[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





    A PRESCRIPTION FOR SAFETY: THE NEED FOR H.R. 3880, THE INTERNET 
                    PHARMACY CONSUMER PROTECTION ACT

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 18, 2004

                               __________

                           Serial No. 108-169

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform



                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          ------ ------
PATRICK J. TIBERI, Ohio                          ------
KATHERINE HARRIS, Florida            BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 18, 2004...................................     1
Statement of:
    Hubbard, William K., Associate Commissioner for Policy and 
      Planning, Department of Health and Human Services, 
      accompanied by John M. Taylor III, Associate Commissioner 
      for Regulatory Affairs, Food and Drug Administration.......    23
    Thompson, Dr. James, M.D., president and chief executive 
      officer, Federation of State Medical Boards of the United 
      States; Carmen A. Catizone, executive director/secretary, 
      National Association of Boards of Pharmacy; Jerry W. 
      Kilgore, attorney general, Commonwealth of Virginia; Dr. 
      Rebecca J. Patchin, M.D., trustee, American Medical 
      Association; and John M. Rector, senior vice president of 
      governmental affairs and general counsel, National 
      Community Pharmacists Association..........................    52
Letters, statements, etc., submitted for the record by:
    Catizone, Carmen A., executive director/secretary, National 
      Association of Boards of Pharmacy, prepared statement of...    61
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     3
    Hubbard, William K., Associate Commissioner for Policy and 
      Planning, Department of Health and Human Services, prepared 
      statement of...............................................    25
    Kilgore, Jerry W., attorney general, Commonwealth of 
      Virginia, prepared statement of............................    70
    Maloney, Hon. Carolyn B., a Representative in Congress from 
      the State of New York, prepared statement of...............   110
    Patchin, Dr. Rebecca J., M.D., trustee, American Medical 
      Association, prepared statement of.........................    74
    Rector, John M., senior vice president of governmental 
      affairs and general counsel, National Community Pharmacists 
      Association, prepared statement of.........................    85
    Thompson, Dr. James, M.D., president and chief executive 
      officer, Federation of State Medical Boards of the United 
      States, prepared statement of..............................    55
Waxman, Hon. Henry A., a Representative in Congress from the 
  State of California, information concerning a Web page.........    19

 
    A PRESCRIPTION FOR SAFETY: THE NEED FOR H.R. 3880, THE INTERNET 
                    PHARMACY CONSUMER PROTECTION ACT

                              ----------                              


                        THURSDAY, MARCH 18, 2004

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:17 a.m., in 
room 2154, Rayburn House Office Building, Hon. Tom Davis of 
Virginia (chairman of the committee) presiding.
    Present: Representatives Tom Davis of Virginia, Shays, 
Souder, Ose, Schrock, Duncan, Murphy, Turner, Carter, Harris, 
Waxman, Towns, Clay, Watson, Van Hollen, and Norton.
    Staff present: Melissa Wojciak, staff director; David 
Marin, deputy staff director and director of communications; 
Anne Marie Turner, counsel; Drew Crockett, deputy director of 
communications; Teresa Austin, chief clerk; Brien Beattie, 
deputy clerk; Susie Schulte, professional staff member; Corinne 
Zaccagnini, chief information officer; Phil Barnett, minority 
staff director; Kristin Amerling, minority deputy chief 
counsel; Josh Sharfstein, minority professional staff member; 
Earley Green, minority chief clerk; and Jean Gosa, minority 
assistant clerk.
    Chairman Tom Davis. Good morning. A quorum being present, 
the Committee on Government Reform will come to order.
    I'd like to welcome everybody to today's legislative 
hearing on H.R. 3880, the Internet Pharmacy Consumer Protection 
Act. This hearing will focus on how to curb, through 
legislation, the growing sale of prescription drugs over the 
Internet without a valid prescription.
    Prescription drugs are well regulated in this country by a 
system that includes pre-market approval by the FDA, State 
licensure of health care practitioners who are allowed to 
prescribe and State oversight of pharmacists and pharmacies. 
However, as noted in previous committee hearings and recent 
media reports, the Internet creates an easy environment for 
illegitimate pharmacy Web sites to bypass traditional 
regulations and established safeguards for the sale of 
prescription drugs.
    I think all of us here today have opened our in-boxes to 
find dozens of e-mails advertising medications at low cost with 
no prescriptions required. The risks of this kind of self-
medicating can include adverse reactions from inappropriately 
prescribed medications, dangerous drug interactions, use of 
counterfeit or tainted products and addiction to habit forming 
substances.
    Mr. Waxman and I recently introduced H.R. 3880, because too 
many people are finding ways to obtain medications online 
without valid prescriptions. And regulating those Internet 
pharmacies can be a challenge for Federal and State enforcement 
capabilities. H.R. 3880 amends the Food, Drug and Cosmetic Act 
to address this problem in three steps.
    First, the bill establishes disclosure standards for 
Internet pharmacies. These Web sites are required to display 
certain identifying information, including the name of the 
business, pharmacist and physician associated with the Web 
site. Second, the bill prohibits Internet sites from selling or 
dispensing a prescription drug solely on the basis of an online 
questionnaire. Online medical evaluations don't meet reasonable 
standards of care and create risks for the consumers. And 
third, the bill provides additional authority for States to 
take actions against illegal Internet pharmacies. The bill 
allows States attorneys general to file an injunction in 
Federal court to shut down a rogue site across the country.
    The need for legislation is critical. And I say this as 
someone who is normally more than a little hesitant to regulate 
the Internet or hinder commerce. The illegal diversion and 
abuse of prescription drugs is becoming an increasingly serious 
problem in this country. Last March, several of the witnesses 
who are joining us again today highlighted this problem in 
their testimony and asked for help from Congress. Mr. Waxman 
and I gave it deliberate consideration and responded with 
legislation to help protect consumers and aid Federal and State 
enforcement and regulatory capabilities.
    As we hold this discussion on the legislation today, it's 
important to clarify that H.R. 3880 is intended to tackle 
domestic Internet pharmacies that sell drugs without a valid 
prescription. The bill is not intended to address international 
pharmacies that sell drugs at a low cost to consumers who have 
a valid prescription from their U.S. doctors. Although the 
debate over reimportation is an important one, it's not the 
focus of this hearing.
    I want to thank our ranking member, Henry Waxman, for his 
efforts and leadership on this legislation and his commitment 
to public health. I would also like to thank our witnesses for 
their participation today, and I look forward to their 
testimony. I'm happy to extend a very specific welcome to my 
good friend, Jerry Kilgore, who is the Attorney General of my 
home State of Virginia, who's here today representing the 
National Association of Attorneys General. Jerry, thanks for 
being with us.
    [The prepared statement of Chairman Tom Davis follows:]

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    Chairman Tom Davis. I will now yield to Mr. Waxman for an 
opening statement.
    Mr. Waxman. I'd like to thank Chairman Davis for holding 
this hearing today on how to stop domestic Web sites from 
selling potentially dangerous medications without a valid 
prescription. These Web sites occupy a dark and dangerous 
corner of the U.S. health care system. But they are not hidden. 
A simple e-mail may entice consumers, even children, to order 
potentially dangerous drugs prescribed on the basis of a 
cursory questionnaire by an anonymous physician.
    In fact, just last night, one of my staff members, in 
preparing for the hearing today, received an unsolicited e-mail 
message offering overnight delivery of Viagra. I have a poster 
over there that points out the Web site and that the e-mail was 
linked to. This Web site offers many potentially dangerous 
medications, including some controlled substances. The Web page 
promises ``FDA approved drugs'' and states ``one of our U.S. 
licensed physicians will review your request and issue 
prescriptions for your medication.''
    I would note that the Web page does not state that a 
physician will determine whether this medication is right for 
you. It does require that the user enter all credit card and 
shipping information before any online consultation occurs.
    [The information referred to follows:]

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    Mr. Waxman. The growing number of illegitimate Internet 
pharmacies has alarmed State medical boards. Yet States which 
traditionally have regulated the practice of medicine and 
pharmacy have been frustrated in their ability to shut these 
sites down. One problem is that enforcement efforts are 
complicated. A Web site operator can be in one State, the 
pharmacy in a second State and the prescribing physician in a 
third State. This may bring three different State standards 
into play.
    A second problem is that even when they are successful, 
States typically can only obtain an injunction that keeps an 
illegitimate site from selling to residents of that State 
alone. And a third problem is that some State laws are too 
vague to allow boards of medicine and pharmacy to quickly crack 
down on these illegitimate sites.
    When States cannot solve a national problem, it is 
essential that the Federal Government step in. In this case, 
however, the Department of Health and Human Services has been 
reluctant to venture into an area traditionally handled by the 
States absent clear direction from Congress. It's now time for 
Congress to provide that clear direction. Last year, this 
committee held an investigative hearing examining domestic 
Internet pharmacies. At the hearing, individuals representing 
State and medical pharmacy boards expressed support for 
legislation that would create a Federal definition of valid 
prescription for the purposes of Internet prescribing.
    The Chief of Enforcement at the Food and Drug 
Administration testified that such a standard would assist his 
agency with shutting down illegitimate sites. And the chairman 
of the Federal Trade Commission described a successful model in 
the Federal Telemarketing Sales Act that permits States to work 
with the Federal Government to protect consumers.
    Since that hearing, we've worked together, Chairman Davis 
and I, to craft a narrow, but effective legislative remedy. Our 
bill, H.R. 3880, creates a single national standard for valid 
prescription for Internet prescribing, by barring Web sites 
from arranging prescriptions from doctors who have never seen 
the patients. It also provides that Internet pharmacies make 
basic disclosure of information to consumers, and it allows 
State attorneys general to obtain nationwide injunctions 
against illegal sites, avoiding the need for cumbersome State 
by State enforcement.
    Our philosophy with this bill is that less is more. We have 
aimed to define the minimum Federal standard necessary to 
accomplish our goal, and we have encouraged enforcement by the 
States, the traditional regulators of medicine and pharmacy. 
Our bill does not affect the separate question of reimportation 
of prescription drugs, and it would not alter the practice of 
telemedicine.
    I look forward to hearing from the distinguished witnesses 
today and to working with Chairman Davis and all the members of 
this committee to improve this bill as necessary and move it 
through the Congress. This is a good example of the legislative 
process at its finest. After hearing from the witnesses at our 
first hearing on the matter, we looked at what they had to say, 
we heard what they suggested and we came up with a proposal. 
Now today we'll hear reactions to these proposals. Those 
reactions and the input help us make sure that we're working 
together on a bipartisan basis to make the bill as good as it 
possibly can be to protect the public interests.
    I thank the chairman for setting the tone and working in 
this way so that we can accomplish something that's important 
for the American people.
    Chairman Tom Davis. Thank you, Mr. Waxman.
    Do any other members wish to make statements? The 
gentlelady from the District of Columbia.
    Ms. Norton. Mr. Chairman, I appreciate the way you and 
Ranking Member Waxman have worked together to try to deal with 
this relatively new phenomenon. It is also a new phenomenon in 
our society that prescription drugs are advertised on the 
media. In fact, some of the advertisements are truly laughable. 
After trying to entice you to, in this country I suppose, go to 
your doctor and get a prescription for XYZ drug, then they list 
all the things it will do to hurt you. I guess that's because 
of regulations of the FDA. So they become fodder for the late 
night talk shows, all these miracle drugs are advertised along 
with all the things they could do to harm you, so there will 
not be liability, in case you don't understand that these drugs 
have both good and bad effects.
    But of course, if you go to your doctor, you're going to 
find that out, and you're going to have a professional that 
makes that judgment and advises you accordingly. But the 
Internet has opened up a straight line path between the patient 
and somebody somewhere who in fact will provide this drug that 
perhaps you have seen on television that you think is exactly 
what you need to do what you want, without any expert 
intervention. This, I cannot, first of all, it amazes me that 
this has gone on this long without some action at the Federal 
level. I understand that States have tried to do something 
about this. But this of course cries out for ICC, for the 
commerce clause intervention of the Federal Government.
    I say that I'm surprised that no catastrophe has occurred 
with people ordering these drugs. I'm sure there has. If 
problems have occurred, I can't imagine where the liability 
would lie, or if in fact you would find somebody to sue and sue 
successfully, especially since this goes on across 
international boundaries. This has already gone on much too 
long. We have no way of knowing, no way of knowing how many 
people have been hurt. We do know this is a very enticing 
temptation, particularly when the drugs are advertised on 
legitimate television and you can eliminate some of the 
difficulties, especially with the cost of health care, and 
going to a doctor, by going straight to one of these Web sites 
and perhaps doing yourself great harm.
    Prescription drugs are the true miracle medicine for today, 
because they do so much good, I think the time has come to make 
sure we don't besmirch what these drugs can do by allowing this 
matter to hang out there unattended. I thank you very much 
again, Mr. Chairman, for this hearing.
    Chairman Tom Davis. Thank you. Any other statements?
    If not, we have our first panel. We have Mr. William 
Hubbard, who is here testifying on behalf of the Food and Drug 
Administration. Mr. Hubbard is the Associate Commissioner for 
Policy and Planning. He is accompanied by Mr. John M. Taylor, 
III, the Associate Commissioner for Regulatory Affairs. Mr. 
Taylor will be available to respond to questions posed by 
Members.
    It is the policy of this Committee to swear in all 
witnesses before they testify. Would you stand with me and 
raise your right hands?
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you.
    Mr. Hubbard, your entire statement is a part of the record. 
What we would like you to do is try to keep it to 5 minutes. We 
have a light in front of you, when it turns orange, it means 4 
minutes are up and when it turns red 5 are up, and try to move 
to summary, because our questions are based on your entire 
testimony.
    We welcome you and thank you for being with us. You too, 
Mr. Taylor.

