Three types of Internet pharmacies selling prescription drugs directly to consumers have emerged in recent years. First, some Internet pharmacies operate much like traditional drugstores or mail-order pharmacies: they dispense drugs only after receiving prescriptions from consumers or their physicians. Other Internet pharmacies provide customers medication without a physical examination by a physician. In place of the traditional face-to-face physician/patient consultation, the consumer fills out a medical questionnaire that is reportedly evaluated by a physician affiliated with the pharmacy. If the physician approves the questionnaire, he or she authorizes the online pharmacy to send the medication to the patient. This practice tends to be largely limited to “lifestyle” prescription drugs, such as those that alleviate allergies, promote hair growth, treat impotence, or control weight. Finally, some Internet pharmacies dispense medication without a prescription. Regardless of their methods, all Web sites selling prescription drugs are governed by the same complex network of laws and regulations at both the state and federal levels that govern traditional drugstores and mail-order drug services. In the United States, prescription drugs must be prescribed and dispensed by licensed health care professionals, who can help ensure proper dosing and administration and provide important information on the drug’s use to customers. To legally dispense a prescription drug, a pharmacist licensed with the state and working in a pharmacy licensed by the state must be presented a valid prescription from a licensed health care professional. Every state requires resident pharmacists and pharmacies to be licensed. The regulation of the practice of pharmacy is rooted in state pharmacy practice acts and regulations enforced by the state boards of pharmacy, which are responsible for licensing pharmacists and pharmacies. The state boards of pharmacy also are responsible for routinely inspecting pharmacies, ensuring that pharmacists and pharmacies comply with applicable state and federal laws, and investigating and disciplining those that fail to comply. In addition, 40 states require out-of-state pharmacies—called nonresident pharmacies—that dispense prescription drugs to state residents to be licensed or registered. Some state pharmacy boards regulate Internet pharmacies according to the same standards that apply to nonresident pharmacies. State pharmacy boards’ standards may require that nonresident pharmacies do the following: maintain separate records of prescription drugs dispensed to customers in the state so that these records are readily retrievable from the records of prescription drugs dispensed to other customers; provide a toll-free telephone number for communication between customers in the state and a pharmacist at the nonresident pharmacy and affix this telephone number to each prescription drug label; provide the location, names, and titles of all principal corporate officers; provide a list of all pharmacists who are dispensing prescription drugs to customers in the state; designate a pharmacist who is responsible for all prescription drugs dispensed to customers in the state; provide a copy of the most recent inspection report issued by the home provide a copy of the most recent license issued by the home state. States also are responsible for regulating the practice of medicine. All states require that physicians practicing in the state be licensed to do so. State medical practice laws generally outline standards for the practice of medicine and delegate the responsibility of regulating physicians to state medical boards. State medical boards license physicians and grant them prescribing privileges.In addition, state medical boards investigate complaints and impose sanctions for violations of the state medical practice laws. While states have jurisdiction within their borders, the sale of prescription drugs on the Internet can occur across state lines. The sale of prescription drugs between states or as a result of importation falls under the jurisdiction of the federal government. FDA is responsible for ensuring the safety, effectiveness, and quality of domestic and imported pharmaceutical products under the FDCA. Specifically, FDA establishes standards for the safety, effectiveness, and manufacture of prescription drugs that must be met before they are approved for the U.S. market. FDA can take action against (1) the importation, sale, or distribution of an adulterated, misbranded, or unapproved drug; (2) the illegal promotion of a drug; (3) the sale or dispensing of a prescription drug without a valid prescription; and (4) the sale and dispensing of counterfeit drugs. If judicial intervention is required, Justice will become involved to enforce the FDCA. Justice also enforces other consumer protection statutes for which the primary regulatory authorities are administrative agencies such as FDA and FTC. FTC has responsibility for preventing deceptive or unfair acts or practices in commerce and has authority to bring an enforcement action when an Internet pharmacy makes false or misleading claims about its products or services. Finally, Justice’s DEA regulates controlled substances, which includes issuing all permits for the importation of pharmaceutical controlled substances and registering all legitimate importers and exporters, while Customs and the Postal Service enforce statutes and regulations governing the importation and domestic mailing of drugs. The very nature of the Internet makes identifying all pharmacies operating on it difficult. As a result, the precise number of Internet pharmacies selling prescription drugs directly to consumers is unknown. We identified 190 Internet pharmacies selling prescription drugs directly to consumers, 79 of which dispense prescription drugs without a prescription or on the basis of a consumer’s having completed an online questionnaire (see table 1). Also, 185 of the identified Internet pharmacies did not disclose the states where they were licensed to dispense prescription drugs, and 37 did not provide an address or telephone number permitting the consumer to contact them if problems arose. Obtaining prescription drugs from unlicensed pharmacies without adequate physician supervision, including an examination, places consumers at risk of harmful side effects, possibly even death, from drugs that may be inappropriate for them. Estimates of the number of Internet pharmacies range from 200 to 400. However, it is difficult to determine the precise number of Internet pharmacies selling prescription drugs directly to consumers because Internet sites can be easily created and removed and some Internet pharmacies operate for a period of time at one Internet address and then close and reappear under another name. In addition, many Internet pharmacies have multiple portal sites (independent Web pages that connect to a single pharmacy). We found 95 sites that at first appeared to be