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Operation Cyber Chase and OtherAgency Efforts to Control Internet DrugTrafficking The “Virtual” EnforcementInitiative Is Virtually UselessJohn Richard Castronova aa School of Law , Second year student at Southern Illinois UniversityPublished online: 23 Feb 2007.

To cite this article: John Richard Castronova (2006) Operation Cyber Chase and Other Agency Effortsto Control Internet Drug Trafficking The “Virtual” Enforcement Initiative Is Virtually Useless , Journalof Legal Medicine, 27:2, 207-224, DOI: 10.1080/01947640600716440

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The Journal of Legal Medicine, 27:207–224Copyright C© 2006 Taylor & Francis Group, LLC0194-7648/06 $12.00 + .00DOI: 10.1080/01947640600716440

OPERATION CYBER CHASE AND OTHER

AGENCY EFFORTS TO CONTROL INTERNET

DRUG TRAFFICKING

THE “VIRTUAL” ENFORCEMENT INITIATIVE IS VIRTUALLY USELESS

John Richard Castronova*

INTRODUCTION

On July 30, 1999, a group of investigative reporters testified in front of a Con-gressional subcommittee that they were able to obtain prescription drugs forothers over the Internet.1 They did not have a prescription from a physician, butrather, the reporters got the prescriptions by filling out online questionnaires.2

One would think the purpose of the testimony was to show it is easy tolie about one’s identity and obtain prescription drugs on the Internet. How-ever, the shocking part about this testimony was that one of the reportersobtained Viagra for her cat using the cat’s exact height and weight.3 Anotherreporter obtained a prescription for weight-loss drugs for his seven-year-olddaughter.4

This testimony describes some of the problems associated with onlineInternet pharmacies. Situations such as those described above and pressurefrom the pharmaceutical industry have caused state and federal governmentsto create solutions to deal with the problems associated with the sale of pre-scription drugs on the Internet.

On April 20, 2005, the Drug Enforcement Administration (DEA) an-nounced the results of “Operation Cyber Chase,” a year-long operation thattargeted “international Internet pharmaceutical traffickers operating in the

* John Richard Castronova is a second year student at Southern Illinois University School of Law. Addresscorrespondence to Mr. Castronova at Southern Illinois University School of Law, Law Journal Office,Lesar Law Building, Carbondale, Illinois 62901.

1 Congressional Panel Discusses Online Pharmacies, 11 LOY. CONSUMER L. REV. 212, 213 (1999).2 Id.3 Id.4 Id.

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United States, India, Asia, Europe and the Caribbean.”5 The purpose of thisoperation was to crack down on “rogue” Internet pharmacies that distributeSchedule II through Schedule V controlled substances, such as narcotics,amphetamines, and anabolic steroids to consumers without a prescription is-suing from a physician, as required by the law of the United States.6 WhileOperation Cyber Chase was led by the DEA as part of its “online pharmacyinvestigation strategy,” other agencies from the United States, Australia, India,Canada, and Costa Rica also assisted in the operation.7

The operation led to the arrests of 20 individuals in eight cities in theUnited States and four foreign countries, in addition to the seizure of 41bank accounts in the United States and other countries, totaling more than$6 million.8 The operation targeted the Bansal Organization, which operatedmore than 200 Web sites and, since 2003, distributed approximately 2.5 mil-lion dosage units of Schedule II-V drugs a month.9 However, as of June 24,2005, there were no criminal prosecutions.10

While Operation Cyber Chase is a victory in the sense that it disbandeda large Internet drug-trafficking ring, other factors must be considered todetermine whether such an operation is a successful method of combating theproblems associated with rogue Internet pharmacies.

