Copyright 2000 eMediaMillWorks, Inc.
(f/k/a Federal
Document Clearing House, Inc.)
Federal Document Clearing House
Congressional Testimony
May 24, 2000, Wednesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 11120 words
HEADLINE:
TESTIMONY May 24, 2000 WILLIAM K. HUBBARD SENIOR ASSOCIATE COMMISSIONER FOR
POLICY DEPARTMENT OF HEALTH & HUMAN SERVICES SENATE HEALTH,
EDUCATION, LABOR & PENSIONS GENE THERAPY
BODY:
DEPARTMENT OF HEALTH & HUMAN SERVICES Food and Drug Administration
STATEMENT OF WILLIAM K. HUBBARD SENIOR ASSOCIATE COMMISSIONER FOR POLICY,
MANNING AND LEGISLATION FOOD AND DRUG ADMINISTRATION BEFORE THE SUBCOMMITTEE ON
OVERSIGHT AND INVESTIGATIONS COMMITTEE ON C0MMERCE U.S. HOUSE OF REPRESENTATIVES
MAY 25, 2000 INTRODUCTION Mr. Chairman and Members of the Committee, I am
William K. Hubbard, Senior Associate Commissioner for Policy, Planning and
Legislation at the Food and Drug Administration (FDA or the Agency). I am
pleased to come before the Subcommittee to discuss with you the benefits and
risks of pharmaceutical sales over the Internet and what the Agency has been
doing to address these issues since your hearing last year. The sale of consumer
products over the Internet has grown rapidly, including the sale of drugs. The
growth in online drug sales by reputable pharmacies is a trend that can provide
significant benefits to consumers. on the other hand online drug sales also
present risks to purchasers and some unique challenges to regulators, law
enforcement officials and policy makers. FDA is concerned about the public
health implications of Internet drug sales, and we are responding to these
concerns as part of our overall goal of developing and implementing risk-based
strategies to protect public health and safety. Although other products
regulated by the Agency, such as medical devices, medical test products, foods,
dietary supplements and animal drugs also are sold online, this testimony will
focus on online drug sales. We will discuss the advantages and risks of online
drug sales, outline FDA's authority and enforcement activities in this area, and
describe new initiatives we are taking to better respond to the regulatory
challenges we face. In the context of prescription drug sales
over the Internet, the private sector has an important role to
play in promoting consumer education and in providing assurance to consumers
about the quality of products and services. our challenge is to make sure that
the same safety net that protects the consumer who purchases prescription drugs
at the corner store is just as strong when the click of a mouse is used to
purchase from a venue in cyberspace. Rapid technological developments have
changed the nature of the challenges we face today and we must be flexible in
developing solutions that are appropriate to meeting these challenges. As
electronic commerce embraces global markets, we should strive for consistent
principles across State, national, and international borders that promote safety
and efficacy, regardless of the jurisdiction in which a particular buyer or
seller resides. BENEFITS OF ONLINE DRUG SALES The use of the Internet by our
nation's citizens, from school age children to seniors, has opened up vast new
opportunities for the exchange of information and for enhancing commerce in all
types of consumer products. Electronic mail and chat groups have dramatically
facilitated communications. Information gathering that once took hours or days
of research, whether for a student's homework assignment or to look up
information on the medical condition of a family member, can now be accomplished
in minutes. The Internet is rapidly transforming the way we live, work, and shop
in all sectors of the economy. In the health sector, tele- medicine allows
people in remote areas to access the expertise of doctors in the nation's finest
academic health centers. The Internet permits an increasing number of
individuals to obtain a plethora of medical information that often helps them to
understand health issues and treatment options. In fact, more than 22 million
Americans used the Internet last year to find medical information, either in
documentary resources or through online discussions with health professionals.
According to Investor Business Daily, 43 percent of web surfers access health
care data online each year. Conducting research regarding their health concerns
is the sixth most common reason that people use the Internet, and according to
the market research firm, Cyber Dialogue Inc. The number of persons accessing
health care data is growing by 70 percent a year. Prescription
drug sales on the Internet can provide tremendous benefits to
consumers. These benefits are many and include: access to drugs for the disabled
or otherwise home-bound, for whom a trip to the pharmacy can be difficult; the
convenience of shopping 24 hours a day; an almost unlimited number of products
for customers; and privacy for those who don't want to discuss their medical
condition in a public place. Hyperlinks and search programs provide online
customers with written product information and references to other sources of
information much more easily than in the traditional storefront. Finally, as the
use of computer technology to transmit prescriptions from doctors to pharmacies
expands, a reduction in prescription errors may be possible. While online
pharmaceutical sales will be important for some customers, it must be noted that
the traditional "brick and mortar" pharmacy offers benefits or services that are
often not available through the Internet, such as immediate
access to prescription drugs needed for immediate treatment.