discrete Internet pharmacies but were actually portal sites. As consumers click on the icons and links provided, they are brought to an Internet site that is completely different from the one they originally visited. Consumers may be unaware of these site changes unless they are paying close attention to the Internet site address bar on their browser. Some Internet pharmacies had as many as 18 portal sites. About 58 percent, or 111, of the Internet pharmacies we identified told consumers that they had to provide a prescription from their physician to purchase prescription drugs. Prescriptions may be submitted to an Internet pharmacy in various ways, including by mail or fax and through contact between the consumer’s physician or current pharmacy and the Internet pharmacy. The Internet pharmacy then verifies that a licensed physician actually has issued the prescription to the patient before it dispenses any drugs. Internet pharmacies that require a prescription from a physician generally operate similarly to traditional drugstore or mail-order pharmacies. In some instances, the Internet site is owned by or affiliated with a traditional drugstore. We identified 54 Internet pharmacies that issued prescriptions and dispensed medications on the basis of an online questionnaire. Generally, these short, easy-to-complete questionnaires asked about the consumer’s health profile, medical history, current medication use, and diagnosis. In some instances, pharmacies provided the answers necessary to obtain the prescription by placing checks next to the “correct” answers. Information on many of the Internet sites indicated that a physician reviews the questionnaire and then issues a prescription. The cost of the physician’s review ranged from $35 to $85, with most sites charging $75.Moreover, certain illegal and unethical prescribing and dispensing practices are occurring through some Internet pharmacies that focus solely on prescribing and dispensing certain “lifestyle” drugs, such as diet medications and drugs to treat impotence. We also identified 25 Internet pharmacies that dispensed prescription drugs without prescriptions. In the United States, it is illegal to sell or dispense a prescription drug without a prescription. Nevertheless, to obtain a drug from these Internet pharmacies, the consumer was asked only to complete an order form indicating the type and quantity of the drug desired and to provide credit card billing information. Twenty-one of these 25 Internet pharmacies were located outside the United States; the location of the remaining 4 could not be determined. Generally, it is illegal to import prescription drugs that are not approved by FDA and manufactured in an FDA-approved facility.Obtaining prescription drugs from foreign-based Internet pharmacies places consumers at risk from counterfeit or unapproved drugs, or drugs that were manufactured and stored under poor conditions. The Internet pharmacies that we identified varied significantly in the information that they disclosed on their Web sites. For instance, 153 of the 190 Internet pharmacies we reviewed provided a mailing address or telephone number (see table 1). The lack of adequate identifying information prevents consumers from contacting Internet pharmacies if problems should arise. More importantly, most Internet pharmacies did not disclose the states where they were licensed to dispense prescription drugs. We contacted all U.S.-based Internet pharmacies to obtain this information.We then asked pharmacy boards in the 12 states with the largest numbers of licensed Internet pharmacies (70 in all) to verify their licensure status. Sixty-four pharmacies required a prescription to dispense drugs; of these, 22, or about 34 percent, were not licensed in one or more of the states in which they had told us they were licensed and in which they dispensed drugs. Internet pharmacies that issued prescriptions on the basis of online questionnaires disclosed even less information on their Web sites. Only 1 of the 54 Internet pharmacies disclosed the name of the physician responsible for reviewing questionnaires and issuing prescriptions. We attempted to contact 45 of these Internet pharmacies to obtain their licensure status; we did not attempt to contact 9 because they were located overseas. We were unable to reach 13 because they did not provide, and we could not obtain, a mailing address or telephone number. In addition, 18 would not return repeated telephone calls, 3 were closed, and 2 refused to tell us where they were licensed. As a result, we were able to obtain licensure information for only nine Internet pharmacies affiliated with physicians that prescribe online. We found that six of the nine prescribing pharmacies were not licensed in one or more of the states in which they had told us they were licensed and in which they dispensed prescription drugs. The ability to buy prescription drugs from Internet pharmacies not licensed in the state where the customer is located and without appropriate physician supervision, including an examination, means that important safeguards related to the doctor/patient relationship and intrinsic to conventional prescribing are bypassed. We also found that only 44 Internet pharmacies (23 percent) posted a privacy statement on their Web sites. As recent studies have indicated, consumers are concerned about safeguarding their personal health information online and about potential transfers to third parties of the personal information they have given to online businesses.The majority of these pharmacies stated that the information provided by the patient would be kept confidential and would not be sold or traded to third parties. Our review of state privacy laws revealed that at least 21 states have laws protecting the privacy of pharmacy information. While the federal Health Insurance Portability and Accountability Act of 1996 called for nationwide protections for the privacy and security of electronic health information, including pharmacy data, regulations have not yet been finalized. State pharmacy and medical boards have policies created to regulate brick and mortar pharmacies and traditional doctor/patient relationships. However, the traditional regulatory and enforcement approaches used by these boards may not be adequate to protect consumers from the potentially dangerous practices of some Internet pharmacies. Nevertheless, 20 states have taken disciplinary action against Internet pharmacies and physicians that have engaged in illegal or unethical practices. Many of these states have also introduced legislation to address illegal or unethical sales practices of Internet pharmacies and physicians prescribing on the Internet. Appendix II contains details on state actions to regulate pharmacies and physicians practicing on the Internet. The advent of Internet pharmacies poses new challenges for the traditional state regulatory agencies that oversee the practices of pharmacies. While 12 pharmacy boards reported that they have