This commentary argues that traditional state and federal police ac-tions targeting rogue Internet pharmacies are futile as use of the Internet,lack of state and federal resources, and location in foreign nations make itdifficult to locate and prosecute rogue Internet pharmacies. Section I ex-plains the three different types of Internet pharmacies and offers an expla-nation for the Internet pharmacy’s rise in popularity. Section II discusses theproblems associated with prescriptions dispensed by rogue Internet pharma-cies. Section III analyzes attempts at state and federal regulation and ex-plains the failure of such regulation, as well as the medical community’sposition on the dispensing of prescription drugs over the Internet. SectionIV offers solutions to the problem, arguing that government efforts shouldbe aimed at reducing the demand for foreign medication rather than at-tempting to police a group whose evasiveness makes it all but immune toprosecution.

5 Press Release, United States Drug Enforcement Admin., International Internet Drug Ring Shattered(Apr. 20, 2005), available at http://www.usdoj.gov/dea/pubs/pressrel/pr042005.html.

6 Id.7 Id.8 Id.9 Id.

10 Indian authorities have custody of licensed physician and head of the Bansal organization Brij BhushanBansal, but have yet to interrogate him, as he is critically ill. Additionally, Indian officials had todischarge former Bansal employee Himanshu Kulshreshtha, which was a “major setback” for Indianofficials. Harish C. Menon, Online Drug Scam Probe Hits Roadblock, YAHOO! INDIA NEWS, June 24,2005, at http://in.news.yahoo.com/050624/43/5z32a.html.

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I. THE ONLINE INTERNET PHARMACY

The online pharmacy’s role in the health care system is growing.11 In1999, American consumers spent approximately $160 million on Internet pre-scriptions, while in 2003, that number skyrocketed to $3.2 billion.12 Althoughrogue Internet pharmacies endanger consumers by dispensing “unproven,counterfeit, defective, or otherwise inappropriate” drugs, some Internet phar-macies serve a useful purpose by providing lower costs, added privacy, andconvenience.13

A. Three Different Classifications of Online Pharmacies

There are three different types of online pharmacies: traditional on-line pharmacy; prescribing-based site pharmacy; and rogue pharmacy.14 Thetraditional pharmacy is an online Internet pharmacy run in conjunction withbrick-and-mortar pharmacies, such as Walgreen’s and Rite-Aid, in which con-sumers can transmit prescriptions to the pharmacy electronically, via fax, orthrough the mail.15 The pharmacy then sends the medication to the consumer.16

The second type, prescribing-based site pharmacies, generally followa two-step process.17 First, consumers fill out a questionnaire, which is an“online consultation” with a physician.18 An online physician reviews thequestionnaire and writes consumers prescriptions based upon their answers.19

Problems with this “consultation” include the lack of a traditional patient-physician interaction and the questionnaire’s “pre-selected answers,”20 whichthe consumer needs to select to receive a prescription, essentially making theonline consultation practice a sham. Consumers are then asked for their creditcard numbers and the drugs are shipped to them.21

The final type of Internet pharmacy, the “rogue” Internet pharmacy,is the most troubling of all.22 These sites dispense prescription drugs with-out a valid prescription or a physician consultation.23 They also use Internet

11 Linda C. Fentiman, Internet Pharmacies and the Need for a New Federalism: Protecting ConsumersWhile Increasing Access to Prescription Drugs, 56 RUTGERS L. REV. 119, 123 (2003).

12 Id.13 Id.14 Ludmila Bussiki Silva Clifton, Internet Drug Sales: Is It Time to Welcome “Big Brother” into Your

Medicine Cabinet?, 20 J. CONTEMP. HEALTH L. & POL’Y 541, 546 (2004).15 Fentiman, supra note 11, at 126.16 Id.17 Clifton, supra note 14, at 546.18 Id.19 Id.20 Ross D. Silverman, Regulating Medical Practice in the Cyber Age: Issues and Challenges for State

Medical Boards, 26 AM. J.L. & MED. 255, 266-67 (2000).21 Id. at 267.22 Clifton, supra note 14, at 546.23 Silverman, supra note 20, at 266-67.

