Norman Stengel wanted to try Viagra, and the Internet seemed a likely place to find it. “I’ve been a computer junkie for over six years and order quite a bit online,” he said. “Plus I live in a rural area of North Carolina and have to go to a city 20–30 miles away to get major supplies.”

Stengel is one of millions of Americans who buy drugs and health products online and either have them mailed to their home or pick them up at a drugstore. A broad array of Web sites greets potential customers, but they generally fall into several categories.

Legitimate online pharmacies, such as drugstore.com or walgreens.com, operate like the traditional “brick-and-mortar” pharmacies. They meet state licensing requirements and validate prescriptions before dispensing drugs. The more problematic, and prolific, sites require online medical consultations for a fee before shipping a medication and are often located outside the United States. The home page of KwikMed (www.Kwikmed.com), Stengel’s source, greets you with “Welcome! You’ve found the easiest way to order the Hottest Prescription in the world.” In addition to Viagra, anabolic steroids and GHB (gamma-hydroxybutyric acid), the drug implicated in “date rapes”, are hot offerings of some sites. The third group of online pharmacies, which are more difficult to find and appear and disappear quickly, allow consumers to buy drugs without any type of prescription.

What is the legal status of these Web sites, and are they successful? Or are they joining the dot-com failures endemic in the market?

Medical consultation
At KwikMed, Stengel filled out a medical history form that asked for his current medications and medical problems, and he signed a consent form releasing the company of any liability. The retired 68-year-old gave his credit card number, which would be charged $65 for his medical consultation if he was approved, plus $129.50 for 10 pills. Presto! The grand total with shipping was $212.50. The service was prompt, but the effect of the drug wasn’t. “It had no effect whatsoever,” said Stengel. “But it was easier to do. Like ordering anything online, it’s simple. I didn’t have to leave my house or get in my car.”

Bernard Bloom and Ronald Iannacone wrote a December 1999 study, published in Annals of Internal Medicine, on the online availability of pharmaceuticals. Their study found that the total cost of an online medical consultation and prescription was 60% more than going through your local doctor and pharmacy. “For some people who are handicapped or from rural areas, they’re willing to pay, but they make up a small percentage,” he said. “In general, you’re paying through the nose for who knows what you’re getting.”

Bloom’s study cited the quality of online physician consultations as a major problem. In some cases, Web sites did not require a consultation, although their policy indicated that it was needed. The appropriateness and potential interactions of the medications, variations in manufacturing, and the potential for serious abuse were other red flags mentioned in the study. Also, the sites were constantly in motion. “We went back six months later, and more than a third of the sites were no longer available,” said Bloom, “but the total number had doubled.”

The FDA is currently investigating more than 100 rogue Web sites, which Tom McGinnis, FDA’s director of pharmacy, said “are not licensed with state boards and don’t have addresses and phone numbers–they’re trying to hide from law enforcement.” Of these, the international sites are more difficult to prosecute, but the FDA has responded with “cyberletters” warning them of potential illegal activities and requesting a response. “If we don’t hear from them, they’re put on import alert so Customs will withhold packages,” he said.

McGinnis said that the U.S. Customs Service confiscated about 10,000 packages in 2000, similar to the number in 1999. “What we don’t know is how many are getting through,” he said.

Clyde Moore, operator of Overseas Pharmacy, can shed some light on that (2). His experience shows that 5% of his customers have their packages opened by Customs. “They’ll open a package and send it through but seize an identical package,” he said.

Two years ago, Moore started Overseas Pharmacy, an online service that sells international pharmacy lists for $16.95. “I was trying to reduce the cost of my aunt’s medications, whose medications for seizures and blood clots were $500 per month. Several scams took my money and ran.” So after testing a number of international sites, Moore began his own Web site with eight international pharmacy sources he considered reputable. Today, more than 10,000 people have purchased the list of 50 international pharmacies, which ship medications in factory-sealed packages. He admits that prescription prices vary widely, with Asian pharmacies offering the lowest prices; however, his aunt’s medications are down to $150 a month.

Luckily for Moore, federal and state agencies are not targeting sites that sell pharmacy lists. While the FDA goes for sites that dispense medication without valid prescriptions, the Federal Trade Commission (FTC) concerns itself with misleading services. “We’re aware of those sites, but it’s not a priority to look at them,” said Rich Cleland, FTC senior attorney. “They raise consumer protection concerns, but they don’t raise any issues that we can regulate.”

In addition to the FDA and FTC, several states, through state medical boards and attorney’s offices, have gotten involved. According to Cleland, more than 20 states have taken legal actions against pharmacy Web sites for consumer protection and licensing issues. State medical boards, which license physicians and pharmacists, are concerned with prescriptions that depend on online questionnaires. “Relying solely on an online questionnaire does not meet professional medical standards. It’s not an adequate history or adequate follow-up to meet ethical concerns of medical practice,” said Cleland.