taken action against Internet pharmacies for illegally dispensing prescription drugs, many said they have encountered difficulties in identifying, investigating, and taking disciplinary action against illegally operating Internet pharmacies that are located outside state borders but shipping to the state.State pharmacy board actions consisted of referrals to federal agencies, state Attorneys General, or state medical boards. Almost half of the state pharmacy boards reported that they had experienced problems with or received complaints about Internet pharmacies. Specifically, 24 state pharmacy boards told us that they had experienced problems with Internet pharmacies not complying with their state pharmacy laws. The problems most commonly cited were distributing prescription drugs without a valid license or prescription, or without establishing a valid physician/patient relationship. Moreover, 20 state boards (40 percent) reported they had received at least 78 complaints, ranging from 1 to 15 per state, on Internet pharmacy practices. Many of these complaints were about Internet pharmacies that were dispensing medications without a valid prescription or had dispensed the wrong medication. State pharmacy boards also reported that they have encountered difficulties in identifying Internet pharmacies that are located outside their borders. About 74 percent of state pharmacy boards reported having serious problems determining the physical location of an Internet pharmacy affiliated with an Internet Web site. Sixteen percent of state pharmacy boards reported some difficulty, and 10 percent reported no difficulty. Without this information, it is difficult to identify the companies and people responsible for selling prescription drugs. More importantly, state pharmacy boards have limited ability and authority to investigate and act against Internet pharmacies located outside their state but doing business in their state without a valid license. In our survey, many state pharmacy boards cited limited resources, and jurisdictional and technological limitations, as obstacles to enforcing their laws with regard to pharmacies not located in their states. Because of jurisdictional limits, states have found that their traditional investigative tools—interviews, physical or electronic surveillance, and serving subpoenas to produce documents and testimony—are not necessarily adequate to compel disclosure of information from a pharmacy or pharmacist located out of state. Similarly, the traditional enforcement mechanisms available to state pharmacy boards—disciplinary actions or sanctions against licensees—are not necessarily adequate to control a pharmacy or pharmacist located out of state.In the absence of the ability to investigate and take disciplinary action against a nonresident pharmacy, state pharmacy boards have been limited to referring unlicensed or unregistered Internet pharmacies to their counterpart boards in the states where the pharmacies are licensed. State medical boards have concerns about the growing number of Internet pharmacies that issue prescriptions on the basis of a simple online questionnaire rather than a face-to-face examination. The AMA is also concerned that prescriptions are being provided to patients without the benefit of a physical examination, which would allow evaluation of any potential underlying cause of a patient’s dysfunction or disease, as well as an assessment of the most appropriate treatment. Moreover, medical boards are receiving complaints about physicians prescribing on the Internet. Twenty of the 45 medical boards responding to our survey reported that they had received complaints about physicians prescribing on the Internet during the last year.The most frequent complaint was that the physician did not perform an examination of the patient. As a result, medical boards in eight states have taken action against physicians for Internet prescribing violations. Disciplinary actions and sanctions have ranged from monetary fines and letters of reprimand to probation and license suspension. Thirty-nine of the 45 medical boards responding to our survey concluded that a physician who issued a prescription on the basis of a review of an online questionnaire did not satisfy the standard of good medical practice required under their states’ laws. Moreover, ten states have introduced or enacted legislation regarding the sale of prescription drugs on the Internet; including five states that have introduced legislation to prohibit physicians and other practitioners from prescribing prescription drugs on the Internet without conducting an examination or having a prior physician/patient relationship. Twelve states have adopted rules or statements that clarify their positions on the use of online questionnaires for issuing prescriptions. Generally, these statements either prohibit online prescribing or state that prescribing solely on the basis of answers to a questionnaire is inappropriate and unprofessional (see app. II). As in the case of state pharmacy boards, state medical boards have limited ability and authority to investigate and act against physicians located outside of their state but prescribing on the Internet to state residents. Further, they too have had difficulty identifying these physicians. About 55 percent of state medical boards that responded to our survey told us they had difficulty determining both the identity and location of physicians prescribing drugs on the Internet, and 36 percent had difficulty determining whether the physician was licensed in another state. Since February 1999, six state Attorneys General have brought legal action against Internet pharmacies and physicians for providing prescription drugs to consumers in their states without a state license and for issuing prescriptions solely on the basis of information provided in online questionnaires. Most of the Internet pharmacies that were sued voluntarily stopped shipping prescription drugs to consumers in those states. As a result, at least 18 Internet pharmacies have stopped selling prescription drugs to residents in Illinois, Kansas, Michigan, Missouri, New Jersey, and Pennsylvania.Approximately 15 additional states are investigating Internet pharmacies for possible legal action. Investigating and prosecuting online offenders raise new challenges for law enforcement. For instance, Attorneys General also have complained that the lack of identifying information on pharmacy Web sites makes it difficult to identify the companies and people responsible for selling prescription drugs. Moreover, even if a state successfully sues an Internet pharmacy for engaging in illegal or unethical practices, such as prescribing on the basis of an online questionnaire or failing to adequately disclose identifying information, the Internet pharmacy is not prohibited from operating in other states. To stop such practices, each affected state must individually bring action against the Internet pharmacy. As a result, to prevent one