW. Thank you very much, Mr. Chairman.

Mr. Taylor, when the gentleman from Maryland asked you the

question ‘‘what’s the down side if we had a, so to speak, national

registry, if we required them to be registered,’’ you said the administration didn’t have a position and you didn’t have a position. Do

you know of a down side if we had a—I don’t care about a position.

Do you know of a down side if there were a national registration

requirement?

Mr. TAYLOR. Well, I mean, I guess one down side would be that

on some level it takes away from the States the discretion to pick

the standard that they feel is best within their State.

Mr. JANKLOW. OK. Anything else that you know of for a down

side?

Mr. TAYLOR. Not off the top of my head. I don’t know if Mr. Hubbard has any——

Mr. JANKLOW. Mr. Hubbard, do you know of a down side, sir?

Mr. HUBBARD. I will simply say that the way the Federal/State

relationships have evolved for 200 years in this country is that the

practice of medicine and practice of pharmacy are inherently State

responsibilities, and FDA is not being granted the authority to regulate the practice of medicine except in one limited area called a

mammography program, so it would be, to some extent, saying to

FDA, ‘‘You now have a more substantial role in regulating the

practice of medicine.’’

Mr. JANKLOW. Sir, let’s pursue that if we can for a second. We

have an FDA, don’t we, and it is national?

Mr. HUBBARD. Right.

Mr. JANKLOW. And the FDA, part of its national responsibility is

to be concerned about the quality of the drug, of prescription

drugs?

Mr. HUBBARD. Right.

Mr. JANKLOW. And part of it has to be concerned with the efficacy of what people may take those drugs for. That’s also a concern, isn’t it?

Mr. HUBBARD. Right, but the decision to give the drug to the patient is a physician’s decision, so he is really the one deciding that

this drug will work in this patient.

Mr. JANKLOW. But the FDA has a legitimate concern. I assume

you have a concern and you have exercised it with respect to the

fact that where a physician isn’t in the loop, people having access

to drugs which you approve?

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Mr. HUBBARD. Well, if there is no physician at all, that is clearly

a violation of our act.

Mr. JANKLOW. OK. Well, it appears we have several kinds of

problems with the Internet, and I think—at least myself, I have

been mixing them. One, we have a foreign problem with importation into this country. Two, we have a problem with respect to the

ability for myself to order drugs over the Internet without going

through a physician. And, three, we have a problem of me being

able to order over the Internet where I have—where there is some

physician in some other State that is approving it. At least the

fourth one is I have a valid prescription, I feel I can get it cheaper

some place other than locally, and so I am ordering it over the

Internet with a valid prescription.

Can we agree we’ve got four different scenarios? Do you know of

any others that we’re concerned with?

Mr. HUBBARD. I think those are reasonable, although, as I said,

if there is no physician at all both the States and the FDA can very

clearly act in that circumstance.

Mr. JANKLOW. No, no. My question is: do you know of any other

scenarios other than the ones I’ve put forth? In my questions, I’d

like to deal with scenarios separately because we intermingle them.

Mr. HUBBARD. Sure.

Mr. JANKLOW. Do you know of any others?

Mr. HUBBARD. None come to mind, but there may be some more.

But I think you have summarized well some of the dilemmas.

Mr. JANKLOW. OK. Sir, now eliminating the foreign issue and

eliminating the one where I’ve got a valid prescription from a doctor in my State and I’m shopping for the best price, be it in Canada

or some other State, and I’m filling out a questionnaire that is read

by a doctor—that I send it from here, this community, and it is

read, it is seen by a doctor in some other State, and on the basis

of that I am sent a prescriptive drug, do you know of any place in

America where that is the legitimate practice of medicine?

Mr. HUBBARD. Certainly the medical practitioners have advised

us that they believe that is not legitimate practice of medicine.

Mr. JANKLOW. OK. So you don’t know of any place where it is.

Do you, Mr. Taylor, know of any place where that is called the

legal practice of medicine?

Mr. TAYLOR. Sir, I can’t think of a place off of the top of my head.

That doesn’t mean that it doesn’t—I just can’t think of a place.

Mr. JANKLOW. OK. So, with respect to that issue, that ought to

be something that the FDA could move forward on now, isn’t it?

Mr. HUBBARD. Well, again, let’s say you’ve got a patient in North

Dakota——

Mr. JANKLOW. A what, sir?

Mr. HUBBARD. A patient.

Mr. JANKLOW. Sir, I’m hard of hearing. I wear a hearing aid.

Mr. HUBBARD. Let’s say you have a patient in North Dakota who

goes on a Web site that is located in South Dakota.

Mr. JANKLOW. OK.

Mr. HUBBARD. And the physician who writes that prescription

based on this sort of questionnaire is in South Dakota.

Mr. JANKLOW. Yes.

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Mr. HUBBARD. And North Dakota comes to FDA and says, ‘‘Will

you go after this site?’’ And we would ask the question of North Dakota, ‘‘Is that prescription that physician in South Dakota is writing a valid prescription under your law?’’ And if they say, ‘‘Well,

our law doesn’t deal with that. We don’t have an answer for you,’’

then FDA is pretty much out of the game.

Mr. JANKLOW. Correct. Sir, do you know of any instance where

a State has ever done that, where they’ve said that a—let’s take

your example—where a North Dakota, for example, has said that

a physician who is not licensed in the State of North Dakota, has

no nexus with the State of North Dakota, who fills prescriptions for

residents who are ordering them from North Dakota based on some

Internet document that’s filled out, do you know of any scenario

where a State has ever said that’s not the practice—that’s something that we don’t have laws that cover, or that it’s not the practice—it is the practice of law in our State?

[No response.]

Mr. JANKLOW. They don’t.

Chairman TOM DAVIS [resuming Chair]. The gentleman’s time is

expired, but we’ll give him a chance to answer. Any response?

Mr. TAYLOR. I believe initially in the State of Florida there was,

quite frankly, a situation similar to that. What the State of Florida

has done since then is it has actually tried to come up with a

stronger definition as to what constitutes a valid prescription, but

we did have some situations with the State of Florida where there

was some ambiguity as to whether or not——

Mr. HUBBARD. I believe the next panel will have more information because they are the folks that are much more in touch with

that particular State issue.

Chairman TOM DAVIS. OK. Thank you. Thank you very much.

