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An Online War Against Prescription Drugs?

Last October, as fears of anthrax swept the nation, many Americans turned to the Internet to find foreign websites promoting and selling anthrax antibiotic ciprofloxacin (Cipro). The drug, which requires a prescription, prompted the U.S. Food and Drug Administration (FDA) to issue "cyber letters" to websites selling the unapproved and non-prescribed doses of Cipro.

While the anthrax scare has died down, government concerns over "rogue" online pharmacies continue as sites not licensed to dispense prescriptions push drugs such as Viagra and Propecia. Some sites blatantly advertise that no prescription is required. In other cases, the consumer is told to respond to a brief questionnaire and then a "doctor" provides a prescription for the requested drug, which is then mailed to the consumer.

According to the government and legally licensed online pharmacies, the illegal Web drug stores bypass not only regulatory safeguards, but also the safeguards that are inherent in a legitimate doctor-patient relationship. They argue that consumers obtaining medications from so-called "rogue" pharmacies place their health at risk.

Some consumer groups, however, contend that the high cost of prescription drugs force people to the illegal sites. With the cost of prescription drugs increasing by double digit percentages every year, seniors on fixed incomes, for instance, are often faced with difficult financial decisions. The rogue pharmacies are seen by many as the only way to afford to prescription drugs.

The legal status of the outlaw online pharmacies will be one of the many subjects discussed this week when the Federal Trade Commission (FTC) opens three days of testimony Tuesday on possible anti-competitive efforts by bricks-and-mortar businesses to restrict competition on the Internet.

The event will cover a wide range of topics including online sales of pharmaceuticals, wine, contact lens, real estate, financial instruments, automobiles and caskets. The workshop will feature testimony from senior representatives of industry, academia, state and federal government agencies, and independent public policy organizations.

The FTC workshop follows a recent congressional hearing by the House of Representatives' Subcommittee on Commerce, Trade, and Consumer Protection on "Possible State Impediments to E-commerce." The FTC testified at the hearing, and the Subcommittee's Chairman, Rep. Cliff Stearns (R.-Fla.), indicated that Congress will ask for further testimony from the FTC after the workshop ends.

In the past decade, there has been growing concern about possibly anti-competitive efforts to restrict competition on the Internet. The FTC's public workshop will focus on two types of possible restrictions.

First, many states have enacted regulations that may have the effect of aiding existing bricks-and-mortar businesses at the expense of new Internet competitors. According to the TFC, these regulations "may be justified by consumer protection interests or other sound public policy reasons."

Second, there has been ongoing concern that private companies may be curtailing e-commerce by employing potentially anti-competitive tactics, such as collectively pressuring suppliers or dealers to limit sales over the Internet.

While much of this regulation and conduct has pro-competitive and pro-consumer rationales, the restrictions may impose costs on consumers that, according to some estimates, may exceed $15 billion annually.

Online pharmaceutical sales may be prove to be one of the thorniest areas. The burden of policing online pharmacies primarily falls on the FDA. Under the Food, Drug, and Cosmetic Act (FDCA), the FDA can take action against the importation, sale, or distribution of an adulterated, misbranded, or unapproved drug. The FDA can also take action against illegal promotion of a drug, the sale or dispensing of prescription drugs without a valid prescription, and counterfeit drugs. Prescription drugs include any drug that is habit-forming or has a toxicity or method of use that is potentially harmful.

In addition to the FDA, the FTC enforces consumer protection laws that prohibit unfair or deceptive acts in the marketplace. Applying this power to online pharmacies, the FTC can take action if a website operator makes false or misleading claims about the products or services it provides, including medical consultation in connection with prescribing and dispensing a drug. In the past few years, the FTC has used this power to clamp down on unwarranted Viagra prescriptions.