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Document 44 of 60.

JULY 30, 1999, FRIDAY

SECTION: IN THE NEWS

LENGTH: 1356 words

HEADLINE: PREPARED TESTIMONY OF
THE HONORABLE CARLA STOVALL
ATTORNEY GENERAL
STATE OF KANSAS
BEFORE THE HOUSE COMMERCE COMMITTEE
OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE
SUBJECT - ON-LINE PHARMACIES

BODY:

Chairman Upton, Ranking Member Klink, members of the Subcommittee, thank you for the invitation to testify today and for your leadership on the important issues the Subcommittee is considering. Let me also thank Chairman Bliley and Ranking Member Dingell of the fall Committee for taking part in this hearing and for your attention and concern about the issues involved.
The Internet and the World Wide Web offer countless opportunities for Americans as we move into the 21 " Century. In Kansas, we view the Internet as an important lifeline for rural America. We know that, through cyber technology, it will soon be possible to participate as fully in the global economy from Dodge City or Goodland as from New York or Los Angeles. Our state is soon to be the site of the largest distribution center for Amazon.com, and we are proud to be the home of Sprint, which is on the cutting edge of telecommunications technology. So we welcome the dawn of the Information Age and the burgeoning growth of "e-commerce".
But we also know that the Internet brings with it new opportunities for old-fashioned lawlessness and fraud, and for repackaged challenges to States' rights. Law enforcement authorities around the country, both state and federal, are struggling to combat pornography, pyramid schemes, gambling, and a host of other ancient evils that have cropped up anew online. Investigating and prosecuting online offenders in all these areas raise new challenges for law enforcement. But two principles should always guide us: (first) an illegal act does not become legal merely because it is committed through the Internet, and (second) a state does not become powerless merely because a threat to the health and welfare of its citizens invades online rather than in person, by mail, or in some other traditional manner.
Those are the principles that led the State of Kansas to challenge web site operators who are recklessly - and illegally - selling prescription-only drugs to Kansans via the Internet. And let me be very clear - our law enforcement actions are aimed at stopping the illegal Internet sale of drugs to Kansans, not at stopping online drug sales entirely. We have no quarrel with doctors who prescribe to Kansas patients who use the Internet, so long as those doctors are properly licensed by the State of Kansas and meet all substantive requirements for practicing in the State. And we have no objection to legitimate pharmacies that dispense prescription medications to Kansans using the Internet, so long as those pharmacies are properly registered with the State of Kansas and operate by the same standards as the drug store on Main Street -- standards designed to protect the health and welfare of our citizens.
We do object strenuously to those who believe they can sell potentially dangerous drugs to our citizens, without complying with state laws, merely because they set up a web page. As a Kansas Board of Pharmacy official said, the click of a mouse does not establish a physician-patient relationship.
We have filed six lawsuits, naming as Defendants eight companies, six doctors and four other individuals. All of them participated in the sale of prescription drugs to Kansans. None of them required any in- person examination or consultation prior to prescribing and dispensing those drugs. Some of them sold "lifestyle" drugs, such as Viagra, to minors without any apparent hesitation. None of these Defendants is properly licensed or registered in the State of Kansas.
I have submitted with my testimony a summary of this pending litigation filed by the State of Kansas, and I would ask that this summary be included in the hearing record.
The theory of our cases is simple: By prescribing drugs to Kansans, certain Defendants practiced medicine in our state without the required legal authority. By dispensing drugs to Kansans, certain Defendants practiced pharmacy in our state without the required legal authority. And by recklessly dispensing drugs without any doctor- patient relationship whatsoever, while failing to disclose to consumers material information such as health risks associated with use of some of these drugs, all of the defendants committed deceptive and unconscionable acts in violation of our Consumer Protection Act.
Will we win these cases? We certainly think so! There are tough problems, such as overcoming jurisdictional challenges and locating elusive Defendants using multiple shell corporations and mail drops. But we are confident our basic approach is sound, and we are confident the Courts will continue to apply Kansas law to protect Kansans within our State!
And make no mistake about it - this is very much about protecting the health and welfare of Kansas citizens. Many of these medications have potentially serious side effects. If used improperly, many of them can kill. We would not even consider repealing our State laws that establish standards for dispensing dangerous medications within the State, and there -is no reason to accept a lesser standard when dangerous drugs are sold to our citizens online. In fact, this issue first came to our attention when physicians in our state expressed concern that patients under their care could receive prescription drugs without the treating physician's knowledge, increasing the risk of inadvertent drug interactions.
Kansas is in front on this issue, but we are not alone. I know my colleagues in other states are increasingly active in opposing illegal Internet drug sales. I believe a united, coordinated effort among states will serve us well in this matter.
We welcome Federal involvement as well, although the solution is. not to "federalize" this problem. States historically have had a dominant role in regulating doctors and pharmacies for the protection of local citizens. We should strengthen, not diminish, that role.
To that end, I believe states should explore the possibility of establishing disclosure requirements for entities that sell prescription medications across state borders. One of the most difficult challenges in the Kansas prosecutions has been finding the companies and people responsible for selling into our State. We have had to sort through multiple shell corporations, addresses that turned out to be mail drops, overlapping addresses shared by different entities, and similar evasive tactics. I believe 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 struggle to find them.
To the extent new federal legislation is considered, I hope you will keep in mind two important principles:
First, any federal requirements should be only a floor, not a ceiling. Do not pre-empt the States. Allow us to continue to set substantive requirements for the regulation of doctors and pharmacies that operate within our borders, and let us continue to have tougher requirements than the federal government as we see fit.
Second, any new federal enforcement scheme should retain states as key actors. I know there is discussion of a regime modeled on the FTC's Telemarketing Sales Rule that would allow state Attorneys General to take action in federal court to curb illegal online pharmacies and to obtain nationwide injunctive relief. I believe there is a certain appeal in this, and NAAG certainly has no objection.
Each of these ideas may help. But, ultimately, the answer to this problem will not be to reinvent the wheel. Each jurisdiction in this country, including the federal government, has requirements in place to ensure that dangerous drugs are dispensed safely. We do not need new standards. Rather, we need new cooperation among states, and with federal agencies, to ensure that our existing standards are followed and applied to Internet sales.
That is the effort we in Kansas are trying to lead. That is the effort that the National Association of Attorneys General supports. And that is the effort that, I hope, the Congress will help us to continue.
Thank you.
END

LOAD-DATE: August 4, 1999

Document 44 of 60.


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