Internet pharmacy from doing business nationwide, the Attorney General in every state would have to file a lawsuit in his or her respective state court. Five federal agencies have authority to regulate and enforce U.S. laws that could be applied to the sale of prescription drugs on the Internet. Since Internet pharmacies first began operation in early 1999, FDA, Justice, DEA, Customs, and FTC have increased their efforts to respond to public health concerns about the illegal sale of prescription drugs on the Internet.FDA has taken enforcement actions against Internet pharmacies selling prescription drugs, Justice has prosecuted Internet pharmacies and physicians for dispensing medications without a valid prescription, DEA has investigated Internet pharmacies for illegal distribution of controlled substances, Customs has increased its seizure of packages that contain drugs entering the country, and FTC has negotiated settlements with Internet pharmacies for making deceptive health claims. While these agencies’ contributions are important, their efforts sometimes do not support each other. For instance, to conserve its resources FDA routinely releases packages of prescription drugs that Customs has detained because they may have been obtained illegally from foreign Internet pharmacies. Such uncoordinated program efforts can waste scarce resources, confuse and frustrate enforcement program administrators and customers, and limit the overall effectiveness of federal enforcement efforts. FDA has recently increased its monitoring and investigation of Internet pharmacies to determine if they are involved in illegal sales of prescription drugs. FDA has primary responsibility for regulating the sale, importation, and distribution of prescription drugs, including those sold on the Internet. In July 1999, FDA testified before the Congress that it did not generally regulate the practice of pharmacy or the practice of medicine. Accordingly, FDA activities regarding the sale of drugs over the Internet had until then focused on unapproved drugs. As of April 2000, however, FDA had 54 ongoing investigations of Internet pharmacies that may be illegally selling prescription drugs. FDA has also referred to Justice for possible criminal prosecution approximately 33 cases involving over 100 Internet pharmacies that may be illegally selling prescription drugs. FDA’s criminal investigations of online pharmacies have, to date, resulted in the indictment and/or arrest of eight individuals, two of whom have been convicted. In addition, FDA is seeking $10 million in fiscal year 2001 to fund 77 staff positions that would be dedicated to investigating and taking enforcement actions against Internet pharmacies. Justice has increased its prosecution of Internet pharmacies illegally selling prescription drugs. Under the FDCA, a prescription drug is considered misbranded if it is not dispensed pursuant to a valid prescription under the professional supervision of a licensed practitioner. In July 1999, Justice testified before the Congress that it was examining its legal basis for prosecuting noncompliant Internet pharmacies and violative online prescribing practices. Since that time, according to FDA officials, 22 of the 33 criminal investigations FDA referred to Justice have been actively pursued. Two of the 33 cases were declined by Justice and are being prosecuted as criminal cases by local district attorneys, and 9 were referred to the state of Florida. In addition, Justice filed two cases involving the illegal sale of prescription drugs over the Internet in 1999 and is investigating approximately 20 more cases. Since May 2000, Justice has brought charges against, or obtained convictions of, individuals in three cases involving the sale of prescription drugs by Internet pharmacies without a prescription or the distribution of misbranded drugs. While DEA has no efforts formally dedicated to Internet issues, it has initiated 20 investigations of the use of the Internet for the illegal sale of controlled substances during the last 15 months. DEA has been particularly concerned about Internet pharmacies that are affiliated with physicians who prescribe controlled substances without examining patients. For instance, in July 1999 a DEA investigation led to the indictment of a Maryland doctor on 34 counts of providing controlled substances to patients worldwide in response to requests made over the Internet. Because Maryland requires that doctors examine patients before prescribing medications, the doctor’s prescriptions were not considered to be legitimately provided. The physician’s conduct on the Internet also violated an essential requirement of federal law, which is that controlled substances must be dispensed only with a valid prescription. The U.S. Customs Service, which is responsible for inspecting packages shipped to the United States from foreign countries, has increased its seizures of prescription drugs from overseas. Customs officials report that the number of drug shipments seized increased about 450 percent between 1998 and 1999—from 2,139 to 9,725. Most of these seizures involved controlled substances. Because of the large volume, Customs is able to examine only a fraction of the packages entering the United States daily and cannot determine how many of its drug seizures involve prescription drugs purchased from Internet pharmacies. Nevertheless, Customs officials believe that the Internet is playing a role in the increase in illegal drug importation. According to Customs officials, fiscal year 2000 seizures are on pace to equal or surpass 1999 levels. FTC reports that it is monitoring Internet pharmacies for compliance with the Federal Trade Commission Act, conducting investigations, and making referrals to state and federal authorities. FTC is responsible for combating unfair or deceptive trade practices, including those on the Internet, such as misrepresentation of online pharmacy privacy practices. In 1999, FTC referred two Internet pharmacies to state regulatory boards. This year, FTC charged individuals and Internet pharmacies with making false promotional claims and other violations. Recently, the operators of these Internet pharmacies agreed to settle out of court. According to the settlement agreement, the defendants are barred from misrepresenting medical and pharmaceutical arrangements and any material fact about the scope and nature of the defendants’ goods, services, or facilities. The sale of prescription drugs to U.S. residents by foreign Internet pharmacies poses the most difficult challenge for U.S. law enforcement authorities because the seller is not located within U.S. boundaries. Many prescription drugs available from foreign Internet pharmacies are either products for which there is no U.S.