  STATEMENT OF WILLIAM K. HUBBARD, ASSOCIATE COMMISSIONER FOR 
 POLICY AND PLANNING, DEPARTMENT OF HEALTH AND HUMAN SERVICES, 
 ACCOMPANIED BY JOHN M. TAYLOR III, ASSOCIATE COMMISSIONER FOR 
        REGULATORY AFFAIRS, FOOD AND DRUG ADMINISTRATION

    Mr. Hubbard. Thank you, Mr. Chairman. As you say, I do have 
a written testimony.
    I will just make a few brief remarks. We thank the 
committee for holding this hearing. We believe you are 
recognizing a significant public health threat from unregulated 
Internet sites. The Internet sales of drugs are a wonderful 
tool for pharmacists and patients and physicians to use. 
However, only when they're properly operated and regulated, and 
as you are pointing out, many of these are not.
    The public health threat, we believe, is real when patients 
unknowingly purchase these drugs from unknown Web sites. And 
the disclosure concept that you have recognized we believe is 
an important one.
    We appreciate that the committee is trying to identify some 
solutions to this problem, who and where these sites are, 
whether they are licensed, whether they use one of these 
dubious questionnaires. The concept of the intermediary is 
clearly very important in the prescribing of drugs, and these 
sites often do skirt that.
    FDA often monitors the Internet, and one of the sites that 
we've just noticed very recently I'd like to point out to the 
committee, if I could ask the clerk to bring it up to the 
Chair. This site is quite interesting, because we believe it is 
emblematic of some of the things that your bill is attempting 
to do and the committee is recognizing.
    As speakers on the committee pointed out, many Americans 
get e-mails offering to sell prescription drugs. This 
particular site, and there's a poster of it over here against 
the wall, offers to sell generic drugs. These particular 
generic drugs or alleged generic drugs do not have generic 
versions. So we decided to investigate that a bit more.
    So we did a check on the location of the actual Internet 
site and found that it was in China, in Xiandong Province, 
China. We thought they might be selling Chinese counterfeits. 
So we actually made a purchase. When the drug arrived, as 
you'll see on the envelope there, it has a return address of 
Miami, FL. Yet the postmark, you may notice, is Dallas, TX. 
Then there's a return address, if someone needs to reorder, in 
the package that suggests that the person should contact 
someone in the country of Belize. Then there's an 800 number 
which we called, and the person there said they were located in 
the United States. When we called back a second time, they said 
they were in Belize.
    We ordered three drugs, Ambien, a controlled substance, 
it's a sleep aid, Viagra and Lipitor. And we noted on the so-
called online questionnaire that we were taking erythromycin. 
Erythromycin is a drug that's contraindicated for Lipitor. So 
here you have the kind of situation the committee is pointing 
out, you've got a so-called questionnaire in which the patient 
has a consultation with some potential physician in another 
country, and you've got a lack of disclosure, and in fact, this 
site has so many convoluted potential sources that we don't 
know where it is.
    So the disclosure concept that is embodied in the bill we 
believe would address these sorts of issues of the sites not 
being where anyone knows about, and allowing people to buy or 
get a drug that has no true prescription with it, there's not 
really a doctor at the other end that sees the patient, 
diagnoses the patient and makes a rational prescription for the 
patient.
    So with that, Mr. Taylor and I will be happy to take 
questions.
    [The prepared statement of Mr. Hubbard follows:]

