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Document 15 of 60.

March 21, 2000, Tuesday

SECTION: PREPARED TESTIMONY

LENGTH: 1916 words

HEADLINE: PREPARED TESTIMONY OF CARLA J. STOVALL KANSAS ATTORNEY GENERAL

BEFORE THE SENATE HEALTH, EDUCATION, LABOR, & PENSIONS COMMITTEE

SUBJECT - EDRUGS: WHO REGULATES INTERNET PHARMACIES

BODY:
Chairman Jeffords, and Members of the Committee, thank you for the opportunity to testify today about the law enforcement issues surrounding the online sale of drugs, from the States' perspective.

We recognize that some online pharmacies are operating within legal and regulatory limits. Offering prescription drugs in a lawful manner over the Internet affords consumers privacy and convenience not always available from their local drug store. We have no legal quarrel with doctors who prescribe to Kansans over the Internet, so long as those doctors are properly licensed by the State of Kansas and meet all substantive requirements for doctors practicing in the State. And we have no objection to legitimate pharmacies that dispense prescription medications to Kansans over the Internet, so long as those pharmacies are properly registered with the State of Kansas and operate by the same standards as the drug stores on Main Streets -- standards designed to protect the health and welfare of our citizens.

Those are the principles that led Kansas and other States to challenge fly-by-night operators who recklessly -- and illegally -- sell prescription-only drugs via the Internet. State law enforcement actions are aimed at stopping the illegal Internet sale of drugs, and certainly not at stopping online drug sales entirely. Unfortunately, the vast majority of the companies operating online pharmacies are not following the law. In fact, the ratio is about 400 to 6. All the defendants in the lawsuits filed by the States have one thing in common - they did not require a valid prescription to dispense the prescription-only drugs. These defendants 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 feckless 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. One of my female special agents also received Viagra, although in one instance the company called her and asked her to resubmit the order in a man's name so they could fill the "prescription." 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.

To date, Kansas, Missouri, and Illinois have filed suit against sixteen "rogue sites," and Michigan has notified seventeen sites that they will file suit, although all of their potential defendants have entered into settlement negotiations. Several other States are investigating sites with a view toward litigation.

The National Association of Attorneys General (NAAG) is coordinating a united effort among the States to combat this problem, and that has served all of our citizens well. NAAG has established the Online Sales of Drugs 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.

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 these criminals 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. 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, on its last conference call. The States have been very open in providing information and otherwise cooperating in investigations by Federal agencies, including at least one criminal investigation of a doctor that has resulted in a Federal indictment. The Federal representatives have been just as helpful to us. Our working group has established an impressive network of representatives from both State and Federal agencies who quite often consult each other, regarding common investigative targets and current caselaw deciding jurisdictional and other legal issues affecting the Internet.

The solution is not to "federalize" the solution this problem. States historically have had the dominant role in regulating doctors and pharmacies for the protection of local citizens. We should strengthen, not diminish, that role. The States are very encouraged that the Federal Government is proposing an aggressive plan, and we recognize that working together is the only way to make any plan a success.

The National Association of Attorneys General submits three 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, and let us continue to have tougher requirements than the Federal government as we see fit. 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.

Third, we support a 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 struggle 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 as a model. However, we are concerned about the precedent a "pre-approval" system would establish.

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. A few 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. Frankly, the States don't have the resources or the tools to effectively deal with entities in other countries.

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: March 23, 2000

Document 15 of 60.


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