Mr. Lynch.

Mr. LYNCH. Thank you, Mr. Chairman. I just want to thank the

witnesses for appearing here and helping the committee with its

work. I have a general question, and that is I know from past experience in dealing with e-commerce, if you will, with the European

Union, that they had stricter guidelines with e-commerce in Europe, not necessarily dealing with the United States but internally.

Are there any models out there to deal with this problem from the

European Community?

Mr. TAYLOR. Well, actually, I went to Geneva a couple of years

ago to meet with many of the European regulators. Interestingly

enough, there really isn’t a good model because in some respects

the practice of Internet pharmacies is—their practice is lagging behind ours, and so they are wrestling with some of the same issues

that we are wrestling with. I know that there are some countries,

particularly Germany, that are taking a very aggressive stance,

but, like the United States, there is sort of a patchwork of approaches based on the fact that this, too, is a new arena for them.

Mr. LYNCH. OK. Thank you, Mr. Taylor. Thank you, Mr. Chairman. Nothing further.

Chairman TOM DAVIS. I thank the gentleman.

Mr. Burton.

Mr. BURTON. Mr. Hubbard, can a prescription written by a U.S.

physician be lawfully filled by a Canadian pharmacy?

95

Mr. HUBBARD. As I understand it, the way Canadian law

works—and I am not an expert in that—is that there needs to be

a Canadian physician’s signature on that prescription before it is

filled by a Canadian pharmacy, although I do understand that

sometimes they are co-signed. It will actually be the same piece of

paper, and then the Canadian physician will sign his name to it,

as well.

Mr. BURTON. I think that is the practice. I think that when a legitimate prescription from an American doctor goes up there, they

have it reviewed by a Canadian physician, and he either writes a

separate prescription that is identical or he initials that in some

way, so it is double checked.

How many times has there been drugs from Canada that have

come across the border and harmed American citizens, other than

it would harm an American citizen if it was even purchased here

in the States?

Mr. HUBBARD. We have very little information of harm.

Mr. BURTON. But to your knowledge how many times?

Mr. HUBBARD. From Canada, I know of none.

Mr. BURTON. We don’t either, and we have been checking on it.

GlaxoSmithKline has gone to the pharmacists up there who sell

over the Internet and they’ve said that if they continue to sell into

the United States that they’re going to stop giving them drugs from

their company. Many of us believe they are the stalking horse for

a lot of pharmaceutical companies in the United States who charge

double, triple sometimes the amount for drugs in the United States

that they charge in Canada. Now, you just talked about the European Union and England. Isn’t GlaxoSmithKline a European company?

Mr. HUBBARD. Originally the parent company was originally

English, yes. I think their headquarters now for the domestic operation is in North Carolina.

Mr. BURTON. No, but they still are pretty much controlled out of

England, aren’t they?

Mr. HUBBARD. I don’t really know their corporate structure that

well.

Mr. BURTON. Well, we’ll check that out when we have our subcommittee hearing. But you don’t know of any cases where the

pharmaceuticals coming from Canada have caused any unusual

problems?

Mr. HUBBARD. Of course, there is no system to recognize that.

Those are not legal drugs, so therefore the medical system doesn’t

track them.

Mr. BURTON. Well, but an American doctor writes a prescription.

It’s got to be double checked by a Canadian doctor. Then they issue

a prescription. It sounds like a pretty good check and balance. The

only difference to me, it sounds like, is the cost is maybe double

or triple down here.

Mr. HUBBARD. Well, you’d certainly have a check in the sense

that it sounds like in that scenario you give the patient has been

adequately diagnosed by a physician and he’s written a prescription he believes to be appropriate.

Mr. BURTON. Let me ask——

96

Mr. HUBBARD. But we don’t know what the actual drug is that

is being ordered.

Mr. BURTON. You are inferring that the Canadians don’t police

that and it might be an adulterated pharmaceutical product?

Mr. HUBBARD. The Canadians tell us that if the drug is intended

for the U.S. market they do not regulate that.

Mr. BURTON. They don’t regulate that, but they have a doctor

that double checks the prescription and has—but you don’t know

of any adverse impact of pharmaceuticals from Canada?

Mr. HUBBARD. The Canadians inform us that a Canadian physician should not be co-signing these prescriptions because that physician has not seen the U.S. patient.

Mr. BURTON. Yes. Let me ask you a question. If you take a product that is sold here in the United States by GlaxoSmithKline or

any other pharmaceutical company and it costs two to three times

what it does in Canada or maybe any other country in the world,

what do you think about that?

Mr. HUBBARD. I think, first of all, it’s not that the drug necessarily is priced higher here; it’s priced lower in countries that

have price controls. That’s the reason for the price difference.

Mr. BURTON. You’re indicating then that they don’t make a profit

on the pharmaceuticals they sell in Canada?

Mr. HUBBARD. They may well, but that’s not really FDA’s purview. Our concern is the safety of the drugs.

Mr. BURTON. I know, but the point is that the pharmaceutical

companies and the FDA seem to be in lock step on trying to control

the flow of drugs out of Canada, and people are saving a ton of

money by buying their pharmaceuticals from Canada. Over a million people do it right now, and there has been no claim that there

has been any problem.

It seems to me unbelievable, especially since we have passed

NAFTA and we are supposed to have free trade, as long as those

prescriptions are double checked the Americans ought to benefit

from the lower cost of those pharmaceuticals just like the Canadians do.

Mr. HUBBARD. Well, your argument is certainly one we hear a

lot, Mr. Burton.

Mr. BURTON. But the pharmaceutical companies, who are making

a very, very large profit worldwide, are making a profit in Canada,

they are making a profit in other countries where they’re selling

them at half the price they are here in the United States, so what

they are doing is they are loading the price of U.S. pharmaceuticals

so they can make a bigger profit. You wouldn’t agree with that

though, would you?

Mr. HUBBARD. Well, I don’t think that’s my job to agree or disagree with that.

Mr. BURTON. Your job is to make sure that they are of the purity

and that they are not going to harm American citizens.

Mr. HUBBARD. That’s correct.

Mr. BURTON. What about a reciprocity agreement with the Canadians? Would you——

Mr. HUBBARD. Well, there are exemptions from the free trade

statutes, I understand, that allow each country to set its own public health standards, and in this case drugs are approved for safety

97

and efficacy in the United States and there has not been a program

in place to approve drugs made in other countries unless they are

formally shipped in and——

Mr. BURTON. Mr. Chairman, let me just make sure he answers

this question. Would it be a problem if there was reciprocity between the United States and Canada?