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    Chairman Tom Davis. Thank you very much. I apologize, the 
vice president was on the phone and I had to have Ms. Harris 
ably take the Chair while I was there. I apologize for leaving 
in the middle of your testimony. I did read it last night, 
though.
    Let me start the questioning. Historically, States have 
been the primary enforcement authority with respect to the 
practice of medicine and the dispensing of prescription drugs. 
How do you find that appropriate balance? And of course, the 
Internet raises a whole new paradigm for us in terms of how you 
do this, because it's so ubiquitous.
    Mr. Hubbard. And many people have pointed out, because the 
Internet crosses State lines, it's more difficult for States to 
enforce in these kinds of cases you have pointed out. Congress 
has given FDA the authority to regulate the practice of 
medicine in only one case that I'm familiar with. And the FDA 
itself has been reluctant to step into the regulation of the 
practice of medicine, which has been a State responsibility. 
Here you are identifying the potential need, perhaps, to take 
one more step into that with the definition of a valid 
prescription. And we certainly understand your thinking in 
doing so.
    Chairman Tom Davis. Both the AMA and the FSMB have 
guidelines that stipulate an appropriate medical relationship 
between the patient and physician must exist before a 
prescription is written and dispensed. AMA and the FSMB define 
this relationship to include a documented patient evaluation, 
including medical history and a physical examination.
    Do you agree these recommendations are also consistent with 
the language in H.R. 3880?
    Mr. Hubbard. I believe they are, Mr. Chairman.
    Chairman Tom Davis. Mr. Taylor, do you agree with that, 
too?
    Mr. Taylor. Yes.
    Chairman Tom Davis. Mr. Taylor, at the hearing last March, 
you stated that a Federal standard for what constitutes a valid 
prescription would aid enforcement capabilities. Are you still 
of that opinion?
    Mr. Taylor. I did acknowledge that. To put it in context, I 
think what I said last year was, a part of the complementary 
enforcement role of the States and Federal Government, we were 
often relying upon the State medical boards or boards of 
pharmacy to inform us what the proper standard of medical care 
is within a particular State. So when we're building a case and 
there are differences from State to State, that raises some 
challenges, absolutely.
    Chairman Tom Davis. FDA has indicated, in your testimony, 
that it has the legal authority to take action against the sale 
of dispensing a prescription drug without a valid prescription. 
How often has the FDA used this authority to take action 
against rogue Internet pharmacy sites?
    Mr. Taylor. I can give you a recent example. Yesterday, we 
announced that we had brought indictment against an Internet 
pharmacy site, where indeed one of the charges was the fact 
that the product was being dispensed in a manner that was 
outside the proper standard of care, standard of medical care 
and the standard of pharmacy in that particular State.
    It's often an element of our criminal cases, what we will 
do is consult with the States, figure out what the standard is 
within that State and make that one of the charges. What we've 
seen in many cases, especially two recent criminal cases, is 
that there often have been attempts by those who have been 
indicted to either hide the identity of those physicians that 
are supposed to be giving proper care, or misrepresenting the 
fact that they are licensed within a State, when in actuality 
they are not.
    So it's often a component of the cases that we bring.
    Mr. Hubbard. And Mr. Chairman, while we can do in some 
States that have explicit laws, there are many, many States, in 
fact the majority of States, where the State law does not 
explicitly define it in a way that FDA can use its authority.
    Chairman Tom Davis. Mr. Taylor, also in the March hearing, 
you noted that you couldn't name a single State that qualifies 
the use of an online questionnaire as a legitimate or 
appropriate medical relationship. Do you agree that online 
medical questionnaires don't constitute an adequate or 
appropriate medical relationship?
    Mr. Taylor. Let me refine that answer. I'm aware of 
approximately 27 States that generally disallow Internet 
prescribing. I think 7 of those States do so by explicit 
statute, I think 12 do so based on medical board policy, and 
another 8 do so based on medical board rulings. There are 
another 13 States that have chosen to make a determination that 
Internet prescribing is impermissible.
    So now there are approximately 40 States that have taken a 
position that there is some means as to what constitutes proper 
Internet prescribing, and an online questionnaire falls outside 
that arena. Mr. Chairman, one of the things that's changed in 
the 5 years that we've been dealing with the Internet is the 
fact that both on the Federal Government level and the State 
government level, our statutes did not, quite frankly did not 
contemplate this type of practice.
    As time has gone by, the States have taken steps to address 
it expressly through the medical boards and through their 
boards of pharmacy. That's why today we have 40 States that 
have taken some stance. That has obviously enhanced our 
enforcement efforts on the Federal level, too. So things have 
changed a little since last year.
    Chairman Tom Davis. AMA's testimony today highlights the 
need for something to be done at the Federal level to address 
the myriad problems associated with the illegal use of Internet 
pharmacies. Do you agree with them?
    Mr. Taylor. Well, I mean, traditionally the regulation of, 
or what constitutes a proper medical standard or what 
constitutes a proper or valid prescription is something that 
has resided at the State level. I think to the extent that 
there is going to be any change in that position, it needs to 
be done very carefully.
    Chairman Tom Davis. OK. Thank you very much.
    Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Hubbard, in your written testimony today, you expressed 
FDA's concern about the proliferation of sites that substitute 
a simple online questionnaire for a face to face examination 
and patient supervision by a health care practitioner. Let's 
assume for the moment that some of these Web sites employ 
licensed physicians to write the prescription on the basis of 
the questionnaire.
    When assessing whether these prescriptions are valid, does 
FDA rely on a single Federal definition or defer to the States?
    Mr. Hubbard. We defer to the States.
    Mr. Waxman. Are all State definitions alike?
    Mr. Hubbard. No, they are not, Mr. Waxman.
    Mr. Waxman. Do the varying definitions complicate 
enforcement actions?
    Mr. Hubbard. No question.
    Mr. Waxman. H.R. 3880 would solve this problem by creating 
a single national standard for what is a valid prescription 
related to Internet pharmacies. We're going to hear from the 
Virginia State Attorney General on behalf of the National 
Association of Attorneys General and the Federation of State 
Medical Boards and the National Association of Board of 
Pharmacy are going to endorse such a standard.
    Why do you think these key State organizations support 
having a single Federal standard for prescription related to 
Internet prescribing?
    Mr. Hubbard. When the Internet emerged as a tool of this 
nature, drug prescribing became obvious at that time. I believe 
the States thought they could, using their existing authority 
over physicians and pharmacies, appropriately regulate these 
businesses.
    They realized fairly quickly, I think by the year 2000, 
that because these sites would be located in one State but the 
patient in another that they would be unable to do so, and you 
needed, in their view, and I believe they will express that for 
themselves, as I understand it, they expressed the view that 
you needed some sort of a more uniform national standard. I 
believe they are supportive of that today.
    Mr. Waxman. So it seems that a single national standard is 
needed to address these rogue Web sites?
    Mr. Hubbard. It's certainly their opinion.
    Mr. Waxman. Our legislation provides this standard, while 
maintaining the key enforcement role for the States, as you 
well know. Thank you very much for your testimony, both of you, 
and thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much. Mr. Shays.
    Mr. Shays. I'll pass, thank you, Mr. Chairman.
    Chairman Tom Davis. Any other questions on this side? The 
gentleman from Tennessee.
    Mr. Duncan. Mr. Hubbard, as the chairman pointed out in his 
first question, the primary enforcement role for prescribing 
drugs is up to the States. But of course, the Internet does not 
recognize State lines or moves across State lines, so it's a 
difficult thing for States to enforce this totally.
    I'm just curious, how fast are these Internet prescriptions 
growing? Do we have any estimate of that? All the articles you 
read, they say it's growing very fast. But I just wondered if 
you have any statistics of how many prescriptions are being 
issued over the Internet now.
    Mr. Hubbard. There's no certainty here. There are clearly 
estimates made by various groups. I think the National 
Association of Boards of Pharmacy has recognized at least 200. 
There are many more foreign sites. We did a computer search 
just last week for one particular set from one country, and 
this is the list. There's well over 1,000 here. And that's just 
one locality. So worldwide, there may be----
    Mr. Duncan. Is that 1,000 prescriptions?
    Mr. Hubbard. It's 1,000 different Web sites offering to 
sell drugs in the kinds of ways that the committee is 
recognizing.
    Mr. Duncan. I see. And do you know of instances where 
children have been getting these drugs over the Internet? Have 
you heard about that?
    Mr. Hubbard. Certainly there are drugs that children used 
being prescribed. There's a wide, wide range of drugs being 
prescribed. Some sites limit themselves to just a few lifestyle 
drugs like Viagra, but many sites sell a list of hundreds of 
different drugs.
    Mr. Duncan. Have you been getting reports of people who 
have been injured or been hurt or made sick or have been ripped 
off by these prescriptions?
    Mr. Hubbard. We do have reports. Unfortunately, they are 
relatively sporadic. They depend on a patient who's injured 
reporting to us. There's no good system for tracking some of 
these drugs that are sold illegally. Because the medical system 
is designed to track systems that are properly prescribed and 
dispensed by licensed pharmacies in the United States.
    Mr. Duncan. I know it's difficult, but have you had 100 
instances or 1,000?
    Mr. Taylor. I can't give you a number, but I can give you a 
tangible example. Last summer, and the agency is continuing to 
investigate this, but last summer we had to assist in the 
recalling of over 200,000 bottles of Lipitor, because we 
discovered that it had been counterfeit. Obviously the 
benefit----
    Mr. Duncan. Where was that?
    Mr. Taylor. I'm sorry?
    Mr. Duncan. Where was that you recalled----
    Mr. Taylor. Actually, by the time the recall was finished, 
the counterfeit Lipitor had spread throughout the country. In 
some cases it was available through a brick and mortar 
pharmacy, but in other cases it was available over the 
Internet. The reason I used it as an example is because 
obviously the benefit of Lipitor is its cholesterol lowering 
properties. And one of the----
    Mr. Duncan. Was that Lipitor being sold by one Internet 
site or many?
    Mr. Taylor. It's not clear how many sites it was sold over, 
but we did get consumer complaints suggesting that it was at 
least sold over two. What happened is when we put out the 
original talk paper warning the public about the fact that we 
had discovered this product, we began to get reports from 
people. A couple of people reported purchasing it over the 
Internet.
    So I don't know how many Internet sites it was available 
at, but that's a tangible situation where someone was 
purchasing a product thinking they were getting cholesterol 
lowering properties, and because of the nature of the product, 
not only were they not necessarily getting the cholesterol 
lowering properties, you could argue that indeed they were 
being ripped off, because they were paying for something that 
they didn't actually get.
    Mr. Hubbard. Let me give you an example, Mr. Duncan. I've 
got one site here, there are 400 different Web sites, when we 
checked them, they are all the same business. The same 
individual runs them, from a small New England town. But they 
all have different names, and they're targeted at citizens in 
different countries, Houston, Phoenix, wherever. So the citizen 
thinks that's a local business in his hometown selling legal 
American drugs. In fact, it's one business in New England 
saying 400 times in 400 cities, we're legitimate, we're legal 
and we'll give you a drug if you'll fill out a questionnaire.
    Mr. Duncan. OK, well, thank you very much.
    Mr. Hubbard. You're welcome.
    Chairman Tom Davis. Thank you very much. Ms. Watson, any 
questions?
    Ms. Watson. I'm waiting on a copy of the bill, Mr. 
Chairman. But in the bill, this is a question to the Chair, 
does it require a legitimate prescription from the doctor and 
how is that checked out? You send this, if there's a 
requirement by the company, you send that in, how do they check 
it out to be sure it's valid?
    Chairman Tom Davis. A valid prescription is required to 
exist. But we go further to define an adequate medical 
relationship, so that the person who is prescribing it has done 
an appropriate examination and taken the history and has had a 
meeting with the person, as opposed to calling up and a doctor 
just writing a prescription because you're willing to pay 
money. That's what's critical in these cases. A lot of these 
Web sites have people who will sign prescriptions but they know 
nothing about the people who are taking the drugs, what they're 
interacting with, and that's where the danger occurs.
    Ms. Watson. Let me ask Mr. Hubbard, certainly each State 
differs from the other. What would be the standard positions 
that you would like to see in a piece of legislation that would 
be able to monitor the abuse of the Internet prescriptions?
    Mr. Hubbard. As Chairman Davis said, FDA has a requirement 
that there be a valid prescription. That's Federal law.
    Ms. Watson. Yes.
    Mr. Hubbard. But then FDA relies upon each State to 
determine whether a given prescription in that State is valid.
    Ms. Watson. Who's the watchdog?
    Mr. Hubbard. Well, in the case of prescriptions, it's 
actually the State medical boards and pharmacy boards, not the 
FDA. Federal law does have a requirement that there be a valid 
prescription, but each State then determines what that is.
    Ms. Watson. Question to the Chair, I haven't read the 
legislation yet. But is there a requirement that each State 
indicate who the watchdog agency is and what they watch for?
    Mr. Hubbard. I believe it's very clear, Ms. Watson, that 
the State pharmacy and medical boards have that responsibility. 
They accept that responsibility. But what they're saying is 
that they can't utilize their law if the Web site is in another 
State, because they can't prosecute across State lines.
    Ms. Watson. So how do we at the Federal level get to that 
issue? That's the crux of this question, and maybe this is to 
the author.
    Chairman Tom Davis. What happens in this case is we define 
an appropriate medical relationship. That's where this stuff 
goes afoul. They can produce a doctor's note on this, a 
doctor's prescription, but there's no relationship. It's almost 
like an auto pen. There is no appropriate medical relationship, 
as we define the appropriate medical relationship. It would be 
up to the State and their enforcement actions to go there, and 
the burden would be on the people who are dispensing this to 
prove they had the relationship, which of course they don't, in 
many of these cases.
    Ms. Watson. Who oversees that, the FDA? Or the State 
attorney general?
    Mr. Taylor. Just to give you an example, there have 
certainly been instances where more than one State has 
recognized behavior that they deemed to be problematic. What 
the States have been able to do is bring some type of action 
that is confined to their State boundaries. But what we've also 
tried to do is work closely with them so that we, the Federal 
Government, could bring a case that is more global in nature 
and is complementary to the case that the State is bringing, so 
there's a more comprehensive approach to dealing with 
problematic conduct that might be going beyond State lines.
    So there is a way to do it.
    Chairman Tom Davis. Let me try to help you. Our bill 
allows, the new enforcement authority that we give in this case 
is modeled on the Federal Telemarketing Sales Act. So we have 
an appropriate Federal model on this. That allows the State 
attorney general to shut down a rogue site across the country 
rather than only bar sales to customers or consumers in his or 
her State.
    Ms. Watson. If the Internet shows a location down in 
Central America for controlled drugs, who then is--I see 
somebody shaking their head--who then is in charge of 
overseeing that on the Internet?
    Mr. Taylor. For controlled substances the Drug Enforcement 
Administration has primarily jurisdiction over controlled 
substances. However, the FDA and the States will often work, 
again with DEA, to help bring cases if we determine that those 
products that are being marketed through the Web site that's 
listed in Central America are actually making their way to the 
United States.
    Ms. Watson. May I ask who determines that? How is it 
triggered? How does the process start?
    Mr. Taylor. Usually it's triggered based on the working 
relationships that we've established over the years. We've been 
at this for about 4 or 5 years. We recognized fairly early on 
that none of us quite frankly had either the resources or the 
expertise to do it ourselves. So over the last 4 or 5 years, 
we've tried to work closely with both our Federal and State 
partners that we could work together on a real time basis to 