These pharmacies will undoubtedly remain an essential component in the delivery
of effective health care. The challenge for government at both the State and
Federal level is to pursue policies that will allow legitimate electronic
commerce to flourish but provide that safety is assured. Consumers will have
confidence in the quality of the medical prescription and in the medicine
delivered because the protection for online consumers is equivalent to the
safeguards of the traditional local pharmacy and the practice of medicine and
pharmacy. CONCERNS ABOUT ONLINE SALES As beneficial as this new technology can
be, the Internet also creates a new marketplace for activity that is already
illegal, such as the sale of unapproved new drugs, prescription drugs dispensed
without a valid prescription, or products marketed with fraudulent health
claims. As FDA considers the issues related to online drug sales, we recognize
that there are various types of websites used for drug sales. Many sites focus
on selling prescription drugs and have been referred to by some
as "Internet pharmacies." These sites offer for sale either
FDA-approved prescription drug products, or in some cases,
unapproved, illegal versions of prescription drugs. The sales sites of
legitimate, properly licensed pharmacies provide benefits to consumers, however,
those that are unlicensed or otherwise engaged in the illegal dispensing of
prescription drugs pose a serious threat to the health and safety of American
citizens. Other drug sales sites offer for sale unapproved drug products,
products making fraudulent health claims, or drugs for recreational use.
Examples of these sites are those that sell products containing gamma hydroxy
butyrate (GHB), an unapproved drug used recreationally, for body building and
for incapacitating the victims of sexual assaults, or sites that offer unproven
cancer therapies. It should be noted that with regard to GHB, early this year
the President signed legislation, which originated in this subcommittee, placing
GHB in Schedule 1 of the Controlled Substances Act. While the increase in
"Internet pharmacy" sites engaged in illegal sales is seen by some as a
particularly potent threat, FDA believes that the non-pharmacy sites are
harmful, or in some cases more so, and we have moved aggressively against those
that operate unlawfully. The unique qualities of the Internet, including its
broad reach, relative anonymity, and ease of creating new websites or removing
old ones, pose new challenges for the enforcement of existing laws. FDA has
found that most drug sale websites are actually made up of multiple related
sites and links, thereby making investigations much more complex and resource
intensive.' The global nature of the Internet creates particular problems for
effective law enforcement. Different approaches to drug approval and marketing
in foreign countries further complicate law enforcement issues for United
States, (U.S.) officials. FDA and other U.S. government agencies need to work
closely with foreign governments to share information and to develop mechanisms
for cooperative law enforcement. FDA Authority As you know, the establishment of
FDA as it exists today grew out of a time early in the century when consumers
were victimized by dishonest purveyors of fraudulent potions and compounds that
were ineffective, dangerous, or both. A system of drug regulation was
established in this country that has served us well. Under this system, FDA
reviews new drugs to assess their safety and efficacy. In addition, certain
types of drugs must be prescribed and dispensed only by licensed health care
professionals. The prescribing requirement is based on the principle that
certain drugs have risks of such significance associated with them that they
should be administered only under the supervision and recommendation of a
"learned intermediary" -- that is, a licensed practitioner with the education
and training necessary to oversee the administration of potentially harmful drug
products. Similarly, these products may only be dispensed by a licensed
professional that can help to assure proper dosing and administration and can
provide important information on the drug's use to patients. These requirements
are crucial components of the risk management system for drugs in the U.S. The
types of unlawful conduct involving online drug sales that FDA has identified
are similar to unlawful activities that occur in other sales contexts. Under the
Federal Food, Drug, and Cosmetic (FD&C) Act, FDA has the legal authority to
take action against: - the importation, sale, or distribution of an adulterated
or misbranded drug; - the importation, sale, or distribution of an unapproved
new drug; - illegal promotion of a drug; - the sale or dispensing of a
prescription drug without a valid -
prescription; and, counterfeit drugs. When the
Internet is used for an illegal sale, FDA, working with the
Department of Justice (DOJ), must establish the same elements of a case, develop
the same charges, and take the same actions as it would if another medium, such
as a storefront or a magazine, had been used. FDA has investigated and referred
cases for criminal prosecution and initiated civil enforcement actions against
online sellers of drugs and other FDA-regulated products, particularly sellers
of drugs not approved by the Agency. As will be described later, FDA has
significantly expanded its enforcement activities during this past year with