Mr. HUBBARD. Certainly there is a concept called ‘‘equivalence’’

that has been adopted by some agencies to say that products from

one country can more freely come in. That’s something we are looking at. But there is not currently a reciprocity agreement in place

with Canada on drugs.

Mr. BURTON. Thank you.

Chairman TOM DAVIS. Thank you. I think the reality is in most

cases it doesn’t take that much to make the pill; it is the research

and development that goes into it, and you make a profit whether

you sell it in Mexico, Canada, or the United States. You make

more, you know, greater areas. That’s really not your purview,

though.

Mr. HUBBARD. That’s right.

Chairman TOM DAVIS. You are to make sure they are safe, and

you deal on that basis.

Mr. HUBBARD. That’s right.

Chairman TOM DAVIS. And you can understand the frustration of

a lot of Members when it looks like the United States is paying

more——

Mr. HUBBARD. Yes.

Chairman TOM DAVIS [continuing]. Than consumers in other

places. And so this is all about safety, but I think it shows us, as

some of the opening statements from some of our other Members

indicated, the frustration of Americans who are paying higher

prices and in some cases finding it not affordable.

We appreciate your input in this.

We have another panel to get to. Mr. Sanders, I can recognize

you, but we want to get to the next panel.

Mr. SANDERS. I missed Mr. Burton’s comments, but I understand

that they were similar to some of my original comments and I want

to go on record in supporting him.

Mr. Hubbard, in terms of the regulatory system in Canada, in

your judgment is it inferior in protecting the Canadian people than

the system in the United States?

Mr. HUBBARD. I certainly don’t think that’s my judgment to

make.

Mr. SANDERS. But you told us earlier that you communicate with

Canadian authorities.

Mr. HUBBARD. Right.

Mr. SANDERS. I presume you communicate with your counterparts in Canada.

Mr. HUBBARD. That’s correct.

Mr. SANDERS. They have a system similar to the FDA. My understanding is that it is as strong or stronger. Do you disagree with

that?

Mr. HUBBARD. They tell us that they have a similar system to

ours. In terms of its resources, its people, it is less robust than the

98

FDA’s system. They only have, for instance, 100 inspectors for their

entire country.

Mr. SANDERS. Yes, but their country is a lot smaller than our

country. Have you heard of problems in Canada where people are

becoming ill with adulterated medicine?

Mr. HUBBARD. No. We don’t have the evidence——

Mr. SANDERS. This is something that I mentioned earlier when

I raised some questions, that you warn Americans about the potential dangers of buying medicine in Canada. About a million Americans, to the best of my knowledge, do buy medicine in Canada. You

warn them, but have any of them become sick?

Mr. HUBBARD. No. Again, we don’t have the evidence, but let me

point out that a big part of the concern is that even if the Canadian

drugs today are just fine—and, you know, we don’t know, but if

this practice were legitimized, Canada could become strictly a

trans-shipment point for Third World countries to send drugs to.

Mr. SANDERS. Not if we develop laws, as we did. Mr. Janklow

made the point that there was reimportation legislation passed several years ago in cooperation with the FDA which had very, very

strong safety elements. In fact, we spent too much money, but I

supported that. You’re not suggesting for a moment that, with the

resources of the United States of America, we cannot develop a

safety mechanism with our Customs people, with the FDA, to make

sure that every medicine that came into this country was absolutely safe?

Mr. HUBBARD. Well, you’ll recall that when that statute passed

that there was a provision for the Secretary of Health and Human

Services to certify that it could be safely implemented. Secretary

Donna Shalala refused to do that certification and Secretary

Thompson refused.

Mr. SANDERS. Actually, I do know it because we wrote it. So let’s

be clear about what happened with Secretary Shalala. What happened in the process is at the very end in the Senate there were

loopholes put in. What that provision said is the Secretary has got

to say, as a result of that legislation, that the American people

would be paying lower prices and that the safety element will be

preserved. In fact, because of those loopholes the Secretary could

not appropriately enough say the prices would be lower because

what was in those loopholes is what Glaxo is doing today. But the

bottom line is you’re not going to suggest that, with the resources

of this country, we cannot develop a regulatory system to make

sure that all medicine coming in—we get beef from Canada, we get

vegetables from Mexico. How would we not be able to make sure

that we could protect Americans who buy prescription drugs?

Mr. HUBBARD. We certainly could think of provisions that would

ameliorate the safety risks from foreign imported drugs. We do not

believe such provisions could be crafted in a way that they would

not lower the current safety standard, which is very high in this

country.

Mr. SANDERS. In terms of safety, let me ask you this. You’re very

concerned about safety. How many Americans are dying in this

country today because they can’t afford a medicine?

Mr. HUBBARD. I have no idea.

Mr. SANDERS. Do you think that’s an important issue to pursue?

99

Mr. HUBBARD. Absolutely. My own 90-year-old mother cannot afford her drugs, Mr. Sanders.

Mr. SANDERS. For the record, Mr. Chairman—and I’ll end, and

I thank you for allowing me to ask these questions—they talk

about safety, but he has just told us that not 1 American out of

1 million, we think, has become sick by importing medicine from

Canada. He will not tell us how many thousands may suffer because they cannot afford the medicine that their doctors are prescribing. In my State doctors tell us, ‘‘Why waste our time writing

out a prescription when a person can’t afford to fill it?’’

I would like to see you do a study and tell us how many people

are dying in America because they can’t afford medicine and are

getting sick, and that number will be 1,000 times higher than anybody from Canada who is becoming ill.

Thank you very much, Mr. Chairman.

Chairman TOM DAVIS. Thank you. I don’t think he was prepared

to answer those questions today, but the gentleman wants to initiate a study and try to get that information, I would be happy to—

thank you all for being with us.

I’m going to ask just one question. I had one question I wanted

to ask. Mr. Hubbard, is it true that all enforcement authority here

today can take the same kind of action against these illegal domestic Internet pharmacy sites under existing law?

Mr. HUBBARD. Can you repeat the question, sir, just to make

sure I get it?