address these situations when they come to our attention.
    So it's really through our partnerships and working 
relationships. And over time, they've proved to be quite 
successful. So that's usually how it's done.
    Chairman Tom Davis. Thank you. Time has expired. Thank you 
very much.
    The gentleman from Connecticut, Mr. Shays.
    Mr. Shays. Thank you, Mr. Chairman.
    Mr. Chairman, thank you and Mr. Waxman for highlighting 
this issue, thank you for having this hearing, thank you for 
coming forward with the legislation that we can consider. In my 
earlier life I used to chair the subcommittee of this full 
committee that oversaw the FDA. And I appreciate so much what 
FDA has to contend with.
    At the same time, I do have some issues that I want to ask. 
We talk about the questionnaire that has to be filled out for 
the Web site. I sent a questionnaire to my constituents. And I 
had one where I gave a statement, I said strongly agree, 
somewhat agree, no opinion, somewhat disagree, strongly 
disagree. This was the statement. Americans should be able to 
import less costly FDA approved prescription drugs from Canada.
    I had an intuitive sense that they would probably agree; 
62.7 percent strongly agree, 20.4 percent agree, 83.1 percent 
of my constituents believe that they should be able to import 
less costly FDA approved prescription drugs from Canada. Does 
that statistic surprise you?
    Mr. Hubbard. Not at all.
    Ms. Shays. The issue is, that's illegal right now?
    Mr. Hubbard. Absolutely.
    Ms. Shays. Constituents are doing it, correct?
    Mr. Hubbard. Absolutely.
    Mr. Shays. I'm told the drug companies have basically 
exported to Canada or allowed to come into Canada basically 
seven times what Canada consumes, and it's a growing market. 
How would you begin to even reign in this illegal activity in 
Canada? Not that I even know if I want you to, frankly. I'm 
having to deal with it.
    Mr. Hubbard. We cannot, under current law. The current law 
was established for FDA to inspect a very large volume of an 
imported drug, say, millions of pills that Pfizer might bring 
in from a plant in Ireland. And that process worked very well. 
But when individuals buy these small 60 or 90 day supplies, and 
it comes in huge quantities to the mail facilities in this 
country, neither the Postal Service nor Customs nor the DEA nor 
FDA can in any rational way look at all those products and make 
any judgments about whether they're good or not.
    Mr. Shays. Who's breaking the law? Is Canada breaking the 
law in exporting them, or are my constituents breaking the law 
when they buy them?
    Mr. Hubbard. It may be a violation of Canadian law, but 
that is would be for them to determine. The drugs themselves 
are clearly illegal. FDA, though, has never taken enforcement 
action----
    Mr. Shays. But listen to my question. My question is, who's 
breaking the law in the United States?
    Mr. Hubbard. On some technical level you could argue that 
the patient is breaking the law by buying those drugs, but the 
FDA has never attempted to punish a patient for buying drugs.
    Mr. Shays. So the reality is, whatever we do, we still have 
that issue out there?
    Mr. Hubbard. The implication issue, as the chairman said at 
the outset, will still be there.
    Mr. Shays. And we need to bring some census, both here and 
overseas. But what I'm wrestling with is, I happen to believe 
that people should be able to import drugs if they're FDA 
approved. And what I also wonder about is, these aren't drugs 
necessarily made in the United States then sent to Canada, 
they're sometimes made elsewhere and sent to Canada, just as 
they would be sent to the United States.
    Tell me the logic of why my constituents shouldn't be 
allowed to buy the same drug, and if they can buy it overseas 
for less, why they shouldn't be able to?
    Mr. Hubbard. Because, Mr. Shays, the assumption people make 
that those drugs are all U.S. made, high quality drugs, just 
coming back, is wrong in our view.
    Mr. Shays. Does it matter if it's U.S. made? But they make 
an assumption that the drugs they buy here are U.S. made, and 
they are. So I don't get your point.
    Mr. Hubbard. If you buy a drug here, it's been made in an 
FDA inspected facility under very strict FDA manufacturing 
controls. These foreign drugs in many cases do not meet those 
criteria. So that's the problem. The patient can't make a 
determination whether they're getting that U.S. made drug you 
describe or the other drug.
    Mr. Shays. Do we have statistics that tell us that the 
drugs they're buying from Canada are mostly not FDA approved?
    Mr. Hubbard. Mr. Taylor can describe a process of screening 
these shipments. He's done two of those recently that found the 
vast majority of these actual shipments from Canada are not FDA 
approved drugs.
    Mr. Shays. OK. So just tell me the statistics. I don't need 
to know the process.
    Mr. Taylor. Sir, I'm not sure we have good statistics. 
We've tried to determine the percentage, as have others. But 
the bottom line is that we do believe that as demand here 
increases, or at least our fear is that as demand here in the 
United States increases, that the Canadian pharmacies that we 
now see will get their product from sources that are less 
reputable than the sources----
    Mr. Shays. But you're not listening to my question. My 
question is, do you have statistics that say that the vast 
majority of the drugs, you're saying it, but you're not 
giving----
    Mr. Hubbard. We have sampling statistics, yes.
    Mr. Shays. What is the statistic, that 90 percent, 50 
percent, 20 percent, 80 percent, what is it?
    Mr. Hubbard. Well, it's certainly over 90----
    Mr. Shays. No, no, wait, wait----
    Mr. Taylor. What the blitz showed was that 70 to 90 percent 
of the products that were being imported were unapproved. We do 
not have data----
    Mr. Shays. Unapproved means not FDA approved?
    Mr. Taylor. Correct. But we do not have data that tells us 
how much of the product is manufactured in Canada versus 
manufactured in England versus manufactured in Asia.
    Mr. Shays. Let me just finish this by just making a 
comment. I know my light is on. This is hugely important, that 
people buy drugs actually need the drugs they buy and have been 
shown by a medical professional to need them. My only point is 
that we're saying this isn't illegal, this is illegal from the 
United States, but we're not enforcing it. And you have 
ambivalence in Congress on this law. This is a huge, gigantic 
issue that's just only going to get bigger.
    With all due respect to your work, we don't have 
statistics. We're making claims that we can't back up with 
statistics.
    Mr. Taylor. May I respond, sir?
    Mr. Shays. Sure.
    Mr. Taylor. We do not have statistics, but we certainly 
have tangible information. For example, your first question 
relating to what you should tell your constituents or why your 
constituents should be concerned about purchasing products over 
the Internet, 3 weeks ago, and I know this isn't about the----
    Mr. Shays. Can I tell you this? I don't want to keep--my 
red light is on. But your bottom line is you don't have 
statistics right now. If I have a second round I would be happy 
to get more information.
    Chairman Tom Davis. Let me just note again, I mean, this is 
an important issue. But the bill really tackles domestic 
Internet pharmacies. We don't really go after the other.
    Mr. Taylor. That's right. My point was that someone 
purchased contraceptive patches over an Internet site that she 
thought was a U.S. Internet site. In actuality, she received 
contraceptive patches that had no active ingredient in them. By 
the time we completed--and we're not done with our criminal 
investigation yet--but by the time we completed that 
investigation, sir, the origin of those patches turned out to 
be India. We had to actually track through about five or six 
different sites to determine the origin of the product.
    So my only point is that the reason why people need to be 
concerned is that even though it appears that you're getting an 
FDA approved product, we do have tangible examples of where 
people have not received what they wished or hoped that they 
had purchased. And it was a consumer complaint by this 
particular consumer that led us to the discovery. What we did 
is we warned consumers to beware of other products purchased on 
these sites.
    We were not saying that all sites are bad, but we had 
tangible proof that these were problematic sites and we warned 
the public that they needed to be careful and talk and consult 
with their health care practitioner when making a decision 
whether or not to purchase over some of these sites.
    Chairman Tom Davis. Thank you.
    Let me just ask if any other Members have questions for 
this panel. Mr. Murphy.
    Mr. Murphy. Thank you, Mr. Chairman. I also compliment you 
and Mr. Waxman for moving forward on this important 
legislation. This is rather urgent, because it is such a major 
issue with regard to abuse and use of the system for doing 
this.
    I want to ask a couple of things. First of all, the 
physicians who are involved with prescribing these drugs at the 
other end of the Web site, in some cases they may not be 
physicians at all, and in some cases, from other State or other 
countries, they're not open to any liability at all if they 
mis-prescribe, if they do not take an accurate history, they're 
not open to any liability, am I correct in that?
    Mr. Hubbard. The next panel may be better set to answer 
that question. But certainly we have pointed out that liability 
concerns must exist here in these cases, because you've got 
people doing things that are either outside the law or not 
proper medical practice.
    Mr. Taylor. And sir, if we can determine that those 
physicians are a part of a criminal conspiracy, because in some 
cases, the physicians have an agreement with the Internet 
pharmacy that's supplying those products, we do include them as 
part of the defendants in our criminal cases. So they do incur 
some criminal liability.
    Mr. Murphy. Another question I have with regard to FDA, is 
there any requirement for pharmaceutical manufacturers to only 
sell prescription medication to legitimate distributors who 
will ascribe to some sort of other laws or code of ethics with 
regard to how those medications will be distributed?
    Mr. Hubbard. Well, in fact, we've been working with the 
wholesalers and distributors and manufacturers this year to set 
up standards by which wholesalers will assure, and 
manufacturers can assure that they are selling to legitimate 
wholesalers and that the proper questions get asked about where 
the drug came from. There are some instances in which 
wholesalers will buy from somewhat fly by night sellers of 
drugs who offer a deep discount. And that is a way for 
counterfeit drugs to get into the system.
    Mr. Murphy. There is something I want to bring to the 
committee's attention, too, another important aspect of this, 
and that has to do with, even when a physician has face to face 
contact with a patient, particularly the elderly, there was a 
recent CDC study, the National Ambulatory Medical Care Survey 
did a study in which they reported that at least one drug 
considered inappropriate by experts was prescribed at 7.8 
percent of elderly patient visits. That's some 16 million 
visits a year. This one drug classified as never or rarely 
appropriate was prescribed nearly 4 percent of the time.
    There's a massive amount of medication errors that occur, 
even when a physician is face to face with an elderly patient. 
When I look at the charts here of what is available online, 
particularly some of the anti-depression and pain relief drugs 
that may have side effects, such as dizziness, etc., nothing is 
more fearful to an elderly person than falling down, having a 
hip injury, being hospitalized and having subsequent problems 
with that.
    I cannot possibly imagine a scenario by which someone would 
be self-prescribing these things in any sort of a way that's 
actually good for their health. I understand situations in 
which a patient is seeing a physician and has received a 
prescription from a physician, a legitimate physician in their 
area. But I do worry about people self-prescribing, and that is 
a huge concern. Relatives may say, let's help Mom or let's help 
Grandma. Here is something that we know helped someone else, 
let's pursue that.
    The consequences can be extremely harmful and deadly. Some 
1 in 8 emergency room visits in this country are medication 
errors; 1 in 12 hospital admissions are related to medication 
errors. And those are when patients are seeing physicians.
    So moving forward on legislation such as this is extremely 
important. However, under the circumstances where a person is 
seeing a physician it's helpful. But under the circumstances 
where someone is still trying to self-prescribe or obtain drugs 
in unscrupulous manners and use that, I'm very, very worried 
that there's almost nothing we can do to prevent that. Am I 
correct?
    Mr. Hubbard. You're absolutely correct, Mr. Murphy. Someone 
could say on one of these questionnaires, I have hypertension, 
high blood pressure, when in fact they have hypotension, low 
blood pressure. And they could order exactly the wrong drug, 
because the patient is making that decision without the 
doctor's involvement. Because we don't believe in many cases 
there is a doctor at the other end, and they certainly don't 
seem to be asking the right questions of the patient, and 
they're certainly not meeting and seeing the patient and 
checking their blood pressure and all that.
    So you're absolutely right. This is a problem that needs to 
be fixed.
    Mr. Murphy. On these, do they know the other medication the 
patient may be on?
    Mr. Hubbard. It purports to ask some of those questions----
    Mr. Murphy. But they may not know them all, because 
patients themselves may not know.
    Mr. Hubbard. One of the things we did here, we ordered a 
drug that is contraindicated to be taken with a different drug 
called erythromycin. So we said that on the questionnaire, we 
said, I'm taking erythromycin, and we ordered Lipitor. They 
sent the Lipitor anyway.
    So it appears they didn't even bother to read the 
questionnaire. It appears in some cases these questionnaires 
are merely there as a facade anyway.
    Mr. Taylor. And just to add to that, I think we need to 
keep in mind there are also different types of questionnaires. 
There are some questionnaires that are basically all filled in 
for you, all you have to do is insert your name and your 
address, and that's it. There are other questionnaires that 
ostensibly pretend to get all the relevant information, but at 
the end of the day, as you noted, because there isn't really 
the proper health care practitioner-patient interaction, you're 
absolutely right, that there might be critical information that 
should be gleaned from the patient that is not done. That puts 
the patient at potential harm.
    Mr. Murphy. My hope is we continue on with these hearings 
and move forward with this legislation, that Americans will pay 
attention to the idea that seeing a physician face to face has 
some room for medication error there alone. Self-prescribing 
and going to sites that are illegitimate is downright dangerous 
and deadly, and people have to avoid those sorts of sites, 
because that is something that is going to end up killing and 
harming a lot of Americans. Thank you.
    Mr. Hubbard. We agree, Mr. Murphy.
    Chairman Tom Davis. Thank you. Are there any other 
members--Mr. Carter, any questions? No other questions. I don't 
have any others. Mr. Shays, did you want to ask a followup?
    Mr. Shays. If someone is sent a drug that they didn't have 
a prescription for and they were to become ill or die, could 
the pharmaceutical or the Internet organization be found 
guilty?
    Chairman Tom Davis. If you can find them.
    Mr. Hubbard. I think you're talking about a tort liability 
question. We certainly have raised those questions in the case 
of some businesses that are promoting these. It's not really an 
FDA question. But one would assume that there would be some 
liability there.
    Mr. Shays. I'm struck by the fact that this is so stunning 
that I didn't know, I mean, not that many of us didn't know, 
but I'm astounded that I didn't know that you could get 
something without having some kind of prescription. It tells me 
frankly that you all have a responsibility as well. The mere 
fact that I asked you a question about that issue, it would 
seem to me that FDA needs to be much more proactive.
    And they're going to have to, I think, sort out, rather 
than saying, you know, what's happening in Canada is illegal, 
but it's still going to continue. I happen to want to make it 
legal. I don't like people breaking the law, but I want to make 
it legal in a way that works. But I want to do what the 
chairman wants to do. And I just appreciate that he's made this 
an issue that we need to be more aware of.
    But I'm saying as well, I think you all have a 
responsibility to be a lot more proactive on this.
    Mr. Hubbard. Fair enough, sir.
    Chairman Tom Davis. Thank you. Let me thank this panel very 
much. We appreciate your questions. Obviously when we get you 
up here we're going to ask you a lot of things that Members 
have questions about. But that's not new to you.
    Mr. Hubbard. Thank you, Mr. Chairman.
    Chairman Tom Davis. We appreciate your insights on the 
bill. Thank you very much.
    We're going to move to our second panel. We have Dr. Jim 
Thompson, of the Federation of State Medical Boards; Dr. Carmen 
Catizone, of the National Association of Boards of Pharmacy; 
Virginia Attorney General Jerry Kilgore; Dr. Rebecca Patchin of 
the American Medical Association; and representing the National 
Community Pharmacists Association, Mr. John Rector.
    We may have votes, we're going to try to get through 
everybody's testimony, we may have votes and have to take a 
brief recess in between. I hope everybody's time can 
accommodate that. But I will swear everybody in and we'll start 
the testimony and get as far as we can before we have votes.
    Please rise with me and raise your right hands.
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you very much.
    Dr. Thompson, we'll start with you and move straight down.