regard to online drug sales. State Regulation of Practice of Medicine, Pharmacy
and Dispensing of Drugs The States have enacted laws regulating the practice of
pharmacy and the practice of medicine in order to protect patients from harm
resulting from the use of unsafe drugs, counterfeit drugs, and the improper
practice of medicine and pharmacy. Under many of these laws, to receive a
prescription drug for the first time, a patient generally must be physically
examined by a licensed health care practitioner who determines the appropriate
treatment and issues a prescription for an FDA- approved drug. The patient then
has the prescription filled by a registered pharmacist working in a licensed
pharmacy that meets state practice standards. Use of the Internet to Bypass the
Regulatory System Even with these Federal and State systems in place, there are
those who try to circumvent established safeguards, and the Internet provides
them with new opportunities for doing so. It is fair to say that the speed and
ease of ordering products on the Internet that attracts consumers can likewise
entice unscrupulous sellers to use the Internet as their new
medium of choice. Individuals not licensed to sell prescription
drugs can easily create websites that appear to represent legitimate pharmacies.
The fact that operators can easily change the location and appearance of their
Internet sites makes enforcement all the more difficult. Unlike most other forms
of electronic commerce, the unauthorized sale of prescription and unapproved
drugs poses a potential threat to the health and safety of consumers. Patients
who buy prescription drugs from an illegitimate site are at risk of suffering
adverse events, some of which can be life threatening. These risks include
potential side effects from inappropriately prescribed medications, dangerous
drug interactions or contaminated drugs, as well as the possible ill effects of
impure or unknown ingredients found in drugs manufactured under substandard
conditions. Further risk to patients is posed by their inability to know what
they are really getting when they buy some of these drugs. Although some
patients may be purchasing genuine product, some may unknowingly be buying
counterfeit copies that contain inert ingredients, outdated legitimate drugs
that have been diverted to illegitimate resellers, or dangerous sub-potent or
super- potent versions that were improperly manufactured. Moreover, consumers
who are desperate for a cure to a serious medical problem may be more
susceptible to purchasing an unapproved product. FDA is concerned about the
proliferation of sites that substitute a simple online questionnaire for a
face-to-face examination and patient supervision by a health care practitioner.
According to the American Medical Association, a health care practitioner who
offers a prescription for a patient they have never seen before, based solely on
an online questionnaire, generally does not meet the appropriate medical
standard of care. Just last month, the Federation of State Medical Boards
received the report of its Special Committee on Professional Conduct and Ethics,
which found that "Prescribing of medications by physicians based solely on an
electronic medical questionnaire clearly fails to meet an acceptable standard of
care and is outside the bounds of professional conduct." This finding is
especially important in light of the primary responsibility of States in
regulating the practice of medicine. Additionally, FDA is concerned that the use
of such questionnaires may jeopardize the privacy of a patient's medical
records. We will continue to play a role in the Administration's efforts with
the private sector to implement appropriate protections for patient's medical
information. We also will continue to distinguish legitimate online
communications from unlawful conduct that increases patient risk. The Agency is
equally concerned that in some Internet transactions, there is an apparent
absence of any health professional/patient relationship. This is a particular
concern where the prescription involves a first-time use by a patient or where
the patient may be taking other medications. FDA is concerned that the selection
of prescription drug products or treatment regimens for a particular patient
should be made with the advice of a licensed health care practitioner familiar
with the patient's current health status and past medical history. In situations
where a customary physician- patient relationship does not exist, the patient
may be essentially practicing self-diagnosis. Consequently, the risk of negative
outcomes such as harmful drug interactions, contraindications, allergic
reactions or improper dosing is greatly magnified. Jurisdictional Issues In
addition to magnifying existing problems by reaching potentially millions of
consumers worldwide, online drug sales create unique issues for regulatory and
law enforcement bodies at the State, Federal and international level. Internet
technology can obscure the source of the product as well as provide some degree
of anonymity to persons responsible for making and shipping the product. The
participants in a transaction can be widely dispersed geographically (in
different States or countries) and they may never meet. Thus, the regulatory
issues cross traditional regulatory boundaries as well as Federal and State
jurisdictional lines. If one or more participants in the transaction are located
outside of the U.S., the task of regulating the activity is further complicated.