Chairman TOM DAVIS. Can you take—the enforcement authority

you have today, can you take action against these illegal domestic

Internet pharmacy sites under existing law?

Mr. TAYLOR. We can take actions under existing law; however,

as I described earlier, there are challenges, and one of the challenges is being able to use our full set of tools in those instances

where it is difficult to discern whether or not—where it is difficult

to discern what, indeed, is the standard for a valid prescription in

each State.

Chairman TOM DAVIS. Right. So additional tools would be very

helpful at this——

Mr. TAYLOR. Well, to the extent that, you know, there are challenges posed by the fact that there, indeed, is a difference in the

standard of what constitutes a valid prescription. I mean, we

have—and let me be clear here. Under the act there is a provision

that allows us to make a misbranding charge if there is—if the

product is dispensed without a valid prescription, so we have the

tool, we have the authority. It’s just that in order to meet that definition under the act we are dealing with standards that vary from

State to State. So, in terms of statutory tools and statutory language, we have the ability to address these situations; however,

from a practical standpoint it is difficult to do so because, indeed,

there is a different definition as to what constitutes the standard

of prescription in each State.

Chairman TOM DAVIS. I’ve got you. All right. Thank you all.

Let me say to all of you thank you very much.

Anything else you wanted to add?

[No response.]

Chairman TOM DAVIS. Thank you very much for being with us.

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We have our second panel today. We have Jim Thompson of the

Federation of State Medical Boards, Carmen Catizone of the National Association of Boards of Pharmacy, and Connecticut Attorney General Mr. Richard Blumenthal. We appreciate all of you

bearing with us through the first panel.

It’s the policy of the committee we swear the witnesses in, so, if

you would, stand up with me and raise your right hand. Do you

solemnly swear that the testimony you are about to give will be the

truth, the whole truth, and nothing but the truth?

Mr. THOMPSON. I do.

Mr. CATIZONE. I do.

Mr. BLUMENTHAL. I do.

Chairman TOM DAVIS. Thank you all very much. You may be

seated.

We’ll have the timers in front of you—green, yellow with a

minute to go, and then red. Your entire statements are in the

record. Your questions will be based on this.

Dr. Thompson, why don’t we start with you and end up with

General Blumenthal.

Thank you all for being with us.

STATEMENTS OF DR. JAMES THOMPSON, M.D., EXECUTIVE

VICE PRESIDENT, CHIEF EXECUTIVE OFFICER, FEDERATION

OF STATE MEDICAL BOARDS; CARMEN CATIZONE, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF BOARDS OF

PHARMACY; AND RICHARD BLUMENTHAL, ATTORNEY GENERAL, STATE OF CONNECTICUT, ON BEHALF OF THE NATIONAL ASSOCIATION OF ATTORNEYS GENERAL

Dr. THOMPSON. Good morning, Mr. Chairman and members of

the committee. I am Dr. Jim Thompson. I am executive vice president and chief executive officer of the Federation of State Medical

Boards of the United States. I will refer to us as the Federation.

The Federation is a national nonprofit association established in

1912 which serves as a collective voice for 70 member State medical licensing and disciplinary boards. The Federation’s primary

mission is to improve the quality, safety, and integrity of health

care by promoting high standards for physician licensure and practice, as well as supporting and assisting State medical boards in

their protection of the public.

The Federation has been recognized as a national leader on the

issue of telemedicine regulation and has published model telemedicine license legislation and guidelines for Internet prescribing and

medical practice. In our guidelines, the Federation recommends

that Internet prescribing or practice be based on—and I quote from

that text—‘‘a documented patient evaluation including history and

physical evaluation adequate to establish diagnosis and identify

underlying conditions and/or contra-indications to the treatment

recommended and provided, and must be obtained prior to providing treatment, including issuing prescriptions electronically or otherwise.’’

The Federation’s key concern with respect to Internet pharmacies is that there must be an appropriate relationship between

the patient and the physician before a prescription is written and

dispensed. In addition to our guidelines, the Federation has aggresVerDate 11-MAY-2000 08:33 May 19, 2003 Jkt 000000 PO 00000 Frm 00104 Fmt 6633 Sfmt 6633 D:\DOCS\86641.TXT HGOVREF1 PsN: HGOVREF1
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sively sought to identify Internet pharmacies that dispense drugs

based on prescriptions that do not meet minimal standards.

In September 2000, the Federation of State Medical Boards established the National Clearinghouse on Internet Prescribing. This

was designed to collect and disseminate information on rogue Internet sites offering prescribing and dispensing services for prescription drugs to consumers. A major goal of the Clearinghouse is to

facilitate communications among all entities that play a role in regulating Internet pharmacy operations and the physicians associated with them.

Regulatory efforts of State medical boards and other agencies

have been complicated by a number of factors, including: one, the

inability to identify the physical location of the business or pharmacy; two, anonymous physicians approving prescriptions; and,

three, the lack of licensing information on such physicians and the

pharmacies.

In addition, because online pharmacies operate in multiple

States, lack of formal lines of communication has resulted in the

duplication of efforts and missed opportunities for cooperation

among regulatory jurisdictions.

The Federation strongly supports State-based regulation of the

practice of medicine. With regard to Internet prescribing, State

medical boards have the authority to discipline licensed physicians

prescribing and dispensing medications inappropriately. Many

boards have already taken actions against licensees, adopted rules

and policies, or introduced legislation to clarify this authority.

These efforts have been effective in closing several Internet sites

and causing a number of physicians to cease their affiliation with

questionable operations.

The Federation believes that there are at least three areas in

which there is a need for Federal legislation to protect patients ordering prescriptions over the Internet.

First, the patient should know with whom they are dealing. They

should know the name and location of the pharmacy that is dispensing the drug, and they should know the name of the physician

who will be providing a medical consultation that will be the basis

of that prescription. This information should be disclosed on the

Internet pharmacy Web site.

Second, States are currently not able to enforce injunctions

against Internet pharmacies beyond their State jurisdiction. Nationwide injunctive power would greatly enhance enforcement capabilities and reduce the tremendous duplication of efforts currently

taking place.

Third, I noted in my testimony that State licensing boards currently have the authority to discipline physicians who are prescribing and dispensing drugs over the Internet inappropriately.