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advertising and spam e-mails to attract consumers, often by promoting theease with which prescription drugs can be purchased online.24 At the site,consumers fill out a general waiver of liability and pick the drug and quantitythey wish to purchase.25 Finally, the consumer provides a credit card numberand receives the drugs in the mail.26

B. The Rise in Popularity of Internet Pharmacies

Internet pharmacies have increased access to health care by makingthe process of obtaining prescription drugs more convenient, private, andeconomical.27 Additionally, direct-to-consumer advertising over the Internethas increased consumer awareness of certain “lifestyle drugs.”

Online pharmacies have made it more convenient for consumers to gettheir prescription drugs, as they no longer have to brave the elements, fightfor a parking spot, stand in line, or even leave their homes to get prescriptiondrugs.28 Internet pharmacies allow consumers to get their prescription drugsin a process less formal than a chat room meeting.29

Additionally, Internet pharmacies also may be a low-cost alternative tofilling a prescription at a traditional pharmacy.30 Internet pharmacies pass onthe savings from lower overhead, as often they do not need the facilities orthe staff of a traditional brick-and-mortar pharmacy.31

Internet pharmacies also provide lower costs to consumers by pass-ing along the savings from the regulated pharmaceutical prices of othercountries.32 For example, 60 tamoxifen pills purchased in Canada wouldcost consumers $12.08, while they would cost consumers $100 in the UnitedStates.33

Internet pharmacies may also help protect consumer privacy. Thesesites allow consumers to purchase drugs, such as Viagra,34 Prozac,35 and

24 Id. at 266.25 Id.26 Id. at 267.27 Fentiman, supra note 11, at 122-23.28 Kerry Toth Rost, Note, Policing the “Wild West” World of Internet Pharmacies, 76 CHI.-KENT L. REV.

1333, 1337 (2000).29 See generally Jeremy W. Hochberg, Nailing Jell-O to a Wall: Regulating Internet Pharmacies, 37 J.

HEALTH L. 445 (2004) (arguing for state legislation prohibiting a pharmacy from filling prescriptionsunless a proper physician-patient relationship has been established, requiring, at a minimum, a face-to-face meeting).

30 Clifton, supra note 14, at 544.31 Id.32 Ty Clevenger, Internet Pharmacies: Cyberspace Versus the Regulatory State, 15 J.L. & HEALTH 165,

179-80 (2001).33 Id.34 Viagra is prescribed to treat erectile dysfunction. Pfizer, Why VIAGRA, at http://www.viagra.com/

whyViagra/index.asp (last visited Jan. 28, 2006).35 Prozac is prescribed to treat depression. Eli Lilly & Co., How PROZAC Can Help, at http://www.

prozac.com/how prozac/how prozac can help.jsp?reqNavId=2 (last visited Jan. 28, 2006).

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Meridia36 without the embarrassment of visiting a physician or pharmacist,eliminating the possibility that someone besides the patient knows whatlifestyle medication the patient is taking.37

Direct-to-consumer advertising of prescription drugs by pharmaceuticalcompanies also may have lead to the rise in the popularity of Internet phar-macies. In an attempt to bypass the physician,38 pharmaceutical companieshave started aggressive advertising campaigns via e-mail and the media39 toconvince patients they must have “potentially dangerous drugs they [do not]need.”40 The result is that consumers go to sites and choose a drug to treat aself-diagnosed ailment.41

Internet pharmacies have made purchasing prescription drugs more con-venient and affordable for consumers, as well as making the process of ob-taining prescription drugs more private. Unfortunately, such benefits comewith a high cost.

II. RISKS CREATED BY ROGUE INTERNET PHARMACIES

As the saying goes, “You often get what you pay for.” Such is the casewith rogue Internet pharmacies. The prices in some instances may be sig-nificantly lower and the standards for prescription are nonexistent, but thereare significant risks associated with purchasing drugs from rogue Internetpharmacies. Consumers often purchase expired, unapproved, or counterfeitdrugs and frequently are faced with fraud and privacy issues.42 Additionally,consumers are put at risk of self-diagnosing and self-medicating without con-sulting a physician or a pharmacist.43 Finally, there are questions regarding thevalidity of any “online” consultation and the effect that Internet prescribinghas on the physician-patient relationship.44

First, the consumer must worry about receiving counterfeit drugs. Thepharmaceutical industry defines a counterfeit drug as one not made of the samecompound used by the authorized manufacturer, but which is presented asauthentic.45 Rogue Internet pharmacies often sell drugs that are manufactured

36 Meridia is prescribed for weight loss. Abbott Laboratories, Inc., Meridia: Use and Safety Information,at http://www.meridia.net/index.cfm?act=consumer safety (last visited on Jan. 28, 2006).