  STATEMENTS OF DR. JAMES THOMPSON, M.D., PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, FEDERATION OF STATE MEDICAL BOARDS OF THE 
     UNITED STATES; CARMEN A. CATIZONE, EXECUTIVE DIRECTOR/
SECRETARY, NATIONAL ASSOCIATION OF BOARDS OF PHARMACY; JERRY W. 
   KILGORE, ATTORNEY GENERAL, COMMONWEALTH OF VIRGINIA; DR. 
      REBECCA J. PATCHIN, M.D., TRUSTEE, AMERICAN MEDICAL 
   ASSOCIATION; AND JOHN M. RECTOR, SENIOR VICE PRESIDENT OF 
 GOVERNMENTAL AFFAIRS AND GENERAL COUNSEL, NATIONAL COMMUNITY 
                    PHARMACISTS ASSOCIATION

    Dr. Thompson. Thank you and good morning to members of the 
committee.
    I'm Dr. James Thompson, I'm president and CEO of the 
Federation of State Medical Boards of the United States. The 
Federation is a national, non-profit association established in 
1912 which serves as a collective voice for its 70 member State 
medical licensing and disciplinary boards. The Federation's 
primary mission is to improve the quality, safety and integrity 
of health care by promoting high standards for physician 
licensure and practice, as well as supporting and assisting 
State medical boards and the protection of the public.
    As I indicated at the hearing this committee held in March 
2003, the Federation has been actively involved as a national 
leader in the use of telecommunications and the Internet in the 
practice of medicine for a number of years. In 1996, the 
Federation published a model act to regulate the practice of 
medicine across State lines. In 2000, it published guidelines 
for Internet prescribing. In 2002, it published model 
guidelines for the appropriate use of the Internet in medical 
practice, one of the first national standards established for 
Internet medical practice.
    Those guidelines which the Federation recommends be adopted 
by State medical boards include a key provision, and I'll quote 
from that provision, a documented patient evaluation, including 
history and physical evaluation adequate to establish diagnoses 
and identify underlying conditions and/or contraindications to 
the treatment recommended and provided must be obtained prior 
to providing treatment, including issuing prescriptions 
electronically or otherwise.
    This has been the key interest of the Federation with 
respect to Internet pharmacies. There must be an appropriate 
relationship between the patient and the physician before a 
prescription is written and medication dispensed. In addition 
to issuing these guidelines, the Federation has aggressively 
sought to identify Internet pharmacies that are dispensing 
drugs on the basis of prescriptions written by health care 
providers whose relationship with the patient does not appear 
to meet minimal standards.
    In September 2000, the Federation of State Medical Boards 
established the national clearinghouse on Internet prescribing 
to collect and disseminate information on rogue Internet sites 
offering prescribing and dispensing services for prescription 
drugs to consumers. The clearinghouse is uniquely qualified to 
coordinate information between regulatory and enforcement 
entities because of its formal relationship with all the State 
medical boards in the United States and its territories and its 
well established lines of communication with State and Federal 
regulatory agencies, including the Department of Justice, the 
Drug Enforcement Agency, the Food and Drug Administration and 
the Federal Trade Commission, as well as the National 
Association of Boards of Pharmacies, the National Association 
of Drug Diversion Investigators and the National Association of 
Attorneys General, representatives of the pharmaceutical 
industry and the media.
    To date, approximately 12 physicians have been the subject 
of disciplinary action actions based on clearinghouse supplied 
information. The clearinghouse has supplied information for 
more than 127 cases at the Federal level and more than 200 
cases on the State level. Additionally, information regarding 
Internet prescribing has been shared with the Medical Counsel 
of New Zealand and the Ministry of Health in Germany. The 
Federation strongly supports State based regulation of the 
practice of medicine.
    With regard to Internet prescribing, however, State medical 
boards have the authority to discipline licensed physicians 
prescribing and dispensing medications inappropriately. Several 
boards have already taken action against licensees, adopted 
rules or policies or introduced legislation to clarify this 
authority. In addition, State medical boards are communicating 
among themselves regarding physicians licensed in more than one 
State. These cooperative efforts have been effective in closing 
several Internet sites and causing a number of physicians to 
cease their affiliation with questionable operations.
    That said, I also indicated in my testimony last March that 
there were at least three issues that needed to be addressed 
through Federal legislation in order to protect patients 
ordering prescriptions over the Internet. I'm very pleased that 
H.R. 3880, the Internet Pharmacy Consumer Protection Act, 
addresses each of those issues.
    First, I remarked that patients should know with whom they 
are dealing. They should know the name and location of the 
pharmacy that is dispensing the drug, and the name of the 
physician who will be providing the medical consultation that 
will be the basis of that prescription. I noted that almost 
without exception, a State would find that such physician had 
violated practice standards if he or she wrote a prescription 
on the basis of an online questionnaire without having any pre-
existing relationship with the patient.
    Therefore, disclosure will not only be beneficial to 
patients but will allow State medical boards to identify 
individuals against whom they can take disciplinary action. 
H.R. 3880 specifically addresses the issue of disclosure by 
amending the Food and Drug and Cosmetic Act with the addition 
of a new section.
    Second, I stated that State attorneys general were not able 
to enjoin operations of an Internet pharmacy that affects 
citizens in their particular States, if that pharmacy is 
operated out of another State. Many of our member boards have 
indicated that they believe that a number of Internet sites 
that dispense drugs in an appropriate manner could be shut down 
if the attorneys general had nationwide injunctive powers as 
well as the ability to pursue other civil remedies, including 
damages, restitution or other compensation across State lines.
    Third, I noted that while State medical boards have the 
authority to discipline physicians who are prescribing and 
dispensing drugs over the Internet inappropriately and that 
many boards had taken such action, State medical boards cannot 
take action against operators of Internet sites that dispense 
drugs. I also remarked that while State medical boards believe 
that the law and regulations governing the physicians in their 
State are clear as to what constitutes an appropriate 
physician-patient relationship for purposes of writing a 
prescription, some courts and prosecutors believed that certain 
State laws and regulations were ambiguous in this regard. I 
noted that because of that ambiguity, prosecutors had not 
pursued certain legal actions.
    Last, I offered to work with the committee in trying to 
craft language that would define an appropriate physician-
patient relationship for purposes of regulating Internet 
pharmacies, while preserving the rights and responsibilities of 
State medical boards. The language in H.R. 3880, adding a new 
section to the Food, Drug and Cosmetic Act, strikes a 
reasonable balance in requiring for the narrow purpose of 
regulating Internet pharmacies while regulating the exclusive 
role of State medical boards and defining that relationship 
under other circumstances.
    In conclusion, H.R. 3880 satisfactorily addresses the 
issues that were raised last year by the Federation of State 
Medical Boards, and we believe that its enactment into law will 
provide significant protection for consumers who use the 
Internet to obtain pharmaceuticals.
    I thank you for the opportunity to testify today, and I'll 
be happy to answer any questions.
    [The prepared statement of Dr. Thompson follows:]

