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Security and trust: The backbone of doing business over the internet

There are roughly six legitimate Internet pharmacies on line, and approximately four hundred rogue operators selling prescription drugs and controlled substances without compunction, Kansas Attorney General Carla Stovall said in testimony before the Senate Health Committee Tuesday. American consumers have unfettered access to potentially dangerous prescription drugs as Viagra, which can cause fatal heart failure if taken improperly, unapproved hormones and steroids which can cause a vast range of medical problems, and addictive narcotic substances through Web pharmacies that sell their products in states other than the one where their offices are physically located, and so avoid local prosecution, she said. The sixteen-year-old son of a staffer was able to order and receive Viagra through such a Web pharmacy, even though he used his Mum's credit card, which, due to a re-marriage, bears a surname different from his own. He was not questioned, and the package arrived without delay or complication, Stovall said. To tackle the problem, she advocated drafting federal legislation modeled on current telemarketing regulations which enable state attorneys general to sue for injunction anywhere in the US. Stovall allowed that cracking down on domestic violators will inevitably drive more of the electronic trade in illicit drugs off shore, and for that she had no recommendation. In addition to the smuggling of illegal pharmaceuticals, foreign sites pose further challenges by sometimes selling counterfeit, improperly labeled, and poorly manufactured knock-off products, Committee Chairman James Jeffords (Republican, Vermont) noted. "We'll be facing challenges overseas that will be absolutely monumental," Committee Ranking Member Ted Kennedy (Democrat, Massachusetts) predicted. It would appear that the only relief from illicit international trade will be increased monitoring by the US Customs Department, and perhaps some political and economic pressure applied by the Department of State through back channels. It's doubtful that the resources exist to make either approach more than marginally effective. US Food and Drug Administration (FDA) Commissioner Jane Henney offered to develop a certification procedure which would clearly identify sites in compliance with state pharmacy regulations. The FDA would be forwarding a proposal along those lines to Congress in the coming weeks, she said. But drugstore.com CEO Peter Neupert had a far better idea. The United States would be far better served if the on-line pharmacy industry were to regulate itself, he said. Neupert urged Congress to satisfy itself with the Verified Internet Pharmacy Practice Sites (VIPPS) programme, developed last year by the National Association of Boards of Pharmacy (NABP), and to which drugstore.com proudly subscribes. To become VIPPS certified, an on-line pharmacy must comply with the licensing and inspection requirements of each state to which they ship drugs, and satisfy certain customer privacy guidelines. VIPPS-approved Internet pharmacies are identified with a seal displayed on their Web site. The VIPPS programme criteria are similar to those which the FDA advocates; the difference there is that Henney would make compliance a condition of doing business on line, whereas Neupert would leave it to the pharmacies to decide whether or not they wish to comply with state regulations. The key issue between them is probably fear that the FDA will require strict customer privacy regulations -- strict enough, we would guess, to create significant obstacles to advertising on such sites. This is likely to be the issue that most concerns Neupert, though we imagine he'd sooner hang himself than admit it. According to the drugstore.com privacy statement, the company "will not give, sell, rent, or loan any identifiable personal information to any third party, unless legally required to do so," but may share "non-personal, summary, or aggregate customer data with partners and other third parties." It's not a bad policy; but the industry is perpetually loath to offer any customer privacy except voluntarily, presumably in hopes that marketing rhetoric will eventually persuade consumers to accept less as time goes by. No sense carving anything in stone while hope springs eternal. Neupert, like most e-commerce entrepreneurs, would like to keep the federal government as far away as decency allows. He did have one, rather patronising suggestion for federal contributions, however. "The number-one thing that the federal government can do is get behind consumer education," especially regarding the VIPPS programme, he said. It remains to be seen whether Congress and the FDA wish to be reduced to playing cheerleaders for an industry front group's pet regulatory programme. The Register certainly wouldn't bet on it. ®

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