37 See Clifton, supra note 14, at 544 (stating consumers “realize greater privacy” through online diagnosisand prescription); see also Rost, supra note 28, at 1338-39.

38 Hochberg, supra note 29, at 454.39 Clifton, supra note 14, at 549.40 Hochberg, supra note 29, at 454.41 Clifton, supra note 14, at 549.42 See Fentiman, supra note 11, at 129-33 (discussing the risks of purchasing prescription drugs on the

Internet).43 Rost, supra note 28, at 1338; see also Fentiman, supra note 11, at 130-32.44 Silverman, supra note 20, at 267.45 Douglas W. Stearn, Deterring the Importation of Counterfeit Pharmaceutical Products, 59 FOOD &

DRUG L.J. 537, 538 (2004).

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improperly, of a lesser strength, expired, extremely potent, mislabeled, or withimproper directions.46 According to the World Health Organization (WHO),counterfeit drugs are less effective and often toxic.47 WHO estimated that,in the 1990s, 10% of the world’s branded pharmaceuticals were counterfeit,with that number rising to 50% in developing nations.48 Spot examinations offoreign drugs shipped to the United States by the Food and Drug Administra-tion (FDA) and the United States Customs Department revealed that 88% ofsuch drugs were unapproved by the FDA or counterfeit.49

Additionally, consumers must consider fraud, as rogue Internet phar-macies often charge consumers for drugs but never send the items.50 Also, aconsumer’s credit card can be used fraudulently by the rogue Internet phar-macy for unauthorized charges.

Although some consumers believe purchasing prescription drugs fromInternet pharmacies may protect them from embarrassment, the transactionmight leave their personal information vulnerable.51 Internet pharmacy sitesreceive personal information from customers, such as their addresses, creditcard numbers, and personal health information. This information, just asother information sent over the Internet, is susceptible to hackers.52 Addi-tionally, some Internet pharmacies sell confidential patient information tothird parties.53

Internet pharmacies also create a significant risk of patient self-diagnosesand self-medication. Managed care is potentially useful in lowering the costof health care, but it can hamper patient efforts to receive quick treatmentfor a non-emergency situation.54 Instead of waiting for an appointment, a pa-tient may decide to obtain drugs via the Internet to “treat” an ailment withoutobtaining a prescription. This bypasses valid safeguards, such as the oppor-tunity to choose alternative treatments and to be informed of the drug’s sideeffects.55

Although prescribing-based and some rogue Internet pharmacies claimto provide a “physician consultation,” consumers might not be getting thesound medical advice they expect. Online questionnaires, which “online phys-icians” review, often are made up of “yes” or “no” questions with pre-selectedanswers the consumer has to select to receive the prescription.56 Additionally,

46 Fentiman, supra note 11, at 129.47 Stearn, supra note 45, at 538.48 Id. at 539.49 Id. at 541.50 Fentiman, supra note 11, at 131.51 Rost, supra note 28, at 1341.52 Id.53 Id. at 1342.54 Id. at 1338.55 Id. at 1338-39.56 Silverman, supra note 20, at 266-67.

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even if the consumer wishes to participate meaningfully in the “online consul-tation,” the questionnaire often uses complex medical terms, such as “myo-cardial infarction,” that the consumer might have difficulty understanding.57

Thus, rogue Internet pharmacies allow patients to obtain prescriptiondrugs more easily than conventional methods. However, patients also facemany risks when purchasing prescription drugs from rogue sites.