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    Chairman Tom Davis. Thank you very much.
    Dr. Catizone.
    Mr. Catizone. Thank you, Mr. Chairman and good morning 
committee members. Thank you for the opportunity to be here 
today.
    The National Association of Boards of Pharmacy, which I 
represent, its members are all the licensing jurisdictions in 
the United States, Canada, Australia, New Zealand, and South 
Africa. The VIPPS program is an integral component of the 
services we provide to the States to help them regulate the 
Internet and protect the public health.
    Almost 1 year to the day, we appeared before this committee 
to report on the activities of the Internet sites offering 
prescription drugs for sale. Since that time, much has changed 
and must has remained the same. Domestic, legitimate Internet 
pharmacies continue to provide valuable and innovative services 
to their patients.
    Although not the focus of the proposed legislation, as 
Chairman Davis indicated, illegal foreign importation 
represents a significant threat to State regulation, and is an 
issue that should be addressed. Rogue or illegal Internet sites 
distributing prescription drugs without a prescription and 
based in the United States, although a concern, can be 
identified, and following appropriate due process, forced to 
cease operations. The limiting factor for the States is our 
resources and nationwide injunctive relief.
    The required posting of information by Internet sites 
outlined by H.R. 3880 is an important component of identifying 
and eliminating rogue and illegal sites. However, NABP is 
concerned that simply mandating the posting without any 
credible verification of that information could mislead 
consumers into believing that illegal or rogue sites are 
operating legitimately. The required posting will also not 
address foreign sites which pose the biggest problem for State 
and Federal regulators.
    Some of the examples given today by Mr. Hubbard and others 
indicate the steps which these rogue or illegal operators will 
take to confuse the public and hide information. The simple 
posting of information without verification does not address 
this critical issue.
    NABP applauds the sponsors of H.R. 3880 for addressing the 
patient-prescriber relationship and supports the language of 
the bill. The proposed revisions, which identify and define a 
qualifying medical relationship, will close a regulatory 
loophole exploited by rogue and illegal Internet sites. Equally 
as important, the proposed requirement of an in-person medical 
evaluation will not adversely impact the practices of 
telemedicine and telepharmacy.
    NABP also strongly supports the provisions of H.R. 3880 
which allow States to bring civil action forth to enjoin the 
practices of illegal Internet sites and obtain nationwide 
injunctions against their operations. NABP's experience 
indicates that the operators of illegal and rogue sites are 
extremely knowledgeable about State and Federal laws and will 
locate their operations to those States or areas where their 
activities are not specifically prohibited, and may in fact 
fall within a regulatory grey area. Nationwide injunctive 
relief will cease these practices and allow States to work 
together to close regulatory loopholes and eliminate safe 
havens within the United States for illegal and rogue sites.
    NABP and the State Boards of Pharmacy believe that Internet 
service providers, advertising services and search engines play 
a direct role in abetting the activities of illegal and rogue 
Internet sites. The inclusion of advertising on their sites 
from the rogue and illegal pharmacies misinforms consumers that 
such sites are legitimate and safe and have been qualified in 
some way by the ISP, the search engine or the advertising 
service. Such activity is a matter of concern for the States, 
and at least one State is preparing a formal complaint against 
such entities for aiding and abetting in a violation of State 
and Federal laws.
    NABP also requests that the legislation seek to curb the 
actions of illegal and rogue sites using credit card companies. 
NABP has been informed that information provided to the House 
Committee on Energy and Commerce indicates that any purchase 
made via Web site using a credit card would allow the credit 
card company to locate the merchant bank and other detailed 
information on the seller. More importantly, the information 
presented to the Energy and Commerce Committee notes that the 
credit card companies could quickly terminate relationships 
with any vendors of such activities that are illegal.
    NABP requests that the provisions of H.R. 3880 which hold 
harmless interactive computer services or advertising services 
be reconsidered, and these entities be required to assume 
responsibility for their acceptance of funding and services 
from illegal and rogue sites which threaten the public health 
and safety.
    Again, we appreciate the opportunity to share our comments 
with the committee. We are hopeful that the proposed bill can 
be revised to address the concerns of the State boards of 
pharmacy, and we're anxious to work with the sponsors and 
committee members in achieving this objective of ultimately 
ensuring that consumers can safely use the Internet to obtain 
prescription medications.
    Thank you.
    [The prepared statement of Mr. Catizone follows:]

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    Chairman Tom Davis. Thank you very much.
    General Kilgore, thanks for being with us.
    Mr. Kilgore. Good morning. Thank you for inviting me and 
thank you for the opportunity to testify today on behalf of 
attorneys general around the Nation.
    In the National Association of Attorneys General, I serve 
as the Chair of the Prescription Drug Abuse Task Force. Many of 
us have been in Washington this week to discuss important 
issues facing our States. The issue of prescription drugs being 
sold over the Internet certainly is one of them.
    As we all know, the Internet offers tremendous 
opportunities for e-commerce, but it's also a wireless trap for 
fraud and scams, including the health risks involving the 
online sales of prescription drugs. In July of last year, we 
posted on our office Web site and issued a media alert warning 
individuals of the perils of online prescription drugs, 
including links for information on consumer safety for online 
prescription purposes.
    Thousands of Virginians rely on prescription drugs for 
their health. Seniors and working families struggle to afford 
prescription drugs. It is my role as attorney general to ensure 
that consumers are protected from online fabricated pharmacies 
whose main concern is the bottom line, not the health of the 
purchaser. It is necessary to have the law enforcement tools to 
shut down those rogue pharmacies, and that is why I am here 
today.
    Virginia prides itself on being a business friendly State. 
As Attorneys General, we often look for creative ways for the 
public and private sector to work together. There is a 
legitimate purpose for online prescription sales, but only when 
it is narrowly tailored to provide the convenience and cost 
effective purchases following an actual visit with a physician 
who then prescribes a patient medication that will improve the 
patient's health. This legislation targets those companies who 
use privacy concerns and convenience at the expense of the 
health of the individual.
    It is so easy to go to one of these sites and put in 
information that doesn't accurately portray the health 
condition, such as a higher weight to allow an individual to 
purchase diet pills who really doesn't need those diet pills. 
It is also easy for a child to make up their age to purchase 
prescription drugs without their parents knowing. It is so easy 
to go to one of these sites, get a prescription for a self-
prescribed condition, something an individual may have read off 
another Internet site. No questionnaire can replace the 
diagnosis of a physician who knows the patient and understands 
their health history.
    As attorneys general, we have worked together against rogue 
pharmacies, but our current enforcement tools are lacking. 
Right now, enforcement at the State level is limited to the 
practice of prescribing and dispensing medication through State 
laws and licensure agreement. Under this legislation, as 
attorneys general, we need the additional enforcement authority 
to take these individuals to court to shut down these illegal 
Internet pharmacies.
    It is vital that the Davis-Waxman Internet Pharmacy 
Consumer Protection Act be adopted to protect our citizens, 
because we believe the health care of our citizens is being 
jeopardized. An individual who is savvy with technology can 
easily startup one of these businesses and make it difficult 
for law enforcement authorities to track them down. I want my 
computer crimes unit to have the authority to go to Federal 
court and shut down these illegitimate businesses and get 
nationwide injunctions if necessary.
    We need Congress to give us this authority, so that we can 
continue to protect the health of our citizens. I urge you to 
act favorably on this important health protection legislation 
for the constituents of each member of this committee and 
indeed, all Americans. Thank you so much for allowing me to be 
with you today.
    [The prepared statement of Mr. Kilgore follows:]

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    Chairman Tom Davis. Mr. Kilgore, thank you very much for 
being here.
    Dr. Patchin.
    Dr. Patchin. Good morning, Chairman Davis and members of 
the committee.
    My name is Rebecca Patchin, I'm a physician. I practice in 
Riverside, CA. I'm an anesthesiologist and I practice full time 
pain management in an outpatient setting.
    In June 2003, I was elected to the AMA Board of Trustees 
and we want to thank you for holding the hearing today on this 
important policy issue. The safety of Internet prescribing and 
pharmacies.
    The AMA appreciates the opportunity to express our views on 
Internet pharmacies, and the role of physicians in prescribing 
and dispensing of medications through these pharmacies. The 
Internet can be a valuable tool as a medical resource, and we 
support the use of the Internet as a mechanism to prescribe and 
dispense medications, as long as appropriate safeguards are in 
place. These safeguards include ensuring high standards for 
quality medical care.
    I would like to raise three points regarding the regulation 
of the Internet as a means of obtaining prescription 
medications. The first is the patient-physician relationship, 
the second is patient safety regarding the medications they 
obtain, and the third is the balance of State, Federal and 
private regulations. First, the AMA believes that Internet 
pharmacy Web sites or physicians that sell or dispense 
prescription medications without a prescription or without a 
valid patient-physician relationship fall well below accepted 
standards of high quality medical care. They are a threat to 
the public health.
    Any Internet communications between a patient and their 
physician should supplement and enhance but not replace the 
patient-physician relationship. The same must be true for 
Internet transactions between a physician and the pharmacy on 
behalf of the patient.
    For physicians who prescribe via the Internet, a valid 
patient-physician relationship requires the following. 
Performing a physical examination of the patient, appropriate 
to the nature and treatment of the problem that is presenting. 
Taking a complete and reliable medical history and adequate 
dialog, followup recordkeeping in order to inform the patients 
and properly assess the outcome of the therapeutic 
intervention.
    Exceptions to the criteria that I stated above do exist. 
Those would include covering for a partner on a night or 
weekend for an existing patient, on call situations and 
ordering refills for your existing patients. The bottom line is 
that safeguards must be in place to make sure that patients 
receive the appropriate medications based on their medical 
history and physical exams.
    Next, with respect to the medications obtained through the 
Internet, patient safety is paramount. Protections need to be 
in place to make sure that patients get the medications they 
need from safe, reliable and identifiable sources, not from fly 
by night sites that do not meet today's safety standards. The 
AMA asks that physicians who practice medicine via the Internet 
disclose identifying information on their Web site, including 
the State or States in which they are licensed.
    This type of disclosure requirement should also apply to 
the Internet pharmacies. In addition, patients need a reliable 
way to distinguish safe and legitimate sites from fraudulent 
sites or sites operating below pharmacy standards. To address 
this problem, the AMA will continue to work with organizations 
such as the National Association of Boards of Pharmacy to make 
legitimate sites more easily identifiable.
    In addition, the AMA, in conjunction with the State medical 
societies, will continue to urge our State medical boards to 
investigate, and when appropriate, to take action against 
physicians who fail to meet the accepted standards of medical 
care with regard to Internet prescribing. We also expect that 
States will continue to explore various methods of regulating 
the manner and medium in which prescription drugs may be 
prescribed.
    Finally, on the Federal level there are currently several 
bills, including the chairman's, that address many of the 
problems we have cited here today in our written and oral 
testimony. While the AMA has not yet taken a position on any 
particular piece of legislation, we look forward to working 
with the Members of Congress to develop appropriate legislative 
solutions to counter the abusive Internet practices.
    Together, we can protect our patients, prevent sub-standard 
and illegal Internet prescribing and dispensing of medications, 
and mostly, to ensure that the standards for high quality 
medical care are fulfilled. Thank you for the opportunity to 
express our views before this committee. I would be happy to 
answer any questions.
    [The prepared statement of Dr. Patchin follows:]

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    Chairman Tom Davis. Thank you, Dr. Patchin.
    Mr. Rector.
    Mr. Rector. Good morning, Mr. Chairman and members of the 
committee. I'm particularly pleased to be here to testify on 
the Internet Pharmacy Consumer Protection Act, which is 
directly focused on the domestic marketplace and the Internet 
traffic in the United States.
    The National Community Pharmacists Association was founded 
in 1898. We represent the professional and proprietary 
interests of the Nation's community pharmacists, including the 
owners of 25,000 pharmacies. We are here to enthusiastically 
endorse H.R. 3880 and commend the Chair and Ranking Member 
Waxman for the work they have done on this measure.
    We especially value the disclosure requirements, the 
disclosure of the licensure of the pharmacist in the State or 
States where he or she is licensed. We further strongly support 
the focus on a bona fide relationship with the physician and 
echo the testimony of several other witnesses this morning in 
favor of the injunctive relief for the attorneys general to 
reach the extra-territorial conduct of these Internet 
businesses.
    I wanted to make just a few additional comments. Whatever 
is done regarding importation, we think you should focus 
clearly and in great depth on the domestic marketplace. 
Basically, Internet is just another form of mail order 
pharmacy. Also we'd like to take a second to put in context our 
point of view on these issues.
    Only one State has enacted a statute requiring the extra-
territorial pharmacies to license a pharmacist in their State. 
Just one State does that, Arkansas. So it's important to focus 
on that. So disclosure is a step in the direction of informing 
the consumer so he or she has the information to know whether 
or not the pharmacist, if in fact they're dealing with a 
pharmacist, is someone licensed in their own State. If they had 
that information, it might help them make the appropriate 
decision, along with the other criteria, as to whether or not 
they should be doing business with that particular site.
    In our attachment, we highlight a case brought by the U.S. 
Justice Department versus one of the major domestic mail order 
companies. We recommend a careful review by the committee 
members and staff of the allegations there that have extensive 
implications for the subject of this hearing and related 
issues.
    I note that Florida, California, Illinois, Tennessee, 
Texas, Michigan, Louisiana, Nevada, Virginia, Massachusetts and 
D.C. are parties to this whistleblower case that the Justice 
Department has intervened in, which really highlights the weak 
infrastructure currently in place regulating domestic mail 
order.
    I listened carefully to the comments of the National 
Association of Boards of Pharmacy, and we caution the committee 
not to take any steps in the bill that is eventually reported 
that would have anti-competitive consequences with regards to 
various private sector initiatives trying to ferret out the 
rogue pharmacists and their allies.
    And last, we'd like to draw attention also to those that 
are facilitating these illegal transactions by unlicensed 
physicians and pharmacies and pharmacists, whether it be the 
credit card companies or those that facilitate the shipment to 
the ultimate consumer in these illegal arrangements. We would 
encourage the various Federal agencies to address these issues, 
and frankly, we really don't think the FDA and HHS have 
aggressively pursued the enforcement of existing statutes. The 
Justice Department could take a close look at the mail order 
fraud statutes, RICO and others in trying to address the 
problem that you have so appropriately highlighted.
    Thank you.
    [The prepared statement of Mr. Rector follows:]