The sale of drugs to U.S. residents via foreign websites is an extremely
challenging area. Some medications sold on the Internet may be legal in foreign
countries but not approved for use in the U.S., and some products may include
addictive and dangerous substances. Products not approved for sale in the U.S.
often do not conform to the good manufacturing practice and quality assurance
procedures required by U.S. laws and regulations, and it is illegal for a
foreign pharmacy to ship such drugs into the U.S. Foreign sales pose the most
difficult challenge for U.S. law enforcement because the seller is not within
U.S. boundaries. Although FDA has jurisdiction over a resident in a foreign
country who sells to a U.S. resident in violation of the FD&C Act, from a
practical standpoint, the Agency is hard pressed to enforce the law against
foreign sellers. FDA confronts the same obstacles facing other U.S. regulatory
and law enforcement agencies seeking to hold foreign actors accountable for
violations of Federal law. FDA efforts are mostly limited to requesting the
foreign government to take action against the seller of the product, or asking
the U.S. Customs Service (USCS or Customs) to stop the imported drug at a U.S.
port-of-entry. Foreign governments are also struggling with how to address the
problem of illegal drug sales over the Internet. For instance, pharmaceutical
industry officials in Italy are recommending that the issue be addressed by the
European Community as a whole. The New Zealand Health Ministry has begun to look
at options to prevent pharmaceuticals from being dispensed from New Zealand to
overseas consumers without a prescription, after a court decision revealed a
loophole that prevents regulators from preventing the practice. FDA's INTERNET
DRUG SALES ACTION PLAN Over the past several years, FDA has sharpened its focus
on the issue of Internet promotion and sale of drugs as online activity has
expanded. In the fall of 1996, FDA held a public meeting on the use of the
Internet to promote drug products at which we heard from consumers and health
professionals on this emerging issue. In February 1999, the Agency hosted a
meeting with representatives of health professional organizations to look at the
prescribing and dispensing of drugs on the Internet. In July 1999, FDA adopted,
and has since been implementing, an Internet Drug Sales Action Plan to expand
and improve the activities of the Agency in addressing the unlawful sale of
drugs over the Internet. This plan is based on internal deliberations, meetings
with Federal and State regulatory and law enforcement bodies, as well as
organizations representing consumers, health care practitioners, and the
pharmaceutical and pharmacy industries. Details of the action plan's elements
and FDA's activities in implementing them are as follows. Engage in Public
Outreach At a minimum, every drug sale involves at least a purchaser and a
seller. Consumers buy drugs on the Internet for different reasons, and some may
be targets of unscrupulous business practices, such as the selling of unsafe,
unapproved, expired, counterfeit or otherwise illegal drugs. Public outreach
offers one mechanism by which the Agency can help protect consumers from
dangerous or inappropriate drugs. FDA is expanding its public outreach to inform
the public about dangerous practices involving Internet purchases and to explain
what compliance and enforcement actions we already have taken. This outreach
effort includes FDA Talk Papers; articles in the FDA Consumer Magazine; and
information on FDA's website to help educate consumers about safely purchasing
drugs online and provide consumers with an opportunity to submit to the Agency
information on sites that may be violative. This year, FDA has launched a new
media campaign about safe ways to purchase pharmaceutical products over the
Internet. The campaign includes placing advertisements on health related
websites; taping public service announcements for distribution to television and
radio stations nationwide; and developing a "safety checklist" to be posted
online and distributed through health care providers and consumer advocacy
organizations. T he- Agency will keep working with consumer groups, health care
practitioner organizations, and industry to encourage these parties to keep
their constituents and the public informed about safe practices for purchasing
drugs online. Engage in Professional Outreach and Partnering At the February
1999 meeting with health professional organizations, FDA, the Federation of
State Medical Boards of the United States, the National Association of Boards of
Pharmacy (NABP), the American Medical Association and the Association of Food
and Drug Officials discussed the roles that each organization plays in
regulating prescribing and dispensing on the Internet and how the various roles
could better compliment each other. At that meeting, the NABP announced its
program to verify the legitimacy of Internet sites dispensing
prescription drugs. The program, known as the verified Interne
t Pharmacy Practice Sites, or VIPPS, provides a NABP "seal of approval" to sites
meeting State licensure requirements and NABP's standards. Over time, this seal
of approval may help to assure consumers that the designated sites are offering