-approved counterpart or foreign versions of FDA-approved drugs. In either case, these drugs are not approved for use in the United States, and therefore it is illegal for a foreign Internet pharmacy to ship these products to the United States. In addition, federal law prohibits the sale of prescription drugs to U.S. citizens without a valid prescription. Although FDA officials said that the agency has jurisdiction over a resident in a foreign country who sells to a U.S. resident in violation of the FDCA, from a practical standpoint, FDA is hard-pressed to enforce U.S. laws against foreign sellers.As a result, FDA enforcement efforts against foreign Internet pharmacies have been limited mostly to requesting the foreign government to take action against the seller of the product. FDA has also posted information on its Web site to help educate consumers about safely purchasing drugs from Internet pharmacies. FDA officials have sent 23 letters to operators of foreign Internet pharmacies warning them that they may be engaged in illegal activities, such as offering to sell prescription drugs to U.S. citizens without a valid, or in some cases without any, prescription. Copies of each letter were sent to regulatory officials in the country in which the pharmacy was based. In response, two Internet pharmacies said they will cease their sales to U.S. residents, and a third said it has ceased its sales regarding one drug but is still evaluating how it will handle other products. FDA has since requested that Customs detain packages from these Internet pharmacies. Customs has been successful in working with one foreign government to shut down its Internet pharmacies that were illegally selling prescription drugs to U.S. consumers. In January 2000, Customs assisted Thailand authorities in the execution of search and arrest warrants against seven Internet pharmacies, resulting in the arrest of 22 Thai citizens for violating Thailand’s drug and export laws and 6 people in the United States accused of buying drugs from the Thailand Internet pharmacy. U.S. and Thailand officials seized more than 2.5 million doses of prescription drugs and 245 parcels ready for shipment to the United States. According to FDA, it is illegal for a foreign-based Internet pharmacy to sell prescription drugs to consumers in the United States if those drugs are unapproved or are not dispensed pursuant to a valid prescription. But FDA permits patients and their physicians to obtain small quantities of drugs sold abroad, but not approved in the United States, for the treatment of a serious condition for which effective treatment may not be available domestically. FDA’s approach has been applied to products that do not represent an unreasonable risk and for which there is no known commercialization or promotion to U.S. residents. Further, a patient seeking to import such a product must provide to FDA the name of the licensed physician in the United States responsible for his or her treatment with the unapproved drug or provide evidence that the product is for continuation of a treatment begun in a foreign country. FDA has acknowledged that its guidance concerning importing prescription drugs through the mail has been inconsistently applied. At many Customs mail centers, FDA personnel rely on Customs officials to detain suspicious drug imports for FDA screening. Although prescription drugs ordered from foreign Internet pharmacies may not meet FDA’s criteria for importation under the personal use exemption, FDA personnel routinely release illegally imported prescription drugs detained by Customs officials. FDA has determined that the use of agency resources to provide comprehensive coverage of illegally imported drugs for personal use is generally not justified. Instead, the agency’s enforcement priorities are focused on drugs intended for the commercial market and on fraudulent products and those that pose an unreasonable health risk. FDA’s inconsistent application of its personal use exemption frustrates Customs officials and does little to deter foreign Internet pharmacies trafficking in prescription drugs. Accordingly, FDA plans to take the necessary actions to eliminate, or at least mitigate to the extent possible, the inconsistent interpretation and application of its guidance and work more closely with Customs. FDA’s approach to regulation of imported prescription drugs could be affected by enactment of pending legislation intended to allow American consumers to import drugs from certain other countries. Specifically, the appropriations bill for FDA (H.R. 4461) includes provisions that could modify the circumstances under which the agency may notify individuals seeking to import drugs into the United States that they may be in violation of federal law. According to an FDA official, it is not currently clear how these provisions, if enacted, could affect FDA’s ability to prevent the importation of violative drugs. Initiatives at the state and federal levels offer several approaches for regulating Internet pharmacies. The organization representing state boards of pharmacy, NABP, has developed a voluntary program for certifying Internet pharmacies. In addition, state and federal officials believe that they need more authority, as well as information regarding the identity of Internet pharmacies, to protect the public’s health. The organization representing state Attorneys General, NAAG, has asked the federal government to expand the authority of its members to allow them to take action in federal court. In addition, the administration has announced a new initiative that would grant FDA broad new authority to better identify, investigate, and prosecute Internet pharmacies for the illegal sale of prescription drugs. Concerned that consumers have no assurance of the legitimacy of Internet pharmacies, NABP is attempting to provide consumers with an instant mechanism for verifying the licensure status of Internet pharmacies. NABP’s Verified Internet Pharmacy Practice Sites (VIPPS) is a voluntary program that certifies online pharmacies that comply with criteria that attempt to combine state licensing requirements with standards developed by NABP for pharmacies practicing on the Internet. To obtain VIPPS certification, an Internet pharmacy must comply with the licensing and inspection requirements of the state where it is physically located and of each state to which it dispenses pharmaceuticals; demonstrate compliance with 17 standards by, for example, ensuring patient rights to privacy, authenticating and maintaining the security of prescription orders, adhering to recognized quality assurance policy, and providing meaningful consultation between customers and pharmacists; undergo an on-site inspection; develop a postcertification quality assurance program; and submit to continuing random inspections throughout a 3-year certification period. VIPPS-certified pharmacies are identified by the VIPPS hyperlink seal displayed on both their and NABP’s Web sites.Since VIPPS began in the fall of 1999, its seals have been presented to 11 Internet pharmacies, and 25 Internet pharmacies have submitted applications to display the seal. NAAG strongly supports the VIPPS program but maintains that the