June 14, 1999

The Honorable Robert Pitofsky
Chairman
Federal Trade Commission
Sixth and Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Dear Chairman Pitofsky:

As you know, the Committee on Commerce has been investigating a number of issues pertaining to the sale of pharmaceutical products over the Internet.

The recent explosion of online sites that are both advertising and selling prescription drugs across state and even international lines clearly challenges the existing regulatory structure. Presently, it is not clear who is responsible for regulating the sale and distribution of pharmaceutical products over the Internet, nor is it clear what actions are being taken to ensure that public health is being protected in this new consumer environment. Although some agency officials have told us that the states are mostly responsible for shouldering this burden, the cross-border nature of most websites, coupled with the sheer volume of Internet activity, makes this a very difficult undertaking for the states, who may not have the resources, expertise, or jurisdiction to adequately oversee this area.

A host of serious regulatory concerns are indeed raised by Internet pharmacies. Patients are often required to submit personal medical data to an online pharmacy before their prescriptions are processed, and it is not clear how all websites will safeguard such personal information. Some online pharmacies could contribute to the problem of drug interactions or other complications in cases where a traditional face-to-face doctor-patient relationship or pharmacist-patient relationship is replaced by online "consultations." Finally, in some cases, it is impossible to determine the source or even the quality of some pharmaceutical products sold online. Without a well-coordinated regulatory system in place, it may become easier to sell improperly stored, illegally manufactured, or possibly tainted drugs to unsuspecting consumers. Moreover, if this area of commerce is allowed to operate with little or no regulatory review, the real possibility exists that the unscrupulous sites could ultimately tar the industry as a whole, thus affecting legitimate businesses.

Committee staff have met with officials from the Federal Trade Commission (FTC), the Department of Justice (DOJ), and the Food and Drug Administration (FDA) in an attempt to determine who is responsible for overseeing and regulating this area of commerce. These discussions have produced – at best – only vague responses as to which federal agency or department is in charge, and what exactly each is responsible for. Thus far, the federal effort (as comprised by FTC, DOJ, and FDA) appears uncoordinated and disorganized.

Both FTC and FDA officials have previously told Committee staff that the regulation of pharmacies has been, and remains, largely a state function. Indeed, states have generally focused on ensuring that pharmacies observe specific guidelines to safely dispense medications to the public, and that they are licensed and operated by qualified and trained staff. State regulators also ensure that any pharmacy under its jurisdiction properly stores and safeguards the pharmaceuticals it sells. Nevertheless, it is not clear that most states have the technology or resources to actively determine who is selling online from their state and thus who should receive scrutiny from that state’s regulator(s).

To complicate matters further, in recent Committee staff interviews, some state officials indicated that they believe many Internet sites selling pharmaceutical products in the U.S. are actually foreign-based. Although these sites are readily accessible from any point in the U.S. (and may even display a U.S. mailing address), we have found that several websites are indeed operating from abroad. In the case of foreign Internet sites advertising and selling pharmaceutical products in the U.S., it is particularly important, given the limits on states in the arena of international commerce, that federal agencies or departments assume responsibility for oversight.

Given our concerns in this area, we would like you to address the following:

(1) What specific activities and functions does FTC believe it is responsible for regarding the sale and distribution of pharmaceutical products over the Internet? Please describe both (a) the precise activities (if any), now being conducted by FTC to review Internet sites selling pharmaceutical products online, and (b) the amount of time (in FTEs or another similar measure) dedicated to such efforts.

(2) Does FTC believe it has enough resources to conduct the activities defined in the previous question? If, not, please describe what additional resources (manpower, software/hardware, etc.) FTC needs to enforce its jurisdiction. Please also describe any assessments FTC has done to determine what resources it may need to regulate online pharmacies.

(3) What agencies or departments at either the state or federal level does FTC believe have the primary jurisdiction over Internet pharmacies? For this question, please identify what FTC’s understanding is of the responsibilities of each agency identified for this question, and, whether FTC believes other agencies or departments (state or federal) are responsible for regulating online pharmacies. Also, describe FTC’s understanding of what each agency or department is doing to address this matter.

(4) Please describe what agencies or departments FTC believes are responsible for regulating online pharmacies selling in the U.S. market, but based outside the U.S. border. As in question (3), please identify and describe what FTC believes are the roles and responsibilities of each agency identified, and what FTC’s understanding is of what each agency or department is presently doing to address this matter.

(5) Please detail any efforts FTC has taken with any other identified federal agency or department to define and coordinate the regulation of online pharmacies. This should include both the domestic and the international component of this matter. Please also describe any efforts to coordinate with any state on this matter. If this is being done, please provide a list of the names and titles FTC is coordinating with. Finally, please list any planned upcoming meetings designed to coordinate such activities.

(6) Does FTC believe that existing laws and regulations, or the present state/federal regulatory structure, can adequately regulate online pharmacies? If not, what discrepancies exist, and what changes, if any, does FTC believe must be made?

(7) Please describe FTC’s knowledge regarding the differences between existing online pharmacies. For example, some reports suggest that most online pharmacies only fill prescriptions. Other reports, however, have suggested that some actually provide for a doctor consultation (for example, a quick questionnaire is submitted over the Internet, it is reviewed, and then the prescription is then approved and sent directly to the patient without a doctor ever seeing the patient). How prevalent is this latter operation? Do any trends appear in comparing one form of online pharmacy with another?

(8) What is FTC’s understanding of how these websites deal with issues such as medical records privacy/protection, the selling of controlled substances, or drug interactions? How serious are these issues and what shortcomings, if any, do online pharmacies have with regard to these issues? Does FTC have any knowledge of how online pharmacies prevent unqualified persons from receiving prescriptions? Are online pharmacies more susceptible to fraud or deception from FTC’s perspective? If so, please explain how?

(9) What quality issues does FTC believe relate to the methods used to ship online pharmaceutical products, and does FTC believe it has jurisdiction in this area?

(10) Please describe what technology challenges the Internet has posed to FTC. Do you believe that FTC has the technology to adequately and efficiently regulate any identified activities under its jurisdiction? Please describe where at FTC the technology to review and track online pharmacy sites resides, and describe that effort.

Thank you for your cooperation and attention to our request. If you have any additional questions about this matter, please have your staff contact Mr. Christopher Knauer, Minority Investigator, at (202) 226-3400. We look forward to working with you on this and other important pharmaceutical integrity and consumer protection issues.

Sincerely,

JOHN D. DINGELL
RANKING MEMBER
COMMITTEE ON COMMERCE

RON KLINK
RANKING MEMBER
SUBCOMMITTEE ON OVERSIGHT
  AND INVESTIGATIONS