Copyright 2000 Federal News Service, Inc.
Federal News Service
May 25, 2000, Thursday
SECTION: PREPARED TESTIMONY
LENGTH: 2608 words
HEADLINE:
PREPARED TESTIMONY OF CARLA J. STOVALL KANSAS ATTORNEY GENERAL
BEFORE THE HOUSE COMMITTEE ON COMMERCE SUBCOMMITTEE ON
OVERSIGHT AND INVESTIGATIONS
BODY:
Chairman
Upton, Ranking Member Klink, members of the Subcommittee, thank you for the
invitation to testify today on the important issues the Subcommittee is
considering.
Beginning with Kansas' lawsuit in February, 1999, six
States have filed a total of 18 lawsuits, eight administrative actions, and nine
notices of intended action against more than 54 individuals, pharmacists,
pharmacies, doctors, and other entities who participated in the online
prescribing, sale and dispensing of prescription drugs to our States' citizens.
None of them required any in-person examination or consultation prior to
prescribing and dispensing those drugs, using instead the "online application"
method.
Ohio has criminally indicted a doctor for drug trafficking as a
result of this practice, and his trial is scheduled for June 12, 2000. That same
doctor is also being pursued civilly by at least three other States, and he has
filed his own civil suit against the State of Ohio. Approximately fifteen
additional States are investigating sites with a review toward litigation,
investigations which are not yet public.
In most of the Kansas cases, we
are in the process of negotiating settlements, with provisions not to engage in
the practice of online prescribing and to comply with the laws and regulations
of our State before dispensing drugs to our citizens. We have settled with one
defendant, and have filed an action requesting the court enforce the settlement
agreed upon in another case.
Most of the entities sued by the States are
in the process of negotiating settlements, but a few continue to hide from us.
It is worth noting one case where the Defendants are not only not hiding,they
are actively pursuing the State. Attorney General Jennifer Granholm of Michigan
has been sued in the Federal District Court in Virginia by one of the Defendants
in a case that she filed earlier this year. The Defendants are claiming the
Michigan Attorney General has, among other things, unreasonably burdened
interstate commerce by requiting pharmacies and pharmacists to be licensed in
Michigan before they distribute the drugs in Michigan. That case has not yet
been docketed for hearing.
In general, however, most websites sued or
notified by the States are voluntarily not shipping to consumers in all States
that have brought action against any site. Additionally, the publicity from
these actions has helped boost our consumer education campaigns regarding the
dangers of buying prescription drugs from sites that sell without the benefit of
a valid prescription. There is no way to confirm the number of sites offering
drugs for sale in this manner has changed, however, we know several of the sites
that have been sued have gone out of business, and many of the doctors have
ceased practicing in this dangerous manner.
I have submitted with my
testimony a summary of the cases filed by the States - and legislation proposed
in State legislatures. I ask that this summary be included in the hearing
record.
In each of these cases, it is clear our law enforcement actions
are aimed at stopping the illegal Internet sale of drugs to our citizens - more
appropriately named "online prescribing." We are not interested in shutting down
websites operating in compliance with all licensing and registration laws and
regulations in the State to where they dispense the medication. We certainly
have no problem with the legitimate pharmacies that utilize the
Internet as an effective mode of communication with their
patients."Online pharmacies" should not be treated differently
than traditional, "brick and mortar" pharmacies. The standards should be the
same. If a pharmacy wants to transact business in a certain State, then it
should submit to the laws and regulations of that State.
That is the
basic theory of our cases: by prescribing drugs to citizens in our States, the
pharmacy, pharmacist, prescribing physician and website are practicing and
operating within our States' jurisdiction and are subject to our States' laws.
If they do not have the legal authority to dispense these drugs, they are
breaking our laws.
All the Defendants in the lawsuits filed by the
States have one thing in common - they did not require a valid physician-patient
relationship to prescribe and to dispense prescription-only drugs. These
Defendants merely asked their customers to fill out a questionnaire about their
health and claimed that a physician would review the application and prescribe
the drug if appropriate. In all of our cases, however, it was apparent that if a
physician reviewed the application, it was a reckless review indeed. A
16-year-old boy in Kansas ordered and received Viagra, a medication for erectile
dysfunction, as well as Meridia and Phentermine, both controlled substances,
even though he entered his true date of birth on the online order applications.