FDA approved pharmaceuticals. The VIPPS program is voluntary. FDA continues to
meet with organizations representing State regulatory and law enforcement
bodies, consumers, health care practitioners and industry. The purpose of these
meetings are to gather information on: 1) how issues relating to online drug
sales should be addressed, 2) who should regulate and how they should regulate;
3) whether and what changes to the current law should be enacted; and 4) when to
develop partnering arrangements. These organizations include: - the National
Association of Boards of Pharmacy, - the Federation of State Medical Boards, -
the National Association of Attorneys General, - the American Medical
Association, - the American Pharmaceutical Association, - the American
Association of Retired Persons, - the National Consumers League, - the American
Society of Health-Systems Pharmacists, - the National Association of Chain Drug
Stores, - the National Community Pharmacists Association, and, - the
Pharmaceutical Research and Manufacturers Association. Coordinate Activities
with other State and Federal Agencies Several Federal agencies, as well as the
States, have the authority to regulate and/or enforce U.S. laws related to the
sale of drug products online. Due to the growth of potential cases involving the
Internet, there are instances when working with another agency or State could
result in a more effective enforcement action. Working closely with the States
is essential to effectively regulate the domestic sale of both approved and
unapproved drugs, as well as the sale of prescription drugs
without a valid prescription over the
Internet. FDA has established partnership agreements with
several State bodies, including the National Association of Boards of Pharmacies
and the Federation of State Medical Boards, to coordinate Federal and State
activities aimed at questionable practices associated with the selling and
prescribing of prescription drugs. Additionally, we are talking with the
National Association of Attorneys General about a possible agreement. FDA has
increased its coordination of efforts with other governmental bodies and has met
several times over the past year with Federal agencies and State officials to
share information, discuss the roles and responsibilities of the parties
regarding online drug sales and identify opportunities for partnering in
enforcement actions. FDA has established cooperative working relationships with
the Department of Justice (DOJ), including the Drug Enforcement Administration
(DEA) and Federal Bureau of Investigation (FBI), the U.S. Postal Inspection
Service, USCS and other appropriate Federal and State law enforcement and
regulatory agencies. FDA believes an important area where cooperation among
federal agencies is critical is the sale of drugs to U.S. residents by foreign
sellers. The USCS, the U.S. Postal Service, FDA, and the DEA all play important
roles in taking action against the illegal importation of drugs. Generally,
determinations of when and with whom FDA would engage in joint enforcement is
based on the kinds and severity of violative conduct identified through Internet
monitoring. Although FDA is expanding its own Internet monitoring capabilities,
the Agency also is developing partnerships in this area with other agencies. In
addition, FDA was a participant in the Administration's Working Group on
Unlawful Conduct on the Internet, which issued its report to the President this
past March. In its analysis of the problems associated with online drug sales,
the report calls for legislation requiring online pharmacies to disclose certain
information to consumers and for a system of assurance that they comply with
appropriate Federal and State requirements. Cooperate Internationally Because
FDA and the other Federal agencies possess limited investigatory jurisdiction
over sellers in foreign countries, we must work with foreign governments to
bring action against such individuals. Internet crime and the practice of online
pharmacy are a growing concern throughout the international law enforcement
community. FDA's Office of Criminal Investigations (OCI), maintains ongoing
liaison with numerous government agencies in Canada, the United Kingdom, Spain,
Germany, Belgium, the Netherlands, Ireland, Brazil, Singapore and others. An
example of this cooperation involved OCI contact with authorities in a Pacific
Rim country where a website operator alleged that he used the services of two
legitimate doctors to review his online questionnaire. Through our foreign
counterparts, we were able to have the doctors interviewed. Both denied any
involvement in the scheme, thus exposing the operator to possible mail and wire
fraud or other charges. In another case, OCI made an undercover purchase of
drugs from a site operating out of a European country. The site made no pretense
of a medical review. OCI was looking for a domestic connection for charges in
the U.S. While none was found, our contacts with the health authorities in that
country resulted in their initiation of an criminal investigation. Finally, OCI
is involved in two cases with USCS overseas offices regarding foreign websites
selling prescription and controlled pharmaceuticals. Enforcement activity by
