Mr. Chairman and members of the Judiciary Committee. The National Association of Chain Drug Stores (NACDS) is pleased to submit a statement for the record on the growing problem of rogue Internet drug sellers.

NACDS represents the nation's leading retail chain pharmacies and suppliers, helping them better meet the changing needs of their patients and customers. Chain pharmacies operate more than 37,000 pharmacies, employ 114,000 pharmacists, fill more than 2.3 billion prescriptions yearly, and have annual sales of nearly $700 billion.

We commend you on holding this important hearing on rogue Internet drug sellers. These rogue Internet sites, both domestic and foreign, are engaged in a pattern of illegal activity regarding the prescribing and dispensing of prescription medications. These Internet sites are not pharmacies. They are not licensed by any state or other jurisdiction, and are shipping unapproved, counterfeit, mislabeled or adulterated products within or into the United States. Prescription medications sold through these so-called “pharmacies” are often available to consumers without any legitimate relationship with a physician and without a valid prescription.

NACDS and its members are greatly concerned about the patient safety implications of prescription medications sold through these rogue sites. We want to work with Congress to eliminate these illegal Internet suppliers from the market, and protect patient health. We believe that the most effective way to guard against these rogue Internet sites is to enact narrowly-tailored solutions that focus resources on shutting down these illegal suppliers, rather than developing broad policies that sweep up legitimate, state-licensed pharmacies into a federal regulatory scheme that could potentially limit consumer access to state-licensed pharmacies through the Internet.

Internet Access to Pharmacy Provides Convenience for Patients

In this age of immediate information and consumer convenience, most retail businesses have Internet sites available to consumers. Retail pharmacies often maintain Internet sites that provide consumers with convenient access to their products and services. The vast majority of legitimate pharmacy-based Internet sites are operated by traditional state-licensed, “brick and mortar” pharmacies that maintain websites for the convenience of their patients. These sites allow patients to order prescription refills and non-prescription items. Some Internet sites of state-licensed pharmacies allow the ordering of new prescriptions, but this involves a pharmacist contacting the patient's physician, where a legitimate medical relationship with the consumer has already been established. Legitimate retail pharmacy Internet sites are not affiliated with, and do not provide, a prescriber for the patient.

Legitimate Pharmacies are Highly Regulated

State boards of pharmacy have effectively regulated the practice of pharmacy for over 100 years. Pharmacies must be licensed in the state(s) where they are located, and pharmacists must also be licensed in the state where they practice. In addition, many states also require licenses for out-of-state pharmacies that mail pharmaceuticals into the state to residents – in other words, many states require non-resident pharmacy licenses. To secure and maintain these state licenses, all legitimate pharmacies must comply with voluminous regulations, which are continuously updated. Illegal “pharmacies” are those without state licenses. We strongly believe that any federal legislation should not subject state-licensed pharmacies to further regulation, simply because they provide consumers the option of ordering prescriptions via an Internet site. It is critical that federal legislation distinguishes between traditional brick-and-mortar pharmacies with Internet connections that are already licensed by state boards of pharmacy and Internet drug sellers who lack state licensure and whose primary means of access by consumers is via the Internet.

We believe it is important to base federal legislation on several important criteria:

Entities Subject to Legislation: The entities that any Internet pharmacy legislation regulates must be carefully defined. The broader the definition, the more likely that it will include traditional brick-and-mortar pharmacies with Internet sites and therefore fail to target rogue Internet drug sellers.

For example, proposals that broadly regulate pharmacies if any part of the prescription ordering or sales transaction is conducted through an Internet site are problematic. Legitimate state-licensed pharmacies that merely operate Internet sites for the purpose of allowing patients the convenience of ordering refill prescriptions that are later picked up at the brick-and-mortar pharmacy would be subject to this type of proposal. This would place an additional and unnecessary administrative burden on pharmacies that are already regulated by the states.

Congress should also avoid legislative language that could prohibit legitimate pharmacies from the standard practice of contacting physicians for prescription refills through the Internet. For example, if Congress were to indicate that a pharmacy may not dispense a prescription if the patient did not have a prescription for the drug when the communication began, a prescription with no more refills would no longer be a valid prescription.