No company asked for parental consent before sending drugs to that minor. The
ease with which these drugs, especially the controlled substances, were
distributed without an exam, without even a conversation with the recipient, is
shocking and should be terrifying to those invested in public health - and
especially as children's access to these drugs is unfettered.
Additionally, we have found many more problems than just the licensing
issues. These sites use unconscionable tactics to lure consumers and to mislead
them about the drugs they are buying and their rights in the transaction. For
example, many of these sites require the consumer to accept a waiver before they
will ship the medication. These waivers purport to exonerate the physician who
writes the prescription, the pharmacy that fills it, and the website and its
operators who coordinate the transaction from all liability. The violations of
State consumer protection laws the States have seen are too numerous for me to
list here. Requiring a licensure verification will not erase all the problems
inherent in the "rogue online pharmacy" industry.
The National
Association of Attorneys General (NAAG) is coordinating a united effort among
the States to combat these problems, and that has served all of our citizens
well. NAAG has established the Online Pharmacy Working Group to
address the issues surrounding Internet pharmacies, and I am
proud to say that Kansas has led the effort. The group has accomplished a great
deal by implementing simple, cost- effective ideas which allow the most
expedient action to be taken. For example, the members of the group have
established a procedure to notify the State medical board where a defendant
doctor is licensed or the board of pharmacy where a defendant pharmacy is
located after a lawsuit is filed. Each State licensing entity can use the
information to conduct its own investigation, if appropriate, and take any
action it deems necessary, which can result in license suspension.
As a
direct result of this interstate cooperation, the State of Washington summarily
suspended one doctor's license to practice medicine. This Washington doctor
prescribed Viagra to a 16-year-old boy in Kansas, without ever seeing or talking
to him. This boy was truthful about his age in his "online questionnaire," yet
that doctor prescribed and the company dispensed and shipped the drug directly
to his home. My office coordinated with Attorney General Gregoire's office, and
not only were we able to enjoin this company from selling to Kansans, the State
of Washington was able to prevent him from prescribing to anyone online, pending
the outcome of their licensing action.
A carefully organized and unified
campaign of both State and Federal resources will be the most effective way to
attack this dangerous practice of dispensing potentially dangerous drugs without
a valid prescription. Kansas can't stop this practice alone, nor can Illinois,
Missouri, or Michigan. But all States working together with the Federal
government can make the cost of operating illegal online pharmacies so high as
to price the bad actors out of this business.
Efforts in the direction
of State and Federal coordination have already begun. On its March conference
call, the NAAG Online Pharmacy Working Group included representatives from
several Federal agencies, including the Department of Justice, Food and Drug
Administration, and the Federal Trade Commission. The cooperative relationships
that have developed between the States and between the State and Federal
representatives as a result of this group have been extremely productive.
At the most recent annual meeting of The National Association of
Attorneys General, my colleagues and I adopted a resolution calling for
cooperative federalism in addressing Internet issues. A copy of that resolution
is attached and I ask that it be incorporated into the record for this hearing.
As applied to online pharmacies, we have two substantive recommendations
for any federal proposal:First, respect the States' historical role in setting
substantive requirements for the regulation of doctors and pharmacies that
operate within our borders. States are the primary enforcers of laws relating to
the health of their citizens, and we should continue that tradition in this
important issue.
Second, the most important tool the Federal government
can give the States is nationwide injunctive relief. Several States' Attorneys
General have filed suit against the same companies and the same doctors. Because
each State only has the power to obtain a restraining order under its own State
law, it is only operable in that particular jurisdiction. To simply prevent
those actors from doing business in their State, each Attorney General has to
file an action in his or her State court. This duplication of effort drains our
resources. We obtained a temporary injunction preventing the Defendants in our
cases from doing business in Kansas, pending the outcome of the litigation. Five
other cases were filed by other States against some of the same Defendants -
essentially duplicating our efforts but because no nationwide injunctive relief
is currently available, this replication is required to adequately protect all
our citizens. Had we been able to file our cases in Federal court under a
statute that allowed an injunction to apply nationwide, those States' citizens
would have been protected from those entities and their practices, and their
Attorneys General could have used their resources to file actions against
different offenders. Since the States' most important goal in this area is to
prevent these businesses from harming our citizens, this simple tool would allow
each State to help protect all the citizens of this nation.