Federal authorities have indicated the need for clarification of

certain issues, such as what constitutes an appropriate physician/

patient relationship, in order to facilitate Federal enforcement actions. The Federation believes that it is possible to define an appropriate physician/patient relationship narrowly solely for the purpose of enforcing a Federal law regulating Internet pharmacies

without affecting the autonomy of the State boards to regulate the

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practice of medicine. We would be interested in pursuing this

course of action with this committee.

Thank you for the opportunity to testify today. I will be glad to

answer questions at the appropriate time.

I have attached to my testimony the Federation’s model guidelines for the appropriate use of the Internet in medical practice.

Thank you.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Dr. Thompson follows:]

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Chairman TOM DAVIS. Dr. Catizone.

Mr. CATIZONE. Thank you, Mr. Chairman. I’d also like to thank

the Representative for his earlier comments on the VIPPS program.

I am the executive director of the National Association of Boards

of Pharmacy [NABP], which was founded in 1904 and represents

all the pharmacy regulatory and licensing jurisdictions in the

United States, Puerto Rico, the Virgin Islands, eight provinces of

Canada, three Australian states, New Zealand, and South Africa.

Our purpose is to assist the States in developing, implementing,

and enforcing uniform standards for the purpose of protecting the

public health.

Internet pharmacies serving patients in the United States provide valuable and innovative services to the patients. It is unfortunate that the benefits of these legitimate pharmacies are often

overshadowed by the activities of rogue sites whose concerns do not

rest with the best interest of the patient or compliance with State

and Federal laws.

Over the past 6 years, NABP has assumed an active role in differentiating legitimate pharmacy sites from rogue Internet sites

that illegally sell or distribute drugs. During that time we’ve

worked with the State Boards of Pharmacy and Medicine, the FDA,

and State legislatures to develop regulatory strategies to manage

this emerging area and provide consumers with information needed

to distinguish between legitimate pharmacy, Internet sites, and

rogue sites. Our efforts have helped millions of consumers and resulted in the closing of rogue sites and the prosecution of pharmacists and physicians involved with those rogue sites.

In NABP’s opinion the FDA has worked with the States not to

avoid taking action but to construct an effective enforcement process that respects States’ authority and affords due process. Undoubtedly, the issue of importation of medications from Canada is

a complex issue. It is fueled by price differences, but it is an issue

that cannot be resolved by allowing illegal activities to occur. Oversight on both the State and Federal level is needed to bring the

system into compliance or to enforce the laws that presently exist.

Our research has found that rogue sites create several Web

pages around their primary operations. The objective of this operation is to capture as many consumers as possible and deceive

them into believing that the Web pages are independent operating

sites and can deliver drugs.

The information posted on these rogue sites is often purposefully

misleading and in some cases purposely fraudulent so as to lure

consumers to these sites and engage them in the illegal purchase

and distribution of drugs.

The VIPPS program which was mentioned earlier combines State

regulation and licensure with consumer empowerment. NABP conducts an intensive onsite review of all sites in adherence to a 19-

point criterion that looks at all standard licensure requirements, as

well as special Internet applications.

The VIPPS program was implemented with wide consumer acceptance and support. Information about the VIPPS program has

appeared on national local news media and consumer information

specials. The exposure included programming on CNN, ABC World

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News Tonight, NPR Radio, NBC News, CBS News, Fox News, and

other local media outlets. Articles, stories, and consumer advice

recommending the VIPPS programs have also appeared throughout

the print media in local newspapers across the country as well as

in Time Magazine, Newsweek, Ladies Home Journal, Consumer

Reports, USA Today, the Wall Street Journal, the New York Times,

the Washington Post, and other national publications. NABP estimates that more than 10 million consumers have heard, watched,

or read about the VIPPS program.

The States have determined that Internet sites offering prescription medications are engaged in the practice of pharmacy and

therefore must abide by the same laws and rules that presently

apply to traditional brick-and-mortar pharmacies. Internet pharmacies, although unique in their structure and environment, essentially represent the operations of non-resident or mail order pharmacies.

Any Internet legislation that seeks to address consumer need or

consumer information should include verified information. NABP

applauds the objective to separate rogue from legitimate pharmacy

sites, but believes disclosure without some outside, independent assessment or verification will only deceive the consumers further. If

this has not occurred, then rogue sites will engage in illegal activities with a new marketing tool—Government-mandated but

unverified disclosures.

It is NABP’s position that without this validation of information,

rogue sites will post fraudulent information to mislead and confuse

the public without any regard for the possible penalties or actions

for engaging in such conduct.

We appreciate the opportunity to be here today, and I will be

glad to answer any questions.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Mr. Catizone follows:]

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Chairman TOM DAVIS. General Blumenthal, thanks for being

with us.

Mr. BLUMENTHAL. Thank you, Mr. Chairman, and thank you for

your leadership on this issue in holding a hearing and for the very

perceptive and insightful questions that have been asked about this

problem which surely requires Federal intervention at this point to

strengthen the role of State oversight, as well as Federal scrutiny

in an area that, unfortunately, is rife with abuse, deception and

health damage.

The Internet offers enormous promise, as I’ve indicated in my

testimony, for consumers to save very hard-earned dollars and

scarce dollars that they need to buy prescription drugs.

In a survey that my office will release just next week, probably,

we surveyed six Internet pharmacies and compared them to bricksand-mortar stores and found that consumers can realize very, very

significant savings, not just pennies or dollars, but literally hundreds of dollars in using certified—that is, VIPPS-approved—Web

sites to buy drugs that they purchase pursuant to valid prescriptions.

I think that the abuses here come when the Web sites are used

with questionnaires, without legitimate prescriptions, without any

prescriptions at all, without any diagnosis from a licensed doctor,

and that is where the remedies ought to come.

If I may outline some of the areas that I think are particularly

appropriate and important for this committee to address, as Dr.

Thompson has said, I would recommend that Congress require all

Internet Web sites to provide information about the location of the

pharmacy, the legal entity owning it, a contact person for consumer

complaints, a list of employees and State licenses—in short, the

kind of information that will enable consumers and State enforcers,

as well as Federal regulators, to pinpoint responsibility and hold

them accountable.

I would disagree with the implication that there needs to be a

national standard for prescriptions. I think each of the States now

has such standards. I don’t object as a matter of principle to there

being a national standard, but I think it may divert energy and attention away from the areas that do need fundamental reform.

