Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
July 30, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 2438 words
HEADLINE:
TESTIMONY July 30, 1999 MR. PETER NEUPERT HOUSE COMMERCE
OVERSIGHT AND INVESTIGATIONS ON LINE PHARMACIES
BODY:
Oversight Hearing Drugstores on the Net: The Benefits and Risks of On-line
Pharmacies Subcommittee on Oversight & Investigations July 30, 1999 Prepared
Statement of Mr. Peter Neupert Drugstore.com 13920 SE Eastgate Way, Suite 300
Bellevue, WA 98005 Panel 3, Witness 5 Good morning Mr. Chairman and Members of
the Committee. I am Peter Neupert, President and Chief Executive Officer of
drugstore.com. I thank you for inviting me here today, and I am pleased to have
the opportunity to speak with you about drugstore.com. We are an Internet
drugstore dedicated to providing a convenient, private, safe, and informative
shopping experience to our customers. In my testimony, I will explain to you how
drugstore.com operates, and our dedication to providing high quality and safe
prescription services through our licensed pharmacy. You will conclude that the
drugstore.com pharmacy has many of the attributes of the traditional corner
drugstore and the well- established mail service pharmacy with the added
capabilities of the Internet. Like community and mail service
pharmacies, our customers must have a prescription from their
doctor--we do not prescribe medication. What's new here is not the practice of
pharmacy, but the way we communicate with and inform customers. Our prescription
fulfillment is built on the long-standing procedures and infrastructure of
walk-in and mail service pharmacies. The quality control we have established at
drugstore.com incorporates the best practices of mail services and community
pharmacies. Our mission is to help consumers manage their well-being using the
Web. Our core value proposition is to educate and inform consumers, while saving
them time and money. I will have more to say about our drug information and
prices later in my testimony. Full Service Drugstore Before I describe our
pharmacy service, which is the real focus of this hearing, I want to give you a
snapshot of our entire site. When we launched our full-service online drugstore
in February, 1999, we were responding to the growing trend of consumers taking a
bigger role in their health care decisions. That increasing trend is apparent in
the number of people seeking health information online. According to recent
estimates, the number of consumers accessing the Internet for health and medical
information has increased from 3.2 million in 1995 to 22.3 million in 1998,
because the Internet provides up-to-date information from a variety of sources
along with person-to-person support groups. drugstore.com is five stores in one
with health, beauty, wellness, personal care, and prescription drugs. We focus
on those products designed to help people live longer and feel better, including
dispensing medications used by consumers on a chronic basis. What is new is that
online pharmacies and drugstores offers an exciting prospect for increasing
public health by providing more convenient and informative access to health
products and information. Our goal is to empower consumers by permitting them to
make more informed health-related purchases while saving both time and money.
While we offer the same safety and quality of community drugstores, our online
pharmacy has unique benefits: Information - Our site provides a "Solutions" area
where shoppers can find the information they need to make informed purchase
decisions. It includes buying guides, a wellness guide, a medical reference, and
shopping advisors. We provide comprehensive drug information where consumers can
learn about their prescription drugs, including usage, cautions and possible
side effects, as well as drug prices. The Web is the only place customers can
conveniently price shop for prescription drugs. We also post answers to the
questions most frequently asked of our licensed pharmacists. For each product,
we display all the information a consumer could read on the package of product -
including all the ingredients, directions, and product warnings in a format that
is easy to read. Convenience - Our site permits consumers to shop from wherever
they have Internet access, and at anytime. Consumers can receive their products
via direct delivery to their home or office. We make it easy for consumers to
save time doing this chore, by saving their personal shopping list and by
providing e-mail reminders on prescriptions drugs and other products. Selection
- We offer a broad selection of products so that consumers can obtain products
that best suit their health needs. Communication - Use of the Internet allows
drugstore.com to communicate with its customers via e-mail. Our "Ask Your
Pharmacist" feature, prescription refill reminders, monthly newsletters and
online purchase order tracking information, allows continuing patient/pharmacist
communication from the comfort of the patient's home. Privacy - Customers can
shop at our drugstore in privacy, and thus avoid the potential embarrassment of
buying personal items or asking personal questions at community drugstores.