The States
advocate a regime modeled on the federal telemarketing statute that would allow
State Attorneys General to take action in Federal court to curb online
pharmacies. This arrangement would allow States to obtain an injunction
effective nationwide, and yet not prohibit any State from filing an action in
its State court, based on State law. Therefore, the first State suing an entity
could obtain an injunction effective in every State and prevent harm to citizens
in the entire nation, yet other States could still seek restitution for their
State's consumers and seek penalties and fees in their own State courts. In
crafting this relief, we ask that any legislation recognize the unique qualities
of the Internet and clearly state both the nationwide nature of the relief and
that the jurisdiction to act is based upon the location of the consumer at the
time that the transaction takes place.
In addition, I emphasize the need
for an effective national registration or disclosure requirement for entities
that sell prescription medications across State borders. One of the most
difficult challenges in the States' prosecutions has been finding the companies
and people responsible for selling these drugs to consumers in our States. We
all had to sort through multiple shell corporations, addresses that turned out
to be mail drops, overlapping physical and Internet addresses shared by
different entities, and similar evasive tactics. Companies selling dangerous
drugs across State lines should be required to maintain current, accurate,
accessible information about their principals, their physical addresses, and
their identities. We should not have to straggle to find them. The National
Association of Boards of Pharmacy has established an excellent system for
certifying these online pharmacies. We encourage you to use
their program, the Verified Internet Pharmacy Practice Sites,
VIPPSTM, as a model. We strongly support the VIPPSTM program and believe
mandating it would not only provide the information Attorneys General want
displayed on the websites, but would also obviate the need for a second and
federal disclosure scheme.
What role do the States want the Federal
government to take? Most importantly, the Federal government should continue the
effort at consumer education. The Food and Drug Administration and Federal Trade
Commission have both begun campaigns to inform the public of the dangers of
essentially writing your own prescription over the Internet. We applaud their
programs but respectfully submit that it is not enough. The States would welcome
federal resources to provide information to our citizens at our local hospitals,
doctors' offices, even our State fairs! We would like to see a nationwide
campaign including Public Service Announcements, brochures at Veterans'
Administration hospitals and federal social service agencies, and model
education campaigns for schoolchildren. Just weeks ago, a preteen character on
the television show "ER" ordered growth hormone via the Internet and suffered
significant health effects - hence, the need for the emergency room! Such an
incident is not, unfortunately, limited to television fiction. Art, in this
case, has imitated life. Our children are much more sophisticated in their use
of computers and the Internet than most of us are, and they need to know about
these dangers.
Another important place for federal involvement is in
combating the problem of off-shore sites. A commonly held fear is that the
States' actions will merely force these companies out of the country, where laws
are less stringent and enforcement frequently non-existent. But because of the
borderless Internet, these rogue companies still can get their products to our
consumers- and we have no reasonable method to stop them. The FDA's recent
"cyber" letter-writing campaign is an encouraging step, and we would like to see
the Federal government focus more of its efforts on these type of companies. The
Department of Justice has recently designated contacts within the Drug
Enforcement Administration to work with the States. Both of these steps
recognize the need for the States to look to their Federal law enforcement
partners in addressing the threat from entities in other countries.
Just
last week, NAAG hosted a conference in Ann Arbor, Michigan, to discuss issues
arising from State Regulations and e-commerce. Both State and Federal
representatives met to discuss issues such as investigative techniques,
protecting consumers from online fraud, how to effectively present a case at
trial, and interagency cooperation. Training sessions such as this are
absolutely crucial if we as law enforcement want to stay ahead of the bad
actors.
Kansas has led the cooperative effort among the States, with the
continued support of the National Association of Attorneys General. We welcome a
partnership with Federal agencies to solidify our enforcement of the laws of our
States.
Thank you.
END
LOAD-DATE: May
31, 2000 