III. STATE AND FEDERAL REGULATION

Bill Reeves of Viapro.com, an Internet pharmacy, once stated: “I [do not]think the politicians are going to be able to do anything to us. . . . [It is] kindof like trying to nail Jell-O to a wall.”58 Mr. Reeves was referring to the nearlyimpossible task of regulating operations based solely on the Internet, manyof which the government does not know exist. When agents discover suchoperations, they cannot find the owners of the site to sanction misconduct.

Although many federal agencies are assigned to regulate Internet pharm-acies,59 no single agency has primary responsibility for regulation. Statesface an even bigger hurdle to regulation than does the federal government,as states have more limited resources, and their power to regulate Internetpharmacies is subject to constitutional limitations.60 The federal governmenthas the authority to regulate unapproved drugs sold over the Internet, however,states are responsible for regulating the practice of medicine and pharmacy.61

Additionally, prominent medical organizations have issued opinions regardingInternet prescription.

A. State Regulation

The states are responsible for regulating the dispensing of pharmaceuti-cals and the practice of medicine within their respective borders.62 To achievethis goal, states have passed statutes creating agencies to oversee the practiceof medicine and pharmacy. Additionally, states have created standards of carefor health care professionals through common and statutory law.63

1. State Regulation of Prescription Drugs and Health Care Professionals

Although current state regulations charge physicians with the duty toensure that drugs are dispensed appropriately,64 Internet pharmacies pose a

57 Id. at 267.58 Hochberg, supra note 29, at 459.59 Id. at 464-67 (identifying federal agencies and action taken to regulate and control Internet prescribing).60 Clifton, supra note 14, at 553; see also Hochburg, supra note 29, at 461-63. But see Silverman, supra

note 20, at 256-58 (arguing that states have extensive authority to regulate in this area).61 Hochberg, supra note 29, at 460.62 Id.63 Fentiman, supra note 11, at 145-46.64 Id. at 146.

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problem. For physician oversight to be meaningful, the physician must exam-ine the patient personally.65 Thus, many states try to limit the dispensing ofprescriptions only to situations in which a physician-patient relationship hasbeen established.66

For example, in 2001, California passed a law prohibiting the filling of aprescription when there has been no “good faith examination” by a licensed,qualified physician.67 The California Board of Pharmacy determined a “goodfaith examination” requires a face-to-face interaction.68

Nevada has taken a different approach, delegating the authority to reg-ulate Internet pharmacy registration to the state board of pharmacy.69 Nevadarequires the pharmacy board to maintain a list of approved Internet pharmacieson the board’s Web site.70 Nevada allows Internet pharmacies to register withthe board, but instituted serious criminal penalties for individuals operating oremployed by illegal Internet pharmacies that knowingly fill prescriptions forindividuals in the state.71 Such violations are a class B felony, with a sentenceof 3-15 years in prison and a fine of up to $100,000.72 Additionally, the Nevadastatute prohibits health care professionals, licensed in Nevada or elsewhere,from prescribing drugs without examining a patient within the previous sixmonths.73 However, it requires a showing that the health care provider knew orhad reason to know the prescription drugs were being delivered by an unreg-istered Internet pharmacy.74 This requirement makes enforcement a difficulttask.

Other states, such as Illinois, require out-of-state pharmacies that “dis-pense medications for Illinois residents and mail, ship, or deliver prescrip-tion medications into this State” to register annually with the state board ofpharmacy.75 Arkansas not only requires Internet pharmacies to register, buthas passed legislation requiring Internet pharmacies to make certain disclo-sures on their Web sites, such as their contact information, permit number,display of the Verified Internet Pharmacy Practice Site (VIPPS) seal, and alist of pharmacists and physicians associated with the site.76

65 Id.66 See infra notes 67-74 and accompanying text; see also Fentiman, supra note 11, at 147-49.67 CAL. BUS. & PROF. CODE § 4067(a) (West Supp. 2006).68 Hochberg, supra note 29, at 460.69 NEV. REV. STAT. § 639.23288 (2004).70 Id. § 639.23288(3)(a).71 Id. § 453.3638 (2005).72 Id. § 453.3638(5).73 Id. § 453.3643(1)-(2) (2005); see also Fentiman, supra note 11, at 148.74 Fentiman, supra note 11, at 148.75 225 ILL. COMP. STAT. ANN. 85/16a(b) (LexisNexis 2003); see also KY. REV. STAT. ANN. § 315.035(1)

(LexisNexis Supp. 2002).76 ARK. CODE ANN. § 17-92-1005 (2002); see infra notes 131-43 and accompanying text (more detailed

discussion of the VIPPS).