For example, I think Congress ought to require all Internet pharmacies to dispense pharmaceutical drugs only when the prescription meets the standards of the State where the resident who is

buying the pharmaceutical drug actually lives. Requiring them, for

example, to meet Connecticut standards would mean they need the

address of the practitioner who is prescribing the drug, the name

of the drug, the dosage, the strength—basic information that is

contained in every prescription in every State across the country.

And then also very importantly I think that Federal law ought

to require Internet pharmacies to require that prescriptions be

done by a health care provider who meets the State licensing requirements. If I were to go to Indiana or Virginia or South Dakota

or New York and receive the prescription from a licensed doctor,

I wouldn’t have questions about the basic credentials and abilities

of that doctor. The point is to require a prescription that meets the

State standards from a practitioner who meets the State standards.

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And let me just say that the issue here very often does become

one of enforcement, as Mr. Janklow implied. States need the ability

to go to a Federal court. We need Federal jurisdiction for national

injunctions, not just in the State where we try to shut down one

of these rogue Internet sites. In Connecticut, for example, we did

so against a number of the sites and the physicians and we are still

in court on issues of jurisdiction, procedural kinds of tangents, because we are in our State court rather than Federal court, and so

we do need Federal jurisdiction and the power to seek national injunctions.

And, finally, we need tougher penalties so that the fines and the

monetary punishments are not just regarded as the cost of doing

business but offer a real sanction against some of these online outlaws.

I think that these sites can offer real benefits for consumers. The

VIPPS program has been working very well. I commend the NABP

for its efforts in that regard. There is a real potential here, as long

as we avoid the possible abuses.

I might just close—and I thank you for giving me a couple of

extra moments—by making a suggestion about the foreign jurisdictions. If there is a threat from Internet pharmacies based in foreign

countries, I might suggest that the Congress could ban the use of

any financial instruments such as checks, money orders, and electronic transfers, in payment for those kinds of prescriptions that

come from foreign-based Web sites. I realize they are tough to

reach, even under the Federal jurisdiction, but in cutting off the financial air supply, so to speak, we can reach those kinds of foreignbased Web sites. The analogy would be to Internet gambling, where

a similar suggestion has been made under Federal law to ban certain kinds of Internet gambling from foreign-based Web sites. I

think the same kinds of remedies would be effective here. Thank

you, Mr. Chairman.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Mr. Blumenthal follows:]

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Chairman TOM DAVIS. We’ll begin the questioning with Mr. Burton.

Mr. BURTON. I think everybody in the Congress and in the country wants to make sure that the kinds of pharmaceuticals that are

being consumed by Americans are safe. We all want that. We don’t

want adulterated pharmaceuticals. But at the same time, we have

millions of Americans who can’t afford to pay the prices for some

of these pharmaceuticals here in the United States, and yet they

can afford the pharmaceuticals that are the same from Canada.

We’ve already heard that there are no known cases of pharmaceuticals damaging Americans from Canada where a prescription

has been filled up there.

So my feeling is—and I’d like to ask all of you this question—

what would be wrong if we had some kind of a reciprocity agreement between States and between countries where they could

check and make sure that these online pharmaceutical distributors

comply with the laws of, say, Canada as well as the United States,

or Iowa as well as Indiana? It seems to me that we ought to be

bending over backward not only to make sure things are safe, but

to make sure that our citizens are not discriminated against by

pharmaceutical companies.

I mean, when you have a product that costs one-third more in

the United States than it does in Canada and you know that the

pharmaceutical company that is selling that product in Canada is

making a very good profit up there, then you know they’re making

an absolute killing on that product down here in the United States.

And you can’t say that the Americans should bear the brunt of

that.

I have friends of mine that were paying over $1,000 a month for

very significant kinds of drugs because they had not only high

blood pressure but diabetes and a whole host of things, and in Canada they are getting them for about a third or half of that. Now,

why should they have to pay double what they would pay in Canada? And if you have an agreement, a reciprocity agreement between the countries that the two governments could agree on, it

seems to me that would be a legitimate thing for Americans to expect.

Do any of you have a comment on that?

Mr. CATIZONE. I have a comment on that also. We have one documented incident of a patient in the United States being injured by

a medication from Canada. Action is being filed in the State of Oregon. A patient being treated for breast cancer received the wrong

medication and for 3 months was taking that medication, and unfortunately that patient is not doing well now. She has hired an attorney. The attorney has filed an action and also reported it to the

State Board of Pharmacy in Oregon——

Mr. BURTON. OK.

Mr. CATIZONE [continuing]. As well as with authorities in British

Columbia.

Mr. BURTON. So there is one case that you know of?

Mr. CATIZONE. Right. The position that we have taken,

Representative——

Mr. BURTON. Well, let me just interrupt. I’m sorry. There is one

case that you know of?

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Mr. CATIZONE. Yes, sir.

Mr. BURTON. Are there any other cases that you know of?

Mr. CATIZONE. We’ve just begun tracking that information.

Mr. BURTON. But you only know of the one right now?

Mr. CATIZONE. Yes, sir.

Mr. BURTON. How many cases in the United States where doctors have prescribed medicine and people were injured from the

medication that they received here in the States?

Mr. CATIZONE. Estimates run anywhere from 1 to 10 percent of

all patients treated have some——

Mr. BURTON. That’s 1 to 10 percent of all patients?

Mr. CATIZONE. Yes.

Mr. BURTON. So you’re telling me there is one patient in Oregon

that was damaged by a pharmaceutical product coming out of Canada, but you say 1 to 10 percent of the people are damaged here

in the United States?

Mr. CATIZONE. Yes, sir.

Mr. BURTON. So it is really not a big difference. In fact, unless

you find something else, the percentage is probably lower coming

in from Canada, unless you find other things.

Mr. CATIZONE. We’ve just begun looking at it. Until we——

Mr. BURTON. I understand, but yes, see the point I’m trying to

make——

Mr. CATIZONE. And the point we’d like to make is our position

has been very clear. We believe either the laws should be enforced

that currently exist or, as you have suggested, there should be mutual recognition of products approved by Health Canada and the

FDA——

Mr. BURTON. Well, I don’t have any problem with that.

Mr. CATIZONE [continuing]. As well as licensing of those pharmacies by U.S. State boards of pharmacy.

