Copyright 1999 Times Publishing Company
St.
Petersburg Times
July 05, 1999, Monday, 0 South Pinellas
Edition
SECTION: BUSINESS; COVER STORY; Pg. 8
LENGTH: 1795 words
HEADLINE:
Net dosage
BYLINE: MARK ALBRIGHT
BODY:
Hundreds of small entrepreneurs - and
now the leading drugstore chains - want to be the Amazon.com of online
prescriptions, but the question of regulation remains a big issue.
Consumers buy books from Amazon.com. But do they want their prescription
drugs from Web sites called the Pill Box, No Frills Pharmacy and Viagra Cafe?
More than 200 sites have popped up to peddle
prescription drugs on the Internet. Most are
small entrepreneurs, but the next generation of online pharmacies is being
bankrolled by the leading drugstore retail chains. Walgreens, Eckerd Drug, CVS
and Rite Aid, the nation's four biggest chains, fear that ignoring cyberspace
will be dangerous to their health. So by September, those chains and some of the
largest pharmacy benefit management plans will start filling
prescriptions over the Internet. The rush to
sell drugs online raises plenty of concerns. While pharmacies are subject to
state laws, regulating Internet drug sales could be tricky. The Internet doesn't
recognize state or national boundaries. The Food and Drug Administration last
year shut down a Web site based in Colombia that was marketing home abortion and
sterilization kits. Many offshore sites mail controlled substances that require
no prescription in other countries.
Several states are investigating
some U.S. sites that are staffed by online physicians who for $ 39 to $ 80 will
prescribe the potency pill Viagra, weight loss drugs and Propecia, the hair-loss
remedy. All customers have to do is fill out a short questionnaire. Many of the
Web docs also ask patients to waive liability.
Even those in the
business of Internet drug sites realize the industry needs to be careful. "This
is a lot different than selling CDs and books," said Rachel Templeton,
spokeswoman for Soma.com, one of the new online pharmacies competing for a piece
of the $ 180-billion prescription business. "For starters, you can kill
someone."
Consider a recent death in Aurora, Ill. After shrugging off
chest pains, 52-year-old Robert McCutcheon drank a few beers, went to his
girlfriend's house, popped a Viagra tablet and had sex three times before dying
of a heart attack. Despite a family history of heart problems, he got Viagra
from an online pharmacy, according to the Chicago Tribune.
Online
pharmacies operate much as mail-order pharmacies. In fact, the drugstore chains
will use their mail-order distribution centers to fill Internet orders.
Online pharmacies tout themselves as more convenient. You can e-mail the
pharmacist. In some you can talk with one on a toll-free call. To get the
prescription, customers type in the prescription and doctor information. Online
pharmacists verify the prescription just as a retail pharmacy does. They call
the doctor, check his record with Drug Enforcement Administration and discuss
potential drug interactions. Some sites are experimenting with e-mail
communications with doctors.
Most states including Florida allow
prescriptions to be faxed or transmitted by telephone conversation, so Internet
pharmacies are legal. Few online pharmacies will accept orders for powerful
Schedule II drugs such as morphine and barbiturates. Those drugs can be legally
prescribed only by a signed, paper prescription. But regulators say some
offshore sites dodge that law.
In addition to the security concerns of
transmitting medical information over the Web, some regulators fear drug
companies and the alternative medicine industry will use the sites to promote
their latest cures.
The sites brim with health care information and
disease management pages for up to 100 afflictions. Some even have chat rooms
where people with chronic conditions such as diabetes and asthma can talk to
each other and compare notes on treatment options.
Most sites use e-mail
reminders when it is time to order refills. They notify customers of new
information posted on their sites that is customized to the patient's medical
profile.
Merck-Medco Managed Care LLC found that once customers got used
to getting refills online, 80 percent of them considered the pharmacy benefit
company's site their primary source of prescription information. Physicians
worry it will lead to more self-diagnosis.
"Amazon.com sends you an
e-mail a few weeks after you buy a book suggesting another one on the same
topic," said Carmen Catizone, director of the National Association of
Pharmacy Boards. "This could be dangerous if they e-mail all heart patients
suggestions of other medications only to get people to buy more drugs. People
should not shop for health care needs like they do for Christmas presents."
Florida regulators are investigating the practices of some online
pharmacies, but decline to identify them until the investigation is done.
Congress and the Legislature set up task forces to study whether new laws are
needed. The American Medical Association is drafting ethical guidelines for
physicians who prescribe over the Internet. Meanwhile, some medical
professionals are wary about how cyber-pharmacies and online physicians fit into
the emerging world of telemedicine.
"If the physician is supposed to do
a physical exam and patient history before prescribing, how can they do that
over the Internet?" said John Glotfelty, a Lakeland ophthalmologist and
chairman of the Florida Board of Medicine. "This state just seems to assume that
everything about telemedicine is great."
Florida law requires only a
"valid relationship" between a patient and a prescribing physician.
The National Association of Boards of Pharmacy, a trade group, offers a
"seal of approval" to online pharmacies that voluntarily meet a set of
standards. That is supposed to help consumers decide if they are sending their
prescriptions to legitimate pharmacies or to quacks or scam artists who take the
money but never send the drugs.