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In addition to regulating the dispensing of prescription drugs, statesalso may regulate health care providers.77 Through common law, states havedeveloped minimum standards of care health care professionals owe theirpatients.78 States have codified these common-law principles, such as the dutyof reasonable care and informed consent, and have created administrativebodies to oversee the licensing and discipline of health care professionals.79

Generally, health care professionals must be licensed in a state before seeingpatients.80

2. Challenges to State Enforcement

States often are faced with a variety of problems in dealing with In-ternet pharmacies. States have tried to deal with these problems by bringingcivil actions and regulating Internet pharmacies under their general power toregulate the health care professions.81 However, states are faced with manyconstitutional hurdles when enforcing state law against rogue Internet sites.

When bringing civil claims against rogue Internet pharmacies, statecourts often have difficulty asserting personal jurisdiction over these out-of-state defendants.82 Asserting personal jurisdiction requires a state to prove“minimum contacts” exist between the forum state and the defendant.83 Ac-cording to the Ninth Circuit’s ruling in Cybersell, Inc. v. Cybersell, Inc., adefendant is subject to personal jurisdiction when it does business over theInternet by entering into contracts with residents of a foreign jurisdiction thatinvolve the repeated transmission of computer files.84 Internet pharmacies arewithin reach of this ruling.85 However, the difficulty comes in asserting per-sonal jurisdiction over rogue Internet pharmacies based in foreign nations,when locating the source of the operation is nearly impossible.86

States also can use criminal law to punish those associated with rogueInternet pharmacies.87 Of course, the issue in these instances will be whetherthe state can properly exercise jurisdiction over the defendant.88 Defendantscould argue they never acted within a state, but only within the borderlessparameters of cyberspace.89 However, principles of criminal law allow state

77 Fentiman, supra note 11, at 145.78 Id. at 145-46.79 Id. at 146.80 Id.81 Fentiman, supra note 11, at 149-55.82 Linda C. Fentiman, Internet Pharmacies: Why State Regulatory Solutions Are Not Enough, 30 ADMIN.

& REG. L. NEWS 5, 6 (Fall 2004).83 Id.84 Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997).85 Fentiman, supra note 82, at 6.86 Fentiman, supra note 11, at 163-64.87 Id. at 160-61.88 Id.89 Id. at 160.

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prosecutors to establish jurisdiction by showing that at least one of the defen-dant’s actions took place within the state, or that the defendant intended his orher action to have effects in the forum state.90 Under either of these theories,a state should be able to assert jurisdiction over an individual associated witha rogue Internet pharmacy, as the pharmacy certainly intends the effects ofthe action to occur in the state and at least one of its actions occurs in thestate.91 For example, courts have concluded that defendants located outsideof a state who make representations intended to induce a consumer’s send-ing money constructively received the money in the forum state when theconsumer placed in the payment in the mail.92

In attempting to combat Internet pharmacies through regulation, how-ever, states face a major constitutional issue. The commerce clause, located inArticle I of the United States Constitution, gives Congress the power to reg-ulate commerce “among the several States.”93 While the “commerce power”allows Congress to regulate interstate commerce, it also has a dormant ef-fect that limits the power of the states to regulate interstate commerce.94 TheSupreme Court has ruled that Congress’s power to regulate commerce is verybroad, and that, even when Congress has not passed legislation on a matter,states may not regulate the area if state legislation would “unduly burden in-terstate or foreign commerce.”95 It could be argued that state statutes, suchas those of Nevada and Illinois, that require foreign pharmacies to registerwith the state boards of pharmacy before they dispense drugs unduly burdeninterstate or foreign commerce, as they interfere with the sale of prescriptiondrugs between pharmacies located in one state to citizens of another state.