Mr. BURTON. I don’t have any problem with that. What I do have

a problem with are the pharmaceutical companies making all of

this money on the backs of American citizens when they are selling

the same product up there and making a profit out of it. I don’t

believe in price controls. I believe in the free enterprise system.

But at the same time I don’t believe Americans should be raped by

pharmaceutical companies when they are selling the same product

in other parts of the world for a heck of a lot less money and we

have the highest-priced pharmaceuticals in the world, so they are

levying all of the profit or the biggest part of the profit on the

backs of the American citizens, and it is just not right. We should

not be discriminated against. And I am for the free enterprise system.

Thank you, Mr. Chairman.

Mr. BLUMENTHAL. If I may add——

Chairman TOM DAVIS. Sure. Please.

Mr. BLUMENTHAL [continuing]. Just a sentence or two, I, on behalf of myself as the Attorney General of Connecticut, not speaking

for all of my colleagues across the country, would very strongly welcome a more-transparent and free market internationally that

gives our consumers the benefit of lower prices in an international

or global market, which now is not the case, so long as quality, contamination, adulteration, dosage—all of those standard measures of

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acceptability—were the subject of the United States oversight,

which I think is the purpose of your suggesting some kind of reciprocity agreement.

Mr. BURTON. That’s right. And I appreciate your saying that,

General. Thank you.

Chairman TOM DAVIS. Thank you, Mr. Burton.

Mr. Towns.

Mr. TOWNS. Thank you very much, Mr. Chairman.

You know, Dr. Thompson, you mentioned legislation is needed in

a certain area, and I really didn’t get that. Somehow I lost that

part. Where do we need legislation?

Dr. THOMPSON. Actually, we have offered to work with this committee to help define the doctor/patient relationship, which has

been in the past a source of confusion and has led—has caused a

decrease at times in Federal action because of the confusion about

the doctor/patient relationship. We would welcome an opportunity

to help narrowly define that for the purposes of Internet practice.

Mr. TOWNS. Right. But I thought you made some suggestions. I

thought you gave some specific suggestions that you felt were areas

in which we need legislation. I’ll come back to you.

Dr. THOMPSON. Actually, there were three things. One is that we

would highly recommend that there be national disclosure of the

Internet sites and the physicians who are prescribing the medications.

Second, we would strongly encourage some Federal legislation to

allow for injunctions against these Internet pharmacies beyond the

State jurisdictions. The States, as you know, are restricted, and

you heard testimony earlier about the restrictions from going after

pharmacies and businesses in other States. Perhaps Mr.

Blumenthal would care to expand on that. But certainly we would

like injunctive relief that would help us go after pharmacies and

businesses across State lines.

Mr. TOWNS. Thank you. Also, after you comment on that, Mr.

Blumenthal, at the same time I want to know your views on uniformity in terms of the possibility for some guidelines that would

just cover all States.

Mr. BLUMENTHAL. I think the need for uniformity is a very real

concern, and if I might suggest to the committee, there is an excellent model, which is the Federal Telemarketing Sales Act, as described earlier by Mr. Beales of the FTC. The Federal agency there

has the option to enforce a case. If the State chooses to do so independently, it can go to Federal court, but at least the FTC has the

ability to enforce a national standard in every case because it has

what he aptly termed a ‘‘right of first refusal.’’ And so the kind of

framework that I am suggesting—and I think it has been suggested widely—is that there be the authority on the part of States

to enforce a standard that the FTC in a sense would supervise and

assure uniformity, but make it potentially nationwide in every case

through the Federal courts and give the States the option to enforce their cases in Federal court, which would give much more

teeth to the present system.

I can’t emphasize how important that would be as a deterrent to

these kinds of rogue pharmacies, because right now they feel that

they can simply move from one State to another, that they can

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choose States where, for one reason or another, enforcement authorities may not be as vigorous as they would be in other States.

They can avoid State court jurisdiction. They can throw up procedural hurdles and technicalities. I think many of those obstacles

would be removed by this kind of Federal system with Federal jurisdiction modeled on the Federal Telemarketing Sales Act.

Mr. TOWNS. Right, because I’m not even sure what a valid prescription is. What is a valid prescription? I’m not sure, you know.

Do you want to comment on that? That’s the reason why I think

we need some Federal involvement here.

Dr. THOMPSON. Well, the State medical boards have been very

clear about the writing of a prescription, and in all circumstances

have enforced the notion that there should be an adequate doctor/

patient relationship, and this is not satisfied by a survey over the

Internet. It is only satisfied by a face-to-face encounter with a physician, including a history and a physical examination and some

permanent documentation of that encounter we know as a medical

record. Those are at least the minimal standards that the state

Boards would require for a doctor/patient relationship to be established prior to the writing of a prescription.

Mr. TOWNS. Thank you. My time has expired, Mr. Chairman.

Chairman TOM DAVIS. Thank you very much.

General Blumenthal, let me ask you, Mr. Catizone has already

testified that the VIPPS program already requires disclosure from

its participating Web sites. It is an established program. It has

seen some very positive results. What about States enacting legislation to make this certification process mandatory? Is that helpful? Is it possible? Is it probable?

Mr. BLUMENTHAL. I think again, Mr. Chairman—and that question is really a very important and key one—the States could do

so. Connecticut, as a matter of fact, has, at one point or another,

proposed to do so, but I think we need the help of the Federal Government in enforcement.

Chairman TOM DAVIS. Absolutely.

Mr. BLUMENTHAL. And the VIPPS program is excellent. It works

well. It is done in good faith by the NABP and I think is an excellent model. We can expand on it and perhaps enact it into law, but

doing it State by State may not be the answer, simply because of

the enforcement difficulties I mentioned earlier.

Chairman TOM DAVIS. I mean, the problem is you could shut

down a Web site and find the people. They can come up under

some other auspices somewhere else. And the fact is, because of the

price differential, consumers will take the chance and many times

just do it. It’s almost impossible to police. I’m not even sure the

Federal Government could police it, but we would obviously have

more jurisdiction. Is that a fair comment?

Mr. BLUMENTHAL. I think that is a very accurate and fair comment, Mr. Chairman.

Chairman TOM DAVIS. Yes. Connecticut consumer protection

laws, in addition to medical and pharmacy laws, have served as a

vehicle for you to go after the Web sites. When does the illegal dispensing of drugs become the issue for the Federal level? When do

we cross that threshold and it becomes a Federal issue as opposed

to a State issue?