"Before sending a prescription to anyone
on the Internet you should check with your state board of
pharmacy," Catizone said. "The Internet has attracted a visible band of
unlicensed and unscrupulous entrepreneurs interested only in a quick profit,
often at the patient's expense."
Besides the entrepreneurs, some of the
most prominent Web sites are Silicon Valley start-ups trying to become the
Amazon.com of online pharmacies.
Amazon.com owns 43 percent of
Drugstore.com, which wants to raise $ 67.5-million through an initial public
offering. Microsoft co-founder Paul Allen poured $ 40-million into the venture.
PlanetRx.com of San Francisco is backed by $ 50-million raised from Health
South, hospital operator Tenet Healthcare Inc. and Rupert Murdoch's News Corp.,
which also controls the Orlando cable TV channel America's Health Network. LVMH
Moet Hennessy Louis Vuitton invested in PlanetRx because it sees online
drugstores as a place to sell its luxury-priced cosmetics. RxAmerica.com
includes Albertson's Inc. and Longs Drug Stores as partners. Ivax Corp., a Miami
pharmaceutical manufacturer, is buying a 35 percent stake in go2pharmacy.com, an
online pharmacy in Albuquerque, N.M.
Meanwhile, the traditional
drugstore chains learned from the bookstore industry not to wait too long to go
online. Indeed, Amazon.com had a three-year lead over traditional book retailers
such as Barnes & Noble. CVS Corp., for instance, has a few stores in the
Panhandle. But its online pharmacy, which honors 9,000 health care plans, can
compete statewide immediately.
So can Rite-Aid, which in June agreed to
make drugstore.com the exclusive Net link for prescription work at its 3,800
stores as well as its pharmacy benefit business, PCS Health Systems. Rite-Aid
paid $ 7.6-million for a 25 percent stake in drugstore.com.
Eckerd Drug
plans to begin taking prescription orders on its Eckerd.com site in September.
"We think it's a natural extension of what we've been doing since 1986 with mail
order," said Jim Smith, a senior vice president who heads the e-commerce
effort at Eckerd Corp. of Largo. "By the end of this year we'll have most all of
our drugstore products available online - even the Beanie Babies."
Walgreen Co., which began taking refill orders online in June, is on a
similar schedule. Merck-Medco one of the nation's biggest pharmacy benefit
managers with 51-million members, will take new prescriptions on its 9-month-old
online pharmacy this fall. Merck-Medco expects 40 percent of its prescriptions
will be handled over the Internet within five years.
While Eckerd and
Walgreens create their own sites, CVS bought Soma.com., a Seattle online
pharmacy. CVS thinks it got a jump on competitors by buying an existing site.
Analysts say the $ 30-million price proves Wall Street doesn't see online
pharmacies commanding the premium stock prices of other Internet ventures.
"We bought Soma.com essentially for what it would have cost to set up
our own online pharmacy," CVS spokesman Todd Andrews said.
The
drugstore chains hope to use their familiar brand names and stores as a
competitive edge. Store-less pharmacies rely on delivery services or the mail.
If a customer wants a prescription filled right away, they recommend a trip to a
drugstore. The drugstore chain sites will let you dodge delivery charges with
prescription pickup at their stores.
Online pharmacies see their
advantages as pricing, no sales tax on non-prescription purchases and the
drugstore experience itself.
"People today find the drugstore a bad
experience," said Stephanie Schear, co-founder of PlanetRx.com. "They have
to stand in line. It's impersonal. People don't feel comfortable when the
pharmacist yells over the crowd, "Mr. Smith, your Prozac order is ready.' "
As with many Internet ventures, profits have yet to be part of the
formula among sites trying to emulate traditional drugstores by offering
prescriptions and up to 27,000 drugstore products. Drugstore.com lost $
10-million on revenues of $ 652,000 during its first quarter online.
With 75 percent of the nation's prescription business controlled by
health care plans, factors other than happy customers may determine the winners.
Even as health plans pressure members to use mail order, only 13 percent of
prescriptions are filled that way.
Walgreens filled about 1,400 refills
a week during its first month online versus 4.3-million prescriptions a week in
stores and through mail order.
The Web start-ups hope to build a
price-conscious audience because they do not have the expense of running stores.
"The chains have to be concerned about pricing or they will cannibalize
sales in their stores," Schear said. "As an Internet start-up Wall Street
doesn't expect us to turn a profit in the short term while we build a customer
base. The Walgreens, Rite-Aids, CVS and Eckerds of the world have to watch their
earnings every quarter."
GRAPHIC: COLOR PHOTO,
JIM DAMASKE, (3); BLACK AND WHITE PHOTO, JIM DAMASKE; Prescriptions filled by
automation are checked before packaging at Eckerd's mail-order distribution
center in Largo. (ran pg. 1); Pharmacists Jim Plaia and Alan Tolba check
prescriptions that have been ordered by mail.; A robot moves between drug
dispensers while processing orders for prescriptions at Eckerd's Largo
mail-order distribution center.; Technician Anthony Lam removes a tray of drugs
from the robot.
LOAD-DATE: July 6, 1999