Sanctioned sites
Regulators have no problem with sites such as drugstore.com, PlanetRx, and CVS.com, which have been certified by the National Association of Boards of Pharmacy (NABP) as a Verified Internet Pharmacy Practice Site (VIPPS). As of January 2001, 16 sites were VIPPS-approved, with an additional 15 applications being considered. To be VIPPS-certified, a pharmacy must comply with the licensing and inspection requirements of each state to which it dispenses pharmaceuticals, offer secure records transfer, and provide meaningful consultations between patients and pharmacists.

Drugstore.com, affiliated with Rite Aid pharmacies, was first to market in 1999 and claims 1.7 million customers, many of whom purchase nondrug supplies. Open its Web site, and you find a home page full of sale items, such as Slim Fast, toilet paper, and PowerBars. “On average, we’re 20% lower than the community drugstore,” says Chief Pharmacist Andy Stergachis. Checks on two pharmaceutical products, Viagra and Celebrex, showed prices that ranged from 13% to 16% lower than the local Walgreens and Wal-Mart.

To order from drugstore.com and similar sites, customers fax, mail, or have their prescription called in by their physician. After the staff verifies the prescription, the order is filled and shipped free of charge. If they are affiliated with a pharmacy, customers can pick up the medication there. Many customers choose this option. According to Mark Miller, analyst with William Blair & Co., more than 90% of Walgreens’ online customers pick up their prescriptions at the store.

Future growth
Which sites are successful, and is there room for more? “There was a rapid expansion of the sites that sell designer-type drugs in ’99 and early ’00,” Cleland said, “but the number of sites has leveled off. There are probably as many going out of business as starting up, but I suspect there’s an increase in foreign sites.”

As for the legitimate sites, analysts agree that saturation of the market has been reached and online pharmacies that are associated with brick-and-mortar pharmacies have a greater chance of survival. Elizabeth Boehm of Forrester Research, an independent Internet research firm, sees a drop-off in the stand-alone Internet pharmacies, such as PlanetRx and Rx.com, but she lists CVS.com, Walgreens.com, and drugstore.com as successful models. In addition, she likes the sites operated by prescription benefit managers, such as MerckMedco and Advanced PCS. “Merck-Medco has the best online site in terms of functionality and volume,” she said.

Several analysts have questioned the future of PlanetRx. “PlanetRx doesn’t look like they’ll survive,” Boehm said. Hurt by the lack of a physical pharmacy, PlanetRx continues to post flagging sales, and the company has stopped selling retail prescription and health products on its Web site. Consumers want what Boehm called a “brick-and-click” experience—ordering online but picking up the prescription at the pharmacy. “They don’t want to wait several days to receive their medication,” she said.

Meanwhile, drugstore.com announced 257,000 new customers during the fourth quarter of 2000, with net sales of $35 million. Some analysts attribute the company’s increase in sales to rising prices, sales of nondrug items, and increased shipping fees. For example, drugstore.com charges a $3.95 shipping fee for nondrug orders totaling up to $250. Other sites charge $3.50–$4.45.

Improving compliance and catching drug interactions are areas that online pharmacies are successfully developing; however, better methods of handling insurance co-pays are needed. “Most sites cannot tell you what your co-pay is,” Boehm said, “so when you place your order, you don’t know what your total charge will be.”

New regulations and clarification of existing regulations will have an enormous impact on the future of e-pharmacies. “The FDA’s regulation is you can bring in up to 90 days of prescriptions that are not available in the U.S., but that policy got convoluted,” the FDA’s McGinnis explained. By the book, importing medications by mail is illegal. Because of a lack of personnel, however, Customs usually allows a 90-day supply of all prescriptions to be mailed into the United States, and it calls the FDA to make a determination on larger amounts. Differing state regulations also confuse the picture. Most states set up their consumer protection laws in the 1950s, when most people knew the locations of their pharmacies and doctors. Many states are updating their laws.

Meanwhile, Web sites come and go, as customers find real deals and not-so-special deals and try to meet their needs via the Internet. Moore, whose Overseas Pharmacy site features anabolic steroids and GHB, was asked whether he was concerned about the misuse of these drugs. “I’m sure a percentage of people abuse or misuse medicine they order, but unfortunately, there’s no way for me to control that,” he said.

For more information

1. The Electronic Frontier: The Challenge of Unlawful Conduct Involving Use of the Internet; National Cybercrime Training Partnership: March 2000; Appendix D. www.nctp.org/append04.html.
2. FDA “Cyber Letters” Web site: www.fda.gov/cder/warn/cyber/cyber2000.htm.
3. Bernard Bloom and Ronald Iannacone’s study of online availability of pharmaceuticals: Bloom, B. S.; Iannacone, R. C. Ann. Intern. Med. 1999, 131, 830–833. www.annals.org/issues/v131n11/full/199912070-00005.html.
4. List of overseas pharmacies: www.Overseaspharmacyconnection.com.