Internet Disclosure Requirements: Some congressional proposals would require Internet pharmacies to disclose certain information, similar to the information that traditional pharmacies post in their stores about licenses, pharmacists, and certain other information as required by state boards of pharmacy. The goal of any Internet pharmacy legislation would be to provide consumers with sufficient information to make informed decisions about whether they want to obtain prescription medications from an Internet site. NACDS believes that such information can be helpful to consumers in assessing the quality of the Internet site.

However, such disclosure requirements could be interpreted to require every community pharmacy that has an Internet site to post on the site information relating to the names and licensure status of its pharmacists for each pharmacy that it operates. Duplicative and burdensome “posting” requirements should not be imposed on legitimate retail pharmacies simply because they operate an Internet site.

For example, a pharmacy chain that has an Internet ordering connection might be required to post on its website licensure information about each and every one of its pharmacists in each and every one of its stores. Many pharmacists are licensed in multiple states, which require the pharmacy operator to know significant licensure information about its pharmacists beyond what is already required to practice in their own state. In addition, pharmacists often change pharmacy practice locations, making it very difficult to accurately maintain this type of information, which is of questionable value to consumers, on an Internet site.

These burdens are also duplicative, since pharmacies are already required by state boards of pharmacy to visibly post this information in each pharmacy outlet. Therefore, brick-and-mortar pharmacies with Internet sites should not have to aggregate and post this information on their sites if the information is already posted in their individual stores.

Certification of Internet Pharmacies: Many legitimate pharmacies have invested substantial resources in obtaining certification of their Internet site under the National Association of Boards of Pharmacy (NABP) Verified Internet Pharmacy Practice Sites (VIPPS) certification program. NABP is a professional association that represents the state boards of pharmacy in all U.S. jurisdictions. In response to public concerns regarding the safety of pharmacy practices on the Internet, NABP developed the VIPPS program in 1999. To be VIPPS certified, a pharmacy must comply with the licensing and inspection requirements of their state and each state to which they dispense pharmaceuticals. In addition, pharmacies displaying the VIPPS seal have demonstrated compliance with VIPPS criteria including patient rights to privacy, authentication and security of prescription orders, adherence to a recognized quality assurance policy, and provision of meaningful consultation between patients and pharmacists.

The VIPPS program requires rigorous certification and recertification of pharmacies that have Internet sites. It would be redundant for pharmacies with Internet sites that are certified by VIPPS to also have to meet additional and duplicative federal requirements. The recognition of VIPPS certification should be incorporated into any legislative proposal.

Workable Solutions: As Congress considers ways to reduce the threats to health and safety that illegal Internet drug sellers pose to consumers, NACDS encourages considerations of the following strategies:

• Narrowly limit the definition of Internet pharmacy to exclude legitimate, state-licensed brick-and-mortar pharmacies, and specifically target rogue illegal Internet drug sellers.
• Encourage and empower federal and state agencies to work together to enforce existing laws against illegal Internet “pharmacies.”
• Clearly identify legitimate pharmacy Internet sites through a credible and thorough certification program.
• Educate consumers about the dangers of dealing with illegal Internet drug sellers and provide a convenient method for consumers to report suspected illegal activity.
• Require a pharmacy that maintains an interactive consumer Internet site to list on the site the states in which it maintains valid pharmacy licenses.

Conclusion

NACDS encourages Congress to develop policies that narrowly target illegal Internet drug sellers, rather than creating duplicative regulations and unnecessary administrative burdens on state-licensed brick-and-mortar pharmacies with Internet sites. We believe that rogue Internet sites can be effectively targeted without granting new authority to the FDA to regulate the practice of pharmacy, which has traditionally been the authority of the states.

While illegal Internet entities must be shut down, consumer access to prescription medications through legitimate pharmacies must be protected. We look forward to working with this Committee in defining that balance and achieving our shared goal of eliminating rogue Internet operations that threaten our drug supply and patient safety.

Thank you for the opportunity to submit this statement to the hearing record.