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    Chairman Tom Davis. Thank you very much.
    Dr. Thompson, I understand you need to leave at 12:00?
    Dr. Thompson. I'll stay as long as you need me.
    Chairman Tom Davis. We will not have an intervening vote, 
so that's good. Let's start the questions, I'll start with you, 
Dr. Thompson. H.R. 3880 gives State attorneys general Federal 
injunctive relief against online pharmacies that are in 
violation of the law. What impact do you think this injunctive 
relief will have on shutting down the rogue Internet pharmacy 
Web sites?
    Dr. Thompson. The principal problem that we've encountered, 
quite frankly, is the hesitancy of a number of attorneys 
general and the inability of them to go after these rogue 
sites. That's only superseded by the fact that it's very 
difficult to locate where they are. Their location and change 
of location is as simple as changing a Web page on a daily 
basis.
    But it would significantly increase an attorney general's 
ability to close down pharmacies that are operating in not only 
other States, but multiple States, and be able to go after 
those rogue sites as well as allowing us to go after the 
physicians that are involved in this practice.
    Chairman Tom Davis. Mr. Kilgore, do you agree with that?
    Mr. Kilgore. I do, Mr. Chairman. It's important that State 
attorneys general have this ability. How I envision it would 
work is that we would join together with other attorneys 
general around the Nation when we identify one of these sites 
to go in and shut it down.
    Chairman Tom Davis. You still have a problem identifying 
it, but at least now you would have a legal recourse, which you 
really don't now.
    Mr. Kilgore. That's right. It's much the way we have to do, 
Mr. Chairman, with spammers under Virginia's anti-spam law, 
under the new one passed by Congress. It's difficult to 
identify these individuals because criminals find new ways 
every day to go out and make money. But we can do it just, the 
authority, the injunctive authority gives us greater abilities 
to go into Federal courts and shut them down.
    Chairman Tom Davis. What we continue to see is consumers 
going to these Web sites, though. What's troubling is that 
consumers are going to the Web sites because they think they're 
getting cheaper drugs or whatever. And we today have heard a 
lot of testimony on how bogus a lot of these drugs are. Aside 
from the fact that even if they were correct, they may or may 
not work and do what they were prescribed to do, because you 
don't have the physician-patient relationship, many of these 
drugs are actually bogus. We passed some around up here that 
are routinely delivered over the Internet.
    What do we do to better inform consumers of the problems in 
this?
    Mr. Catizone. Mr. Chairman, I think that's a major dilemma, 
because we're sending mixed messages to consumers. On one hand 
we're telling them it's OK to import medications from Canada, 
and we don't know if those sources are truly Canada, and on the 
other hand, we're saying they're very dangerous, and we have 
examples of those dangers, counterfeit drugs. We've received 
over 100 consumer complaints about medications ordered over the 
Internet, at least $20,000 worth of consumer fraud where they 
ordered medications and didn't receive those medications, and a 
number of complaints that the products were counterfeit or 
didn't have any active ingredient whatsoever.
    So that's a significant challenge for us, sending one 
message to the consumer about using the distribution system 
that's approved and safeguarded by the FDA and State agencies.
    Chairman Tom Davis. I guess if anybody, if they would 
counterfeit a prescription, with a physician writing a 
prescription, without it, they'd certainly counterfeit the 
drug, I don't know why there would be any difference on that. 
Does anybody else have any observations on that?
    Mr. Kilgore. Mr. Chairman, I would say that traveling 
around Virginia and speaking with senior organizations, I've 
picked up on the mixed messages that they are getting as well. 
That's why we felt it was important to weave into every 
presentation to senior organizations around Virginia the fact 
that you must be sure who you are dealing with when you are 
ordering prescriptions online or, and reminding our seniors 
that Virginia law does not allow the importation, and further 
making it clear that you need to retain that doctor-patient 
relationship, so that they know exactly how each drug interacts 
with other drugs.
    Chairman Tom Davis. Dr. Patchin, let me ask you, you didn't 
specifically endorse any piece of legislation. I know your 
organization is careful not to do that. But do you think the 
provisions that we have in this legislation that Mr. Waxman and 
I have drafted, defining an appropriate medical relationship is 
consistent with AMA guidelines regarding prescribing 
medications?
    Dr. Patchin. Yes, they appear consistent. And on your last 
question, I might add, I practice in a border State, and a 
State where the importation is not Canada, and where many of 
our imported medications come in. I view it as patient 
education, something that I work with one on one with my 
patients about the safety of the medications that they may get 
from other areas by driving a few hundred miles. Again, they 
need to look at safety and whether the medication is really 
what they're getting.
    Chairman Tom Davis. My time is up, but real quick, does the 
AMA think it's important for Internet pharmacy sites to 
disclose physician identifying information, like their 
licensure information on their Web sites?
    Dr. Patchin. Yes. In my testimony, I stated that the 
physician and the pharmacy should have identifying information, 
so that the patient could contact the pharmacy as well as the 
physician.
    Chairman Tom Davis. Thank you very much. Mr. Waxman.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    Mr. Kilgore, you testified about the importance of the 
provision in this bill that would give State attorneys general 
the ability to shut down illegitimate Internet pharmacies 
nationwide. Would having the power to obtain nationwide 
injunctions encourage more enforcement by State attorneys 
general against these Web sites, and would this power be 
consistent with traditional State authority over the practice 
of medicine and pharmacy?
    Mr. Kilgore. It absolutely would encourage us to take 
action. The reluctance at this point, we can take action under 
State laws sometimes, but we cannot find these individuals. We 
need this ability so that we can join with other attorneys 
general and shut these down.
    Mr. Waxman. So what we do is provide a nationwide 
opportunity to deal with this problem but not take away the 
prerogative of the States as they've traditionally dealt with 
some of these issues?
    Mr. Kilgore. That's correct. We appreciate that.
    Mr. Waxman. Thank you. Mr. Catizone, you testified in 
strong support of the two key provisions of the bill. You 
endorsed the establishment of Federal standards for what is a 
valid prescription related to Internet prescribing. You also 
supported giving State attorneys general the authority to shut 
down these sites nationwide.
    I'd like to ask you about two areas where you've made some 
suggestions for improvement in the legislation. First, you've 
expressed concern about how the legislation deals with Internet 
service providers and search engines that might sell 
advertisements to illegitimate pharmacies. Are you aware of 
efforts by Yahoo, Google and other Internet companies to refuse 
to sell advertisements by some of these Internet pharmacies?
    Mr. Catizone. Yes, I am, sir. We spoke to those search 
engines and they've indicated they are interested in doing so. 
We're not convinced that their efforts go far enough. They seem 
to be accepting accreditation or approval processes that don't 
involve a very serious inspection of those sites or very 
serious review of what they're doing. In fact, they probably 
will be accepting advertisements from Canadian pharmacies which 
are operating illegally.
    Mr. Waxman. What makes this a difficult issue is that the 
intent of the legislation is to focus on those responsible for 
the illegitimate Web sites, not those who make the sites 
available to the public. I want to look over your suggestion, I 
think it's one we need to carefully consider, and I appreciate 
that thought behind it.
    You've also made the suggestion that Internet pharmacies 
should participate in a formal disclosure and verification 
program such as the VIPPS program, which is run by the National 
Association of Boards of Pharmacy. You suggested that one 
benefit of such an approach might be better enforcement.
    Are you suggesting that participating in VIPPS or in an 
equivalent program be required of all Internet pharmacies?
    Mr. Catizone. Mr. Waxman, we've talked about this issue 
with a variety of groups and yes, we're recommending some 
mandatory program. The voluntary program isn't going far 
enough, and those sites will do anything they can to confuse 
consumers and to hide information. So simply requiring the 
posting of information that will probably be fraudulent in many 
cases won't help the consumers.
    Mr. Waxman. How many participating Internet pharmacies does 
VIPPS certify now?
    Mr. Catizone. We currently have 13 sites representing 8,000 
to 10,000 pharmacies in the United States.
    Mr. Waxman. And if all the Internet pharmacies were 
required to participate in VIPPS, how many do you think might 
apply?
    Mr. Catizone. They estimate that the Internet pharmacy 
market is anywhere between 8 percent and 22 percent of existing 
pharmacies. There are probably right now 75,000 pharmacies 
licensed in the United States. So that number would be 8 
percent to 10 percent of that, upward to 7,500 pharmacies.
    Mr. Waxman. I appreciate the advantages of the VIPPS 
program. It's a model we believe the Secretary should look at 
when considering how to implement this bill. However, 
regulating a few large Internet pharmacies is not the same as 
monitoring what could be hundreds of thousands of Internet 
pharmacies. This is an enforcement challenge for anyone, 
whether VIPPS or FDA or the State attorneys general. We'll 
review this situation carefully. I think it's one that I'm 
pleased you brought to our attention.
    Dr. Patchin, your testimony covered a wide variety of 
topics, but I want to ask you about a couple of specifics. You 
testified that current AMA policy requires physicians to 
prescribe via the Internet to clearly disclose physician 
identifying information on the Web site. Are you aware that 
H.R. 3880 includes this requirement as well as the requirement 
that pharmacies also be identified, and would you agree that 
the disclosure provisions in this bill are consistent with AMA 
policy?
    Dr. Patchin. At this time, yes.
    Mr. Waxman. OK, good. And you testified that AMA policy 
prohibits prescribing medications without a valid doctor-
patient relationship. This includes performing a physical 
examination adequate to establish the diagnosis, having 
sufficient dialog with the patient regarding risks and 
maintaining a medial record that's readily available to the 
patient.
    In your judgment, is a doctor who churns out prescription 
after prescription on the basis of little or no information 
through an arrangement with an Internet pharmacy in compliance 
with AMA policy? And are you aware that this bill prohibits 
Internet pharmacies from arranging for doctors to write 
prescriptions to consumers without ever seeing them?
    Dr. Patchin. The physician who writes a prescription 
without the patient-physician relationship as we described 
would be in violation of AMA policy, correct.
    Mr. Waxman. Do you think this is a good provision for 
accomplishing that goal?
    Dr. Patchin. Yes.
    Mr. Waxman. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much. Mr. Carter, any 
questions?
    Mr. Carter. Thank you, Mr. Chairman.
    When we're dealing with lawsuits in the United States, the 
plaintiff's bar will argue that a lot of what they do as taking 
actions in the plaintiff's bar is policing up organizations 
that don't police themselves and targeted, as AMA. But the 
doctors don't police up their malpractice.
    Now, what I've heard testimony here today is that you would 
sanction, I would like to know exactly, if you were to identify 
a doctor who is operating this illegal procedure, what sanction 
would you take with that doctor? Would you punch his ticket and 
stop him from practicing medicine?
    Dr. Thompson. Yes, sir. The Federation of State medical 