Customs resulted in numerous arrests and the seizure of over 1.5 million pills
and several computers. Customize and Expand Enforcement Activity FDA's emerging
role in regulating online drug sales is consistent with its traditional
regulatory role. Existing approaches to enforcement, including close cooperation
with State agencies, are being adapted to focus more effectively on the problems
posed by online drug sales. An effective Internet enforcement process requires
establishing priorities, identifying and monitoring potentially violative
websites and making appropriate referrals for criminal prosecution and/or civil
enforcement actions. FDA is enhancing its enforcement efforts by undertaking the
following actions: - Establishing Priorities -- FDA has initially focused its
online drug sales-related enforcement activities to the following areas,
particularly where there is a significant public health risk:1 - Unapproved new
drugs, - Health fraud, and Prescription drugs sold without a valid
prescription. Improving Data Acquisition -- FDA has increased
its capability to monitor the Internet and identify potentially
violative sites through the use of various search tools and by upgrading its
data handling capabilities. This is helping the Agency to better understand the
kind and extent of unlawful conduct on the Internet and to more accurately
assess whether its enforcement efforts have had an impact on illegal Internet
behavior. In an attempt to better comprehend the universe of websites selling
drugs, OCI reviewed thousands of websites early this year and identified
approximately 326 websites involved in the sale of drug products. This review
was based on a search of websites performed by Internet search software, which
was followed by a manual review of sites that appeared to involve 1. A
significant public health risk exists when a consumer is at risk for harm (1)
from the use of the product, (2) as the result of not taking approved drugs for
a specific disease or condition, or (3) by delaying medical treatment recognized
as safe and effective for a specific disease or condition. the sale of drug
products. Because new websites are put up everyday and old ones are taken down,
the total number of these sites is subject to change and will not be consistent
over time. Additionally, because OCI's technology and methodology probably
differs from those used in studies by other organizations, the results of this
study are not directly comparable to other studies. Coordinating Case Assessment
-- In June 1999, FDA established a case assessment, or "triage" team with
representatives from the office of Enforcement and OCI within the Office of
Regulatory Affairs (ORA), the Center for Drug Evaluation and Research (CDER),
the Office of the Chief Counsel (OCC) and the Office of Policy. Under the triage
process, FDA obtains leads on potentially violative sites from internal Internet
monitoring activity, State, other Federal or foreign law enforcement agencies,
consumers, Congress, and the press. The triage team evaluates the leads and
decides whether they should initially be pursued through a civil or criminal
investigation. Priority is given to cases involving unapproved new drugs, health
fraud, prescription drugs sold without a valid prescription and products with
the potential for causing serious or life- threatening reactions. The triage
team makes referrals, when appropriate, to FDA's civil and criminal enforcement
units for follow-up. The triage process results in a better coordination of
criminal and civil enforcement actions at the appropriate Agency components and
reduces overlapping effort. This process better ensures that decisions are made
in a timely way, with an appropriate balance in terms of achieving a maximum
deterrent effect while taking action, if needed, to remove harmful products from
the market. The team will continue to oversee Internet- related enforcement
activities while they are being investigated and will ensure that they are
brought to appropriate completion. In addition, the scope of this group is being
broadened to include all FDA-regulated products. Enhancing Enforcement Resources
-- In general, FDA's investigative and enforcement activity regarding Internet
drug sales has been accomplished by re-deploying FDA personnel, which
necessarily results in a reduction of investigation and enforcement activity in
other areas. The Agency has drawn from existing resources to increase its
current enforcement efforts because we believe that illegal online drug sales
pose a significant public health risk. As explained in more detail later, the
President has requested $10 million in additional funding for Internet
enforcement activities in the Fiscal Year (FY) 2001 budget. Results to Date --
Using information generated by Internet searches, as well as leads from all
parts of the Agency, other State and Federal law enforcement units, and the
public, FDA has performed at least cursory reviews of thousands of websites
related to drug sales. FDA (the offices of ORA, CDER Compliance, OCC and OCI)
has evaluated well over 400 websites for possible regulatory or criminal action
and has taken enforcement action on many of those sites, as follows: Currently,
FDA has 54 sites under active review for possible regulatory or civil action.