most important tool the federal government can give the states is nationwide injunctive relief. Modeled on the federal telemarketing statute, nationwide injunctive relief is an approach that would allow state Attorneys General to take action in federal court; if they were successful, an Internet pharmacy would be prevented from illegally selling prescription drugs nationwide. Two federal proposals would amend the FDCA to require an Internet pharmacy engaged in interstate commerce to include certain identifying language on its Web site. The Internet Pharmacy Consumer Protection Act (H.R. 2763) would amend the FDCA to require an Internet pharmacy engaged in interstate commerce to include a page on its Web site providing the following information: the name, address, and telephone number of the pharmacy’s principal each state in which the pharmacy is authorized by law to dispense the name of each pharmacist and the state(s) in which the individual is if the site offers to provide prescriptions after medical consultation, the name of each prescriber, the state(s) in which the prescriber is licensed, and the health professions in which the individual holds such licenses. Also, under this act a state would have primary enforcement responsibility for any violation involving the purchase of a prescription drug made within the state, provided the state had requirements at least as stringent as those specified in the act and adequate procedures for enforcing those requirements. In addition, the administration has developed a bill aimed at providing consumers the protections they enjoy when they go to a drugstore to have their prescriptions filled. For example, when consumers walk into a drugstore to have a prescription filled, they know the identity and location of the pharmacy, and the license on the wall provides visual assurance that the pharmacy meets certain health and safety requirements in that state. Under the Internet Prescription Drug Sales Act of 2000, Internet pharmacies would be required to be licensed in each state where they do business; comply with all applicable state and federal requirements, including the requirement to dispense drugs only pursuant to a valid prescription; and disclose identifying information to consumers. Internet pharmacies also would be required to notify FDA and all applicable state boards of pharmacy prior to launching a new Web site.Internet pharmacies that met all of the requirements would be able to post on their Web site a declaration that they had made the required notifications. FDA would designate one or more private nonprofit organizations or state agencies to verify licensing information included in notifications and to examine and inspect the records and facilities of Internet pharmacies. Internet pharmacies that do not meet notification and disclosure requirements or that sell prescription drugs without a valid prescription could face penalties as high as $500,000 for each violation. While it supports the Internet Prescription Drug Sales Act of 2000, Justice officials have recommended that it be modified. Prescription drug sales from Internet pharmacies often rely on credit card transactions processed by U.S. banks and credit card networks. To enhance its ability to investigate and stop payment for prescription drugs purchased illegally, Justice has recommended that federal law be amended to permit the Attorney General to seek injunctions against certain financial transactions traceable to unlawful online drug sales. According to Justice officials, if the Department and financial institutions can stop even some of the credit card orders for the illicit sale of prescription drugs and controlled substances, the operations of some “rogue” Internet pharmacies may be disrupted significantly. The unique qualities of the Internet pose new challenges for enforcing state pharmacy and medical practice laws because they allow pharmacies and physicians to reach consumers across state and international borders and remain anonymous. Internet pharmacies that fail to obtain licensure in the states where they operate may violate state law. But the Internet pharmacies that are affiliated with physicians that prescribe on the basis of an online questionnaire and those that dispense drugs without a prescription pose the most potential harm to consumers. Dispensing prescription drugs without adequate physician supervision increases the risk of consumers’ suffering adverse events, including side effects from inappropriately prescribed medications and misbranded or contaminated drugs. Some states have taken action to stop Internet pharmacies that offer online prescribing services from selling prescription drugs to residents of their state. But the real difficulty lies in identifying responsible parties and enforcing laws across state boundaries. Enforcement actions by federal agencies have begun addressing the illegal prescribing and dispensing of prescription drugs by domestic Internet pharmacies and their affiliated physicians. Enactment of federal legislation requiring Internet pharmacies to disclose, at a minimum, who they are, where they are licensed, and how they will secure personal health information of consumers would assist state and federal authorities in enforcing existing laws. In addition, federal agencies have taken actions to address the illegal sale of prescription drugs from foreign Internet pharmacies. Cooperative efforts between federal agencies and a foreign government resulted in closing down some Internet pharmacies illegally selling prescription drugs to U.S. consumers. However, it is unclear whether these efforts will stem the flow of prescription drugs obtained illegally from other foreign sources. As a result, the sale of prescription drugs from foreign-based Internet pharmacies continues to pose difficulties for federal regulatory authorities. To help ensure that consumers and state and federal regulators can easily identify the operators of Web sites selling prescription drugs, the Congress should amend the FDCA to require that any pharmacy shipping prescription drugs to another state disclose certain information on its Internet site. The information disclosed should include the name, business address, and telephone number of the Internet pharmacy and its principal officers or owners, and the state(s) where the pharmacy is licensed to do business. In addition, where permissible by state law, Internet pharmacies that offer online prescribing services should also disclose the name, business address, and telephone number of each physician providing prescribing services, and the state(s) where the physician is licensed to practice medicine. The Internet Pharmacy Consumer Protection Act and the administration’s proposal would require Internet pharmacies to disclose this type of information. We obtained comments on a draft of this report, from FDA, Justice, FTC, and Customs, as well as NABP and FSMB. In general, they agreed that Internet pharmacies should be required to disclose