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Mr. BLUMENTHAL. Well, I think there is overlapping jurisdiction.

As you’ve heard from the earlier panel, a violation of Federal law

could involve the same kinds of unfair or deceptive advertising

practices that we have prosecuted at the State level. It’s the reason

that we have sued a number of the Internet Web site pharmacies,

as well as doctors. We sued physicians who participated in those

kinds of illegal practices.

I think the Federal jurisdiction relates to the quality and purity

of drugs. We don’t have the authority over, for example, contamination, counterfeiting, mis-dosage, misbranding of drugs in the same

way that the Federal Government and specifically the FDA does.

Of course, there are different issues of enforcement. We don’t

have the same kind of powers to enforce Federal law now in this

area or to go into Federal court.

Chairman TOM DAVIS. OK.

Mr. Catizone, let me ask you, the VIPPS seal that you place on—

the VIPPS Seal of Approval that consumers ought to be able to

stand by, have people been stealing this seal illegitimately and putting it on a Web site? Has this been a problem?

Mr. CATIZONE. No. The security systems we have in place with

our software people have prevented that from happening. If we

have detected any site where they have tried to copy it, it is immediately known to us and we immediately take action against that

site also.

Chairman TOM DAVIS. OK. All right. Thank you.

Dr. Thompson, what type of actions can you take against a physician who is illegally prescribing to consumers over the Internet

without first establishing a valid patient/physician relationship?

Dr. THOMPSON. The disciplinary actions can include anything

from a hand slap to a revocation of a license. In fact, at least four

physicians have had their licenses revoked as a result of prescribing over the Internet without establishing a physician/doctor relationship. It includes anything from fines to suspensions to, as I

mentioned, revocation.

Chairman TOM DAVIS. It is not all black and white, though, is

it?

Dr. THOMPSON. No.

Chairman TOM DAVIS. Because even some of these illegitimate

sites are selling legitimate goods. We don’t know that they are. We

can’t prove that they are, but in many cases they appear to be. It

is giving consumers something they probably may not be able to afford otherwise, but it is an unfair competitive advantage and there

are, as I think we’ve heard from the last panel, risks involved that

really have not been articulated or measured appropriately—something maybe we need to do a better job of before we move on.

I appreciate your being here. I appreciate your testimony adding

to this. Mr. Waxman has a bill. I think he might have picked up

a couple cosponsors on our side today as a result of this.

Mr. TOWNS. Are we concluding?

Chairman TOM DAVIS. I’m going to let you ask more questions,

Mr. Towns, if you want to.

Mr. TOWNS. Thank you. I appreciate that.

Chairman TOM DAVIS. I’m just thanking and just saying I appreciate for you really adding to our body of knowledge on this. It’s

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something a lot of Members aren’t aware of. As you see, it gets

wrapped up in the whole prescription drug controversy, legislation

we’re trying to pass this year but all the contradictions that occur

in a marketplace that is cluttered sometimes with too much regulation and sometimes too little regulation.

Mr. Towns, did you have any additional questions?

Mr. TOWNS. I do, Mr. Chairman. I just wanted to ask Dr.

Catizone a couple of questions. I understand that the National Association of Boards of Pharmacy certifies Internet pharmacy which

meets certain criteria as verified. Internet pharmacy practice sites

are called VIPPS. Can you tell us about this program, including

how stringent the safety standards are and how many Internet

pharmacies you’ve certified to this date up to date?

Mr. CATIZONE. The VIPPS program has very robust and stringent criterion for approval and for certification. As Mr. Blumenthal

mentioned, we adhere to all of the various State laws as part of

that certification program, so a pharmacy that operates in Illinois

that wants to distribute medications in Connecticut must follow all

the laws for those patients in Connecticut when dispensing those

medications. We review the licensure. We do an onsite inspection.

We check all of their State board inspection reports. We check all

the disciplinary actions against the pharmacy or pharmacist and

then post that information on the Web site for the patients to observe.

We have certified to date 13 sites representing 8,000 to 10,000

pharmacies in the United States.

Mr. TOWNS. I guess the next question would be how do you determine that an Internet pharmacy site provides the information consumers need? I mean, how do you tell, you know?

Mr. CATIZONE. There are a couple of different things we do. As

part of our onsite inspection we look at all of their software programs for detecting adverse drug reactions, interactions, contraindications. We also check all of their procedures on how they adhere to the various State laws, and then independently, using covert Web names, we go then and search those sites and ask for information back from those Web sites, time how long it takes for the

information to come, test their 1–800 numbers, and test their reaction to patient problems with medications the site may have sent

to them, document that, review all that, and then set standards for

those sites to meet.

Mr. TOWNS. OK. If you find that they’re actually violating VIPPS

program guidelines, you know, what do you do in a case like that?

Mr. CATIZONE. If they are violating our guidelines they are probably violating State laws, so we’ll do one of two things. One, we’ll

notify the States in which they are operating that the you’re probably violating their laws. Second, we’ll move to withdraw their certification immediately from that site.

Mr. TOWNS. All right. Thank you very much.

Thank you, Mr. Chairman, for allowing me to ask additional

questions.

Chairman TOM DAVIS. Thank you very much.

Again, I want to thank the panel. Is there anything else anyone

wants to add?

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Mr. BLUMENTHAL. Mr. Chairman, I might just respond to a point

that you made which I don’t think has been made by anyone else

on the panel relating to the dangers of some of these Web sites

going beyond adulteration or inappropriate or mis-dosed drugs.

There are also very significant dangers of addiction and abuse of

drugs as a result of these Web sites. The kinds of availability of,

for example, very powerful pain killers, hydrocodones, opiates that

are, in effect, given out not only affordably but abusively through

a number of these Web sites is a major problem, and so I think addiction is a major part of the problem.

Chairman TOM DAVIS. Once you really take the physician out of

the equation, a lot of bad things can happen on this.

Mr. BLUMENTHAL. Exactly. Thank you.

Chairman TOM DAVIS. Well, thank you very much. I want to

again thank you for your testimony today. It was an outstanding

panel. I’d like to thank the committee staff that worked on this

hearing and thank Mr. Waxman for calling this issue to the committee’s attention.

The hearing is now adjourned.

[Whereupon, at 12:30 p.m., the committee was adjourned, to reconvene at the call of the Chair.]

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