Regulatory action has been taken on more than 50 sites as follows. Thirty-eight
(38) warning letters have been sent by the Office of Compliance to domestic
online sellers. A warning letter is a written communication from FDA notifying
an individual or firm that the Agency considersone or more products, practices,
processes, or other activities to be in violation of the FD&C Act, or other
relevant statutes, and that failure of the responsible party to take appropriate
and prompt action to correct and prevent any future repeat of the violation may
result in administrative and/or regulatory enforcement action without further
notice. Additionally, OCC has sent seventeen (17) "cyber letters" to operators
of foreign-based Internet sites offering to sell online
prescription drugs. These sites may be engaged in illegal
activity such as offering to sell prescription drugs to U.S. citizens without
valid (or in some cases without any) prescriptions. Cyber
letters, which are sent over the Internet to the suspect
websites, warn these operators that they may be engaged in illegal activities,
and informs them of the laws that govern prescription drug sales in the U.S. FDA
has received seven responses from "cyber" letter recipients and FDA is
continuing to monitor these sites. Other civil and regulatory actions include
the following. In cooperation with DOJ, two preliminary injunctions have been
imposed on the sale of a illegal products -- one marketed as a weight-loss aid
that contains a potent thyroid hormone, which could cause heart attacks or
strokes, and the other an unapproved cancer therapy. FDA and DOJ are pursuing an
additional injunction against the sale of another unapproved cancer therapy over
the Internet. Additionally, twelve (12) product seizures, eleven (11) product
recalls, and the voluntary destruction of eighteen (18) violative products have
been achieved, generally pertaining to unapproved new drug products including
GHB, gamma butyrolactone (GBL), Triax, 1,4 butanediol, and laetrile. Seventeen
(17) import alerts have been issued targeting products offered by foreign online
drug sellers. OCI, working with OCC, is responsible for investigations of
pharmacy sites and other Internet drug sites whose operations involve potential
criminal activity. The information collected by OCI headquarters is analyzed by
the Investigative Analysis Branch. After the suspect sites are researched they
are sent to the OCI field offices for investigative work, which often includes
undercover buys. Further investigation determines the bona fides of the pharmacy
and doctor(s), and looks at the relationship between the patient and doctor and
the doctor and pharmacy. OCI has ongoing cooperative relationships with the
USCS, DEA, FBI, the Postal Inspection Service and appropriate State law
enforcement and regulatory agencies, and this has enhanced their investigative
capabilities with regard to Internet drug sales. Currently, OCI has 132 Internet
related investigations underway, including 86 open criminal investigations and
46 preliminary investigations. Of these 132 investigations, 49 cases are
investigations of sites selling prescription drugs, while 83 cases are related
to various types of health fraud, or unapproved drug products such as GHB or
other illegal drug sales. Forty- three (43) arrests and twenty-two (22)
convictions have resulted from OCI investigations involving products being sold
over the Internet. THE ADMINISTRATION'S FISCAL YEAR 2001 BUDGET REQUEST AND
PROPOSED INITIATIVE On December 28, 1999, the Administration announced a new
initiative to protect consumers from the illegal sale of pharmaceuticals over
the Internet. The initiative includes a $10 million request in the President's
FY 2001 budget to enhance FDA's enforcement capabilities, and called for
legislation to help ensure that Internet pharmacies comply with State and
Federal laws. Budget Request The Administration's FY 2001 budget request
contains a new $10 million investment to take action against those who engage in
illegal drug sales over the Internet. The funding would be used
to identify, investigate, and prosecute operators of websites selling
prescription drugs without a valid prescription, unapproved new
drugs, counterfeit drugs, and expired or illegally diverted pharmaceuticals.
This funding initiative will also help crack down on the marketing of products
based on fraudulent health claims. The $10 million appropriation would be used
primarily to sustain the number of investigative and enforcement personnel' we
are currently investing in this area. FDA will continue to employ Internet
hardware and software to identify suspect websites, and will use the additional
personnel resources to investigate and take enforcement action against the
operators of these sites. To date, FDA's enforcement activity on Internet drug
sales has been accomplished by re-deployment of existing personnel resources,
which necessarily results in a reduction of investigations in other areas.