pertinent information on their Web sites and thought that our report provided an informative summary of efforts to regulate Internet pharmacies. Some reviewers also provided technical comments, which we incorporated where appropriate. However, FDA suggested that our matter for consideration implied that online questionnaires were acceptable as long as the physician’s name was properly disclosed. We did not intend to imply that online prescribing was proper medical practice. Rather, our report notes that most state medical boards responding to our survey have already concluded that a physician who issues a prescription on the basis of a review of an online questionnaire has not satisfied the standard of good medical practice required by state law. In light of this, federal action does not appear necessary. The disclosure of the responsible parties should assist state regulatory bodies in enforcing their laws. FTC suggested that our matter for congressional consideration be expanded to recommend that the Congress grant states nationwide injunctive relief. Our report already discusses NAAG’s proposal that injunctive relief be modeled after the federal telemarketing statute. While the NAAG proposal may have some merit, an assessment of the implications of this proposal was beyond the scope of our study. FTC also recommended that the Congress enact federal legislation that would require consumer-oriented commercial Web sites that collect personal identifying information from or about consumers online, including Internet pharmacies, to comply with widely accepted fair information practices. Again, our study did not evaluate whether a federal consumer protection law was necessary or if existing state laws and regulations may already offer this type of consumer protection. NABP did not agree entirely with our assessment of the regulatory effectiveness of the state boards of pharmacy. It indicated that the boards, with additional funding and minor legislative changes, can regulate Internet pharmacies. Our study did not assess the regulatory effectiveness of individual state pharmacy boards. Instead, we summarized responses by state pharmacy boards to our questions about their efforts to identify and take action against Internet pharmacies that are not complying with state law, and the challenges they face in regulating these pharmacies. Our report notes that many states identified limited resources and jurisdictional limitations as obstacles to enforcing their laws. NABP also suggested that our matter for congressional consideration include a requirement for independent verification of the information that Internet pharmacies are required to disclose on their Web sites. In our view, the current state regulatory framework would permit state boards to verify this information should they choose to do so. We are sending copies of this report to the Honorable Donna E. Shalala, Secretary of Health and Human Services; the Honorable Jane E. Henney, Commissioner of FDA; the Honorable Janet Reno, Attorney General; the Honorable Donnie R. Marshall, Administrator of the DEA; the Honorable Robert Pitofsky, Chairman of the FTC; the Honorable Raymond W. Kelly, Commissioner of the U.S. Customs Service; the Honorable Kenneth C. Weaver, Chief Postal Inspector; appropriate congressional committees; and other interested parties. We will make copies available to others upon request. If you or your staffs have any questions about this report or would like additional information, please call me at (202) 512-7119 or John Hansen at (202) 512-7105. See appendix V for another GAO contact and staff acknowledgments. To obtain information on the number of pharmacies practicing on the Internet, we conducted searches of the World Wide Web and obtained a list of 235 Internet pharmacies that the National Association of Boards of Pharmacy (NABP) had identified by searching the Web and a list of 94 Internet pharmacies identified by staff of the House Committee on Commerce by searching the Web. After eliminating duplicate Web sites, we reviewed 296 potential sites between November and December 1999. Sites needed to meet two criteria to be included in our survey. First, they had to sell prescription drugs directly to consumers. Second, they had to be anchor sites (actual providers of services) and not portal sites (independent Web pages that connect to a provider). Most portal sites are paid a commission by anchor sites for displaying an advertisement or taking the user to the service provider’s site through a “click through.” We excluded 129 Web sites from our survey because they did not meet these criteria. See table 2 for details on our analysis of the Web sites that we excluded. In April 2000, we obtained a list of 326 Web sites that FDA identified during March 2000. We reviewed all the sites on FDA’s list and compared it to the list of Internet pharmacies we had previously compiled. We found 117 Internet pharmacies that duplicated pharmacies on our list. We also excluded 186 Web sites that did not meet our two criteria and added the remaining 23 Internet pharmacies to our list. To categorize Internet pharmacies, we analyzed information on the Web site to determine if the Internet pharmacy (1) required a prescription from the user’s physician to dispense a prescription drug, (2) in the absence of a prescription, required the user to complete an online questionnaire to obtain a prescription, or (3) dispensed prescription drugs without a prescription. We also collected data on the types of information available on each Internet pharmacy Web site, including information about the pharmacy’s licensure status, its mailing address and telephone number, and the cost of issuing a prescription. Using the domain name from the uniform resource locator, we performed online queries of Network Solutions, Inc. (one of the primary registrars for domain names) to obtain the name, address, and telephone number of the registrant of each Internet pharmacy. We then telephoned all U.S.