A similar situation was analyzed by the Iowa Supreme Court in Statev. Rasmussen.96 In Rasmussen, an Iowa pharmacy argued that a state regula-tion prohibiting pharmacies from dispensing prescriptions written by out-of-state physicians was a violation of the dormant commerce clause.97 The IowaSupreme Court stated that, because Iowa law also required in-state physiciansto be licensed in the state, the statute did not discriminate against out-of-statepractitioners.98 However, the Iowa Supreme Court struck down the Iowa law,claiming the “federal authority issues licenses to dispense to accomplish the

90 Id. at 161.91 Id. at 161-62.92 Id.93 Nicolas P. Terry, Prescriptions Sans Frontieres (or How I Stopped Worrying About Viagra on the Web

but Grew Concerned About the Future of Healthcare Delivery), 4 YALE J. HEALTH POL’Y L. & ETHICS

183, 232 (2004) (citing U.S. CONST. art. I, § 8, cl. 3).94 Id.95 Fentiman, supra note 11, at 165.96 213 N.W.2d 661 (Iowa 1973).97 Id. at 666; see also Terry, supra note 93, at 235.98 Rasmussen, 213 N.W.2d at 667; see also Terry, supra note 93, at 235.

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purposes of federal legislation for the control of drug abuse,” and that this in-terest “clearly outweighs any local interest that Iowa might have in allowingonly practitioners registered in this state to prescribe here, and for pharmacistsin this state to fill prescriptions emanating from out-of-state.”99

Thus, if the federal courts were persuaded by the analysis in Rasmussen,it is quite possible they would strike down state laws dealing with the regu-lation of Internet pharmacies. However, given the unique nature of the Inter-net and the lack of a structured state and federal regulatory response to thisphenomenon, the courts should read Rasmussen narrowly and not apply itsreasoning in the context of cyberspace.100

States also are faced with the problem of locating rogue pharmacy op-erators and their assets before bringing them to court.101 Although Internettechnology has advanced society, it also has allowed Internet pharmacies toobscure their physical location, making it virtually impossible, and costly, tofind the individuals running the sites.102 For example, an Internet pharmacycan establish a physical location in Kabul, Afghanistan and create a site hostedon numerous servers: one server in England, another in Italy, and another inJapan. It could require payments be sent to a contact in Mexico. For the state,this kind of enterprise creates serious issues in tracking down the responsibleindividuals.

Finally, extradition poses another issue.103 Defendants often are locatedin other states or in foreign countries, which are beyond a state’s jurisdiction.When defendants are located in a foreign country, dual criminality, which re-quires that an act be criminal in both the extraditing and prosecuting jurisdic-tions, presents a problem because of the differing pharmaceutical regulationsamong different countries.104

B. Federal Regulation

The federal government’s primary responsibilities in regulating the phar-maceutical industry are to ensure that drugs are safe and labeled properly andto regulate drug advertisements to consumers.105 The current federal regula-tory framework consists of administrative regulations promulgated by variousfederal agencies, such as the FDA, the Federal Trade Commission (FTC), theFederal Bureau of Investigation (FBI), United States Customs Service, theDEA, and the National White Collar Crime Center.106

99 Rasmussen, 213 N.W.2d at 668.100 Terry, supra note 93, at 235.101 Fentiman, supra note 11, at 163.102 Id.103 Id. at 164.104 Id. at 164-65.105 Id. at 132.106 Clifton, supra note 14, at 556-60.