Because consumers can more freely ask personal questions via e-mail, they will
be able to take a more proactive role in managing and promoting their personal
health. Licensed Pharmacy As I have stated previously, filling prescriptions at
drugstore.com works the same way as a community pharmacy and mail service
pharmacy. We focus on dispensing medications used by consumers on a chronic
basis. For acute care needs, we recommend that customers pick up their
prescriptions from a local pharmacy. To fill a prescription at drugstore.com
involves the same three steps at any community or mail service pharmacy. First
we are provided with a valid prescription from our customer's physician,
customer, or our customer's current pharmacy. The physician calls or faxes in
(where permitted by law) the prescription to us at 1-800-drugstore. At the
customer's request, we will call the physician for the prescription. The
customer may also mail us their original prescription or request a transfer of
their prescription from their current pharmacy. If a customer attempts to
purchase a prescription drug without providing a valid prescription, the
customer will be notified promptly via e-mail that drugstore.com cannot fill the
order until we are given a valid prescription. We do not provide prescription
medications without a prescription, nor do we prescribe medications. We also
contact the prescribing doctor's office to verify prescription orders for those
controlled substances that we dispense. We do not dispense Schedule II
controlled substances due to their high potential for abuse. Before we will fill
a prescription, we require each customer to complete an individual patient
profile of drug allergies, current medications, medical conditions, and
preference for generic substitution. We carefully cross-check all of the
information we get from the patient and doctor. We then enter the prescription
order into a computer and perform all of the same checks for drug interactions
that you expect from your local pharmacist. Once we have received and verified a
new prescription, and cross-checked that prescription for interactions we will
then fill and mail the prescription. We use state-of-the-art bar coding at each
step of the process to ensure patient safety. We also use automated pharmacy
systems to assist with the dispensing of medications. Our pharmacists then
recheck each prescription for accuracy before a medication is sent to the
customer's home or office. We send drug-specific patient information with each
prescription. The shipping method is based on consumer choice and the type of
drug. Standard shipping via U.S. Postal Service Priority Mail is provided free
of charge to the customer. Through our partner, RxAmerica, we ship prescription
products to every state in the United States. Our recent partnership with Rite
Aid will enable customers to order refills of their existing Rite Aid
prescriptions on our site, and pick them up at a local Rite Aid store, or
receive them through drugstore.com's mail service. To purchase a prescription,
the customer provides us with a credit card number for the cash price or
copayment and insurance information. Our prescription drug service saves
consumers time. Our vast information on drugs, including drug prices, enables
customers to save money and to make more informed decisions. We are committed to
giving customers real value. We monitor the prices of products, including
prescription drugs, sold at national retail chain drugstores and our cash prices
are on average lower than those of the national drug chains. We are leveraging
the lower cost structure of the Web to lower costs on drugs. A hallmark of our
pharmacy services is the patient counseling and customer support that we provide
to help our customers use medications safely and effectively. Our popular "Ask
Your Pharmacist" feature, which I mentioned earlier, is staffed by clinical
pharmacists. It allows customers to ask questions online and receive
personalized responses from our pharmacists. drugstore.com provides patients
with a toll-free number to access a pharmacist 24 hours a day, 7 days a week.
Customers can also access their secure, individual medication profile, which
contains a history of their prescription purchases at drugstore.com. In
addition, customers receive refill reminders via e-mail, notifying them when
they need to place a refill order. This e-mail reminder service helps to promote
drug compliance and improved patient outcomes. The increased convenience of our
Internet pharmacy has proven crucial for many of our customers. We continually
receive e-mail messages from customers that highlight the advantages of online
shopping, as well as commending and thanking us for our innovative and
personalized service. For example, one message from a woman housebound with
multiple sclerosis told of how she hates asking people for assistance. Our site
has enabled her to have the independence she desires in complying with her
medical treatment program. A message from another customer emphasized how the
consistency of our site permits her to obtain her medication even when she
moves. These messages highlight the benefits that online pharmacies can offer
consumers. With respect to patient privacy and the confidentiality of our
pharmacy records, drugstore.com will not release any prescription information in
connection with any patient identification other than to the patient, our
partner RxAmerica which fills the prescriptions, the patient's authorized
representative, or the prescribing or authorized practitioner caring for the
patient. In addition, all personal information and credit card information are
encrypted using SSL encryption technology. We are a licensee of the TRUSTe
Privacy Program which is the leading online privacy seal program. The seal is
awarded to sites that adhere to established privacy principles and comply with
ongoing oversight and consumer complaint resolution procedures. Finally, because
drugstore.com is dedicated to providing safe, legal
prescription services to our customers, we have applied for
approval into the Verified Internet Pharmacy Practice Sites
("VIPPS") certification program established by the National Association of
Boards of Pharmacy. This program will serve to inform the public whether online
pharmacies are licensed in good standing with the appropriate state boards of
pharmacy and other regulatory agencies, and whether they comply with quality
criteria. Such self-regulation provides a means for sites to inform consumers
about the site's commitment to compliance with the existing laws and
regulations. Compliance with Existing Laws drugstore.com complies with all
applicable state and federal laws and regulations governing the provision of
drugstore products and information over the Internet. For example, we comply
with federal and state requirements for pharmacy licensing and registration, and
for providing customers with relevant information about their prescription
medications. We comply with the laws and regulations governing non-resident
pharmacies in every state that has such requirements. We and our distribution
partners comply with laws relating to security, recordkeeping, and reporting for
pharmaceutical sales, as well as medical record confidentiality. In addition, as
mentioned above, we participate in industry efforts to self-regulate online
pharmacies. In keeping with its reputation as a leading online drugstore,
drugstore.com will continue to comply with applicable laws and regulations
relating to online pharmacies and drugstores. However, we hope that the
Subcommittee will consider that there are already extensive laws and regulations
in place that affect online drugstores. It is our belief that the number of
illegitimate pharmaceutical web sites do not exist due to lack of appropriate
existing laws and regulations, but rather to the need for greater enforcement of
those laws and regulations. Legitimate online pharmacies and drugstores are an
emerging market which provides an exciting prospect for increasing public health
by providing more convenient and informative access to health products and
information. We must be careful to distinguish between safe, legitimate online
pharmacies and profiteers using the Internet to engage in illegal activities
with willing participants. The most practical approach in differentiating the
two is by educating consumers and providing them the tools and means to identify
the safe, legitimate online pharmacies. As I mentioned above, drugstore.com is
looking forward to participating in the VIPPS certification program and
displaying its emblem on our web site. drugstore.com will commit resources to
educating consumers about the VIPPS certification, so that they will know how to
make an informed choice about the sites they utilize. The reliance on industry
self-regulation by legitimate web sites results from the realization that the
Internet does benefit consumers as long as they are provided with a means of
making intelligent choices. Other examples of such industry self- regulation
include the Health on the Net Foundation's code of conduct for medical and
health sites, and the Tufts' Nutritional Navigation system which rates nutrition
web sites. I hope that through our mutual dedication to providing consumers with
beneficial drugstore services, we can work together to enable legitimate online
drugstores to continue providing efficient customer service. Thank you very much
for the opportunity to speak with you today. I would be pleased to answer any
questions you have.
LOAD-DATE: August 4, 1999