-based Internet pharmacies to obtain information on the states in which they dispensed prescription drugs and the states in which they were licensed or registered. See table 3 for details on our licensure information inquiry. Finally, we clustered Internet pharmacies by state and asked the pharmacy boards in the 12 states—10 of these had the largest number of licensed/registered Internet pharmacies—to verify the licensure status of each pharmacy that told us it was licensed in the state. To assess state efforts to regulate Internet pharmacies and physicians prescribing over the Internet, we conducted two mail surveys in December 1999. To obtain information on state efforts to identify, monitor, and regulate Internet pharmacies, we surveyed pharmacy boards in all 50 states and the District Columbia. After making follow-up telephone calls, we received 50 surveys from the pharmacy boards in 49 states and the District Columbia, or 98 percent of those we surveyed. The survey and survey results are presented in appendix III. We also interviewed the executive directors and representatives of the state pharmacy boards in nine states— Alabama, Iowa, Maryland, New York, North Dakota, Oregon, Texas, Virginia, Washington—and the District of Columbia. In addition, we interviewed and obtained information from representatives of the NABP, the American Pharmaceutical Association, the National Association of Attorneys General, pharmaceutical manufacturers, as well as representatives of several Internet pharmacies. To obtain information on state efforts to oversee physician prescribing practices on the Internet, we surveyed the 62 medical boards and boards of osteopathy in the 50 states and the District of Columbia.After follow-up telephone calls, we received 45 surveys from the medical boards in 39 states, or 73 percent of those we surveyed. The survey and survey results are presented in appendix IV. We also interviewed officials with the medical boards in five states: California, Colorado, Maryland, Virginia, and Wisconsin. In addition, we interviewed and obtained information from representatives of the American Medical Association and the Federation of State Medical Boards (FSMB). To assess federal efforts to oversee pharmacies and physicians practicing on the Internet, we obtained information from officials from the Food and Drug Administration; the Federal Trade Commission; the Department of Justice, including the Drug Enforcement Administration; the U.S. Customs Service; and the U.S. Postal Service. We also reviewed the report of the President’s Working Group on Unlawful Conduct on the Internet. The availability of prescription drugs on the Internet has attracted the attention of several professional associations. As a result, over the past year, several associations have convened meetings of representatives of professional, regulatory, law enforcement, and private sector entities to discuss issues related to the practice of pharmacy and medicine on the Internet. We attended the May 1999 NABP annual conference, its September 1999 Executive Board meeting, and its November 1999 Internet Healthcare Summit 2000 to obtain information on the regulatory landscape for Internet pharmacy practice sites and the Verified Internet Pharmacy Practice Sites program. In January 2000, we attended a meeting convened by the FSMB of top officials from various government, medical, and public entities to discuss the efforts of state and federal agencies to regulate pharmacies and physicians practicing on the Internet. We also attended sessions of the March 2000 Symposium on Healthcare Internet and E- Commerce and the April 2000 Drug Information Association. We conducted our work from May 1999 through September 2000 in accordance with generally accepted government auditing standards. Neither in-state nor out-of-state physicians may prescribe to state residents without meeting the patient, even if the patient completes an online questionnaire. Internet exchange does not qualify as an initial medical examination, and no legitimate patient/physician relationship is established by it. Physicians prescribing a specific drug to residents without being licensed in the state may be criminally liable. Physicians prescribing on the Internet must follow standards of care. AG filed suit against four out-of-state online pharmacies for selling, prescribing, dispensing, and delivering prescription drugs without the pharmacies or physicians being licensed and with no physical examination. Referred one physician to the medical board in another state and obtained an injunction against a physician; the Kansas Board of Healing Arts also filed a lawsuit against a physician for the unauthorized practice of medicine. AG filed lawsuits against 10 online pharmacies and obtained restraining orders against the companies to stop them from doing business in Kansas; filed lawsuits against 7 companies and individuals selling prescription drugs over the Internet. Dispensing medication without physical examination represents conduct that is inconsistent with the prevailing and usually accepted standards of care and may be indicative of professional or medical incompetence. AG filed notices of intended action against 10 Internet pharmacies for illegally dispensing prescription drugs. Referred Internet pharmacy(ies) to AG for possible criminal prosecution. AG filed suit and obtained permanent injunctions against two online pharmacies and physicians for practicing without state licenses. Interviewed two physicians and suggested they stop prescribing over the Internet; they complied. AG filed suits charging nine Internet pharmacies with consumer fraud violations for selling prescription drugs over the Internet without a state license. Adopted regulations prohibiting physicians from prescribing or dispensing controlled substances or dangerous drugs to patients they have not examined and diagnosed in person; pharmacy board adopted rules for the sale of drugs online, requiring licensure or registration of pharmacy and disclosure. An Ohio doctor was indicted on 64 felony counts of selling dangerous drugs and drug trafficking over the Internet. The Medical Board may have his license revoked. AG filed lawsuits against three online companies and various pharmacies and physicians for practicing without proper licensing. The following individuals made important contributions to this report: John C. Hansen directed the work; Claude B. Hayeck collected information on federal efforts and, along with Darryl Joyce, surveyed state pharmacy boards; Renalyn A. Cuadro assisted in the surveys of Internet pharmacies and state medical boards; Susan Lawes guided survey development; Joan Vogel compiled and analyzed state pharmacy and medical board survey data; and Julian Klazkin served as attorney adviser. The first copy of each GAO report is free. Additional copies of reports are $2 each. A check or money order should be made out to the Superintendent of Documents. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Ordersbymail: U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Ordersbyvisiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Ordersbyphone: (202) 512-6000 fax: (202) 512-6061 TDD (202) 512-2537 Each day, GAO issues a list of newly available reports and testimony. 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Summary: The first Internet pharmacies began online service in early 1999. Public health officials are concerned about Internet pharmacies that do not adhere to state licensing requirements and standards. Public officials are also concerned about the validity of prescriptions and international drugs that are not approved in the United States being sent by mail. The unique qualities of the Internet pose new challenges for enforcing state pharmacy and medical practice laws because they allow pharmacies and physicians to reach consumers across state and international borders and remain anonymous. Congress is considering legislation to strengthen oversight of Internet pharmacies.