Enactment of the $10 million request would allow FDA to re- direct its currently
re-deployed resources back to other enforcement priorities and establish a
significant, permanent presence on Internet pharmacy enforcement. In addition,
the requested funding would help FDA step up efforts to educate consumers about
the risks involved online and what types of sites or practices they should
avoid. Drugs marketed and sold illegally over the Internet present real risks
for the American consumer. Enforcement activities targeting these sites have
been made a budget priority for FY 2001. LEGISLATIVE PROPOSAL On May 2, 2000,
Secretary Shalala sent to Congress the Administration's proposed legislation,
the "Internet Prescription Drug Sales Act of 2000". The
Administration's objective in developing this legislation is to protect the
health of consumers by providing them with a level of protection equivalent to
that enjoyed by customers of traditional "brick and mortar" pharmacies without
hindering the enormous potential benefit of the Internet. We see this proposal
as a first step in the process of developing appropriate protections for online
consumers of drugs, and we look forward to working with the members of this
subcommittee and others in the Congress on this important matter. The bill is
also designed to enhance the effectiveness of the Federal-State partnership in
regulating prescription drugs and recognize the importance of the States,
traditional role in regulating the practice of medicine and pharmacy.
Accordingly, the bill would support and strengthen the States' authority to
enforce applicable laws within their borders, while providing enhanced Federal
authority to monitor the multi-state and interstate aspects of Internet
prescription drug sales. By filling gaps in Federal and State
authority, the bill seeks to curb illegal sales of prescription drugs and to
ensure that consumers are receiving safe and effective drugs prescribed by
licensed health care professionals, and dispensed by pharmacies that are
properly licensed, and in compliance with, all applicable State and Federal
laws. Specifically, the bill would require online pharmacies to be licensed in
each State in which they operate or to which they deliver prescription drugs.
They would have to comply with all applicable Federal and State laws governing
the practice of pharmacy which include, among others, requirements for proper
storage and handling of prescription drugs, record keeping, and other consumer
protections including safeguards on patient privacy and confidentiality of
medical records. The online pharmacy would be required to provide to the
Secretary and relevant State boards of pharmacy, prior to launching an online
site, a notification containing the information required to be posted on the
site and assurances of compliance with the requirements of the bill. The online
pharmacy also would be required to post on its website a declaration that this
notification has been made and to post information about the business, including
the name of the pharmacy as it appears on its State license(s), the street
address of its principal place of business, the name and licensing information
of the pharmacist in charge, and a phone number where consumers can contact a
pharmacist with questions or concerns. If the online pharmacy failed to comply
with any requirement, the Secretary, after providing notice and an opportunity
for a hearing, could prohibit the pharmacy from displaying the declaration.
Violators would be subject to substantial civil money penalties. Finally, States
would be authorized to bring civil actions against online pharmacies for
violations of these requirements. This bill would fill gaps in current consumer
protection and enforcement authority. The compliance and disclosure requirements
for online pharmacies would afford substantial public health benefits and
provide enhanced tools for law enforcement. Legitimate online pharmacies could
be much more easily distinguished from illegal online pharmacies. Consequently,
enactment of this bill would enhance consumer safety and confidence in the
Internet, and level the playing field for legitimate online pharmacies by
reducing illegal competition. CONCLUSION Mr. Chairman, online shopping for
pharmaceutical products clearly provides many benefits for consumers, however,
it also has a number of significant risks. Additionally, the nature of Internet
technology presents law enforcement and policy makers with unique challenges.
FDA is grappling with the challenges posed by online drug sales and with our
need to carefully balance consumer access to information and products with
protecting the public health. We are adapting our compliance and enforcement
techniques to the new electronic marketplace and we will continue to evaluate
what changes in our procedures, regulations, or the law might be appropriate. We
want to ensure, as much as possible, that the protections afforded to consumers
who purchase drugs from their corner drugstore are extended to consumers in the
electronic marketplace. We look forward to working further with Congress on this
important issue, and I would be happy to answer any questions you may have.
LOAD-DATE: June 2, 2000, Friday