boards is the membership association of the Nation's 70 
licensing and territorial regulatory authorities. A number of 
licenses have been revoked and there have been disciplinary 
actions taken against a number of physicians that have been 
involved in this kind of activity. It can be anything from a 
slap on the hand to a license revocation. But the kind of 
activity that we've seen more often than not leads to 
revocation of a license.
    Difficult, however to track these physicians down and very 
difficult to work across State lines in this kind of activity.
    Mr. Carter. I understand that we're giving tools to the 
attorneys general across the States to try to help do this. But 
part of the ultimate solution has to be, those people who are 
violating standards, violating laws and threatening lives have 
to be taken out of the system. If they're not taken out of the 
system, they're going to figure out another crooked way to do 
this thing.
    Dr. Thompson. The most notorious of the individuals who 
deals with Internet prescriptions had a license in 26 different 
States, and to date has had 14 of those removed and by 
reciprocal action through the information services that we 
provide through the Federation is soon on his way to having all 
of his licenses revoked.
    Mr. Carter. And the same question I would direct to the 
people involved in pharmacy. Would the pharmacies also punch 
the ticket on people who are doing this what I consider illegal 
operation?
    Dr. Thompson. Yes, sir.
    Mr. Carter. That's all the questions I have, Mr. Chairman. 
Thank you.
    Chairman Tom Davis. Thank you very much. Mr. Towns.
    Mr. Towns. Thank you very much, Mr. Chairman.
    Let me begin with you, Dr. Patchin. You used the term 
``safeguards must be in place'' on two occasions. What do you 
mean by safeguards must be in place?
    Dr. Patchin. Safeguards regarding the Internet prescribing 
would be to those that ensure that there is an approved supply 
of drugs that are the right dose, the right drug for the right 
patient, with the right, appropriate dosing interval and the 
right time. The safeguards for prescribing would also include 
State laws that govern the practice of medicine as well as the 
prescribing in the community standard.
    Mr. Towns. Thank you. My concern, and I guess this is to 
the Attorney General, this legislation is dealing with domestic 
Web sites, it doesn't do anything with international Web sites. 
And I'm sort of concerned about the fact that once the noose is 
tightened that we might have a problem in terms of people going 
out of the country and doing almost the same thing. So what do 
we do here?
    I'm concerned, I'm in favor of shutting down all Internet 
pharmacy sites. However, it appears that better oversight and 
controls are needed, but purchasing drugs through the Internet 
can offer incredible, no question about it, benefits for 
homebound patients. And of course, patients that might have a 
disease of some sort that might not want the world to know, 
there's benefits there as well.
    But I am concerned, so I'd like to hear your comments 
about, once we tighten the noose, what we might run into.
    Mr. Kilgore. That very well could happen. This is a great 
first step to control the domestic Internet companies. It's a 
great first step to give State attorneys general the ability to 
enforce the act. We recognize that as we go about enforcing the 
act that, as we shut down Internet pharmacies that we could see 
the effect you are talking about, i.e., the move overseas, they 
go international, then we will have to address that through our 
relationship with the FDA and work with the FDA and DEA on 
those important issues.
    Mr. Towns. Thank you. I guess this is for the doctors on 
the panel. In your experience, do health care professionals 
typically inquire about where a patient obtains his or her 
prescription drug before making changes or switching to an 
alternative product? Is that question generally asked, where 
you get your medication from?
    Dr. Patchin. Yes. Part of the assessment in obtaining the 
history and physical would be questions to find out what 
medications they are taking and who is prescribing them. You 
will find out where they're filling them. Many times I find out 
even the name of the pharmacy or the provider that they're 
getting their medications dispensed from.
    Dr. Thompson. Dr. Patchin is an anesthesiologist who deals 
in pain management, so she's more likely dealing with the type 
of drugs that we're talking about. I'm an ear, nose and throat 
doctor, and I infrequently deal with heavy narcotics and so in 
my practice, I would not necessarily have known where someone 
filled their prescription. I would, however, know what drugs 
they have been taking and for what reason they have been taking 
them.
    Mr. Towns. Mr. Catizone, I want to hear from you on this.
    Mr. Catizone. That's a very critical question. We're trying 
to work with the physician groups to ask patients that 
question. Because if their blood pressure is uncontrollable or 
their diabetes worsens, the assumption made is that the 
medication is not working, so they increase the dose or change 
the medication, when it could be a counterfeit product or a 
product that has no active ingredients.
    So we would also ask that be a consideration of any of 
these discussions. We're going to ask the FDA to change their 
Med Watch form to allow for that information to be asked, so 
they can identify whether it came from outside the U.S. 
distribution system.
    Mr. Towns. Let me say, Mr. Chairman, I think this 
legislation is good. But the question in my mind is, does it go 
far enough. I would like to have an extra second or two just to 
run down the line and ask each member in terms of what they 
might want to add to make it better.
    Chairman Tom Davis. Sure.
    Dr. Thompson. First of all, let me say that for the 
purposes of addressing the problem that this committee has been 
confronted with, this legislation is excellent. I would applaud 
the Chair and the other leaders of this committee for I think 
superb legislation that will deal with the issue.
    Chairman Tom Davis. Take as much time as you need. 
[Laughter.]
    Dr. Thompson. There are a number of other issues, however, 
that relate to the technology, and we in this Nation have seen 
a situation in which the technology has far superseded our 
ability to deal with the ethics or the regulation of that 
technology. And quite frankly, we're playing catchup. This is a 
giant leap forward, I believe, for the citizens in this 
country. There remains much work to be done, however.
    Mr. Catizone. I would echo Dr. Thompson's compliments on 
the bill. Absent the fact that we believe the disclosure should 
be mandatory, should be verified, in regard to the patient and 
the question of where the medication should be obtained from, 
that may not be a matter for legislation. That's a matter for 
the Federation and the American Medical Association to work 
together and increase that as a standard of care for patients 
as part of the diagnosis differential.
    Mr. Kilgore. I totally support this legislation. It's a 
great move forward, and a great move to protect patients' 
rights in the future, and it gives certainly attorneys general 
around the Nation the ability to protect our consumers. The one 
issue I think we must deal with in the future is the important 
issues, so that we avoid sending mixed messages to our seniors 
and others in our State about whether they should be able to 
import drugs from foreign countries. We need to, if we allow 
that we need to make sure those drugs are safe, those drugs are 
accurate, and we continue to require a physician-patient 
relationship.
    Dr. Patchin. I would like to make a plea for the patient's 
safety. The patient's safety is ensuring that they're getting 
the right drug, in the right concentration, in the right 
vehicle and the right timing as part of the patient-physician 
relationship in that prescribing.
    Mr. Rector. We strongly endorse the legislation in each of 
its key provisions. We think it's carefully drawn to avoid any 
anti-competitive consequences by endorsing one private sector 
certification program over another. But a related subject, not 
necessarily for this committee, but perhaps, would be to 
carefully review the statutes that are available to prosecute 
those entities that are facilitating the illegal commerce, both 
foreign and domestic. That means the shippers and the credit 
card companies and others. If the subject was stolen property, 
there would be no question. This is a lot more serious, 
typically, than stolen property.
    Mr. Towns. Thank you very much. Mr. Chairman, I don't have 
anything to yield back, so I'll just stop. [Laughter.]
    Chairman Tom Davis. Thank you very much, Mr. Towns. I just 
want to ask a couple of followup questions.
    Mr. Rector, you stated in your testimony that the 
regulation of the practice of pharmacy by pharmacists rests 
exclusively with the respective States. I just want you to 
reiterate again for the record the need for H.R. 3880 as a 
Federal law when you already have the State regulation from 
your perspective as a pharmacist.
    Mr. Rector. We think that H.R. 3880 ideally complements the 
jurisdiction that the States enjoy, both over the practice of 
medicine and the practice of pharmacy.
    Chairman Tom Davis. And the world has basically changed 
with the Internet, isn't that what's happened here, and 
everybody agrees, that the old rules don't apply when you have 
such a ubiquitous communications device as the Internet?
    Mr. Rector. Absolutely.
    Chairman Tom Davis. And certainly, Mr. Kilgore, from an 
enforcement point of view it changes everything. You noted it's 
hard to find these people, and in many cases, you really want 
to join with other attorneys general to shut them down, because 
you're chasing them all over the globe?
    Mr. Kilgore. That's true. The Internet has become the wild 
west, if you will, and we need this added ability in our 
enforcement tools to go after these rogue pharmacies.
    Chairman Tom Davis. Let me ask you, with your experience on 
spammers, I know you brought one of the first cases in the 
country prosecuting spamming and so on, how is that going? You 
used one of your strongest State laws, I know, which you and 
Senator Stiley and Senator Devolites helped write. How has that 
helped and what does your experience on that tell you about 
this?
    Mr. Kilgore. Again, it confirms our fear in the State that 
these cases take a lot of time, a lot of energy in our office 
to investigate and track down these individuals that are 
committing crimes. We have charts and charts that fill up a 
room where we've traced the ISPs from, gone to the ISP to get 
their address only to find out they're operating in many 
different domains. It just takes a lot of time and computer 
crunching. But we continue to investigate, just like we will 
once we are given this authority under this legislation to 
investigate and shut down these pharmacies.
    Chairman Tom Davis. As I understand it, today, if someone 
is selling Lipitor and it's not Lipitor, or they're selling 
Viagra and it's not Viagra, you can prosecute them for that if 
you can run them down, is that right?
    Mr. Kilgore. That is correct.
    Chairman Tom Davis. But this gives you the additional tool, 
because they're doing it without a prescription, and that's 
probably even easier to prove, is that probably----
    Mr. Kilgore. Much easier.
    Chairman Tom Davis. Everybody understands this is just an 
additional tool to try and get some of these folks. In addition 
to that, without the appropriate medical authorization, people 
are at risk. The new disclosure standards ought to help 
identify the offending Web site, shouldn't it? We talked about 
pharmacies and doctors, talked about where you get it, wouldn't 
that help disclose the offending Web sites as well?
    Mr. Kilgore. I would think it would.
    Mr. Catizone. We think it's a first step. We think it's not 
going to address the issue entirely, though.
    Chairman Tom Davis. OK. Well, thank you very much. This has 
been very helpful to us. We'd like to do something about that, 
and having the support and the testimony from your 
organizations is very critical in this. Again, I want to thank 
all the witnesses for taking their time to testify today. And 
the hearing is closed.
    Thank you.
    [Whereupon, at 12:01 p.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
    [The prepared statement of Hon. Carolyn B. Maloney and 
additional information submitted for the hearing record 
follow:]

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