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The FDA, operating under the Department of Health and Human Ser-vices,107 is the primary agency charged with ensuring that drugs are effectiveand safe for consumer use.108 The FDA gets its power from the Federal Food,Drug and Cosmetic Act (the FDCA).109 The FDCA prohibits the “introductionor delivery for introduction into interstate commerce of any food, drug, deviceor cosmetic that is adulterated or misbranded.”110 A drug is “misbranded”under the FDCA if it is dispensed without a valid prescription,111 which isdetermined by state law.112 The FDCA also prohibits the interstate shipmentand importation of unapproved drugs.113 However, ordering drugs from a rogueInternet pharmacy located in a foreign country allows consumers to bypassFDA regulations, as consumers can order drugs which have not been testedor approved by the FDA.114 Overall, the FDA significantly needs to increaseits resources to enforce the laws it is charged with enforcing,115 as limitedresources make enforcement difficult, especially when every package cominginto the United States must be searched to locate drugs in violation of theFDCA.

Internet pharmacies also are regulated by the FTC, which, under the Fed-eral Trade Commission Act, has the authority to regulate deceptive consumeradvertising.116 Recently, the FTC has taken action against Internet pharmaciesmaking false statements about the safety of the Web site’s products, the site’sprivacy policy, and physician support of the site.117

The DEA is responsible for enforcing certain federal drug laws.118 Indealing with rogue Internet pharmacies, the DEA enforces the ControlledSubstances Act, which prohibits the dispensing of “physically or psycholog-ically addicting drugs . . . without a prescription.”119 The DEA has issued aguidance opinion entitled, “Dispensing and Purchasing Controlled SubstancesOver the Internet.”120 It states that individuals cannot purchase controlled sub-stances from foreign Internet pharmacies unless the pharmacy is registered

107 Id. at 556.108 Fentiman, supra note 11, at 133.109 Clifton, supra note 14, at 556.110 Id. (citing 21 U.S.C. § 331a (2000)).111 Clifton, supra note 14, at 556 (citing 21 U.S.C. § 353(b) (2000)).112 See Fentiman, supra note 11, at 133-34 (stating the FDA approves drugs on condition they are dispensed

by a licensed pharmacist pursuant to a prescription written by a licensed prescriber, both of whom arestate licensed).

113 Clifton, supra note 14, at 556.114 Fentiman, supra note 11, at 139.115 In addition to the FDCA, the FDA is charged with enforcing the Fair Packaging and Labeling Act,

which requires packages to contain correct and accurate information. Clifton, supra note 14, at 557.116 Id. (citing 15 U.S.C. § 45 (2000)).117 Fentiman, supra note 11, at 141.118 Id. at 142.119 Id.120 Clifton, supra note 14, at 559.

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with the DEA as an importer of controlled substances.121 However, even ifthe pharmacy is registered with the DEA, the DEA still requires that drugs besold only with a valid prescription.122 The problem with the DEA strategy isthat, to prosecute, it must intercept the package and work with foreign nationsto locate offenders. This is complicated when foreign nations may not havethe resources or the willingness to assist.

The FBI, in conjunction with the National White Collar Crime Cen-ter, has created the Internet Fraud Complaint Center, which addresses issuesconcerning fraud arising over the Internet.123 Consumers can report incidentsof fraud, which the FBI uses to compute fraud patterns and statistical fraudtrends.124

Finally, the United States Customs Service has taken an active approachto combat the problem. It works with foreign governments to find and raidthe shipment centers of rogue Internet pharmacies.125

Thus, many federal agencies have regulations and programs combat-ing rogue Internet pharmacies. They do not, however, have the resources todismantle the hundreds of rogue sites or to stop new sites from forming.

C. The Medical Community’s Response

Medical organizations, such as the American Medical Association(AMA) and the National Association of Boards of Pharmacy (NABP), haveinstituted rules and programs to combat rogue Internet pharmacies. The AMAhas taken a hostile position toward Internet prescribing.126 The AMA’s mainconcern is that, for a physician-patient relationship to be meaningful, theremust be personal interaction between the physician and the patient.127 TheAMA’s Council on Ethical and Judicial Affairs specifically states: “[E]-mailcorrespondence should not be used to establish a patient-physician relation-ship. Rather, e-mail should supplement other, more personal, encounters.”128

Furthermore, the AMA has stated: “Web sites that offer a prescription solelyon the basis of an online questionnaire (or online consultation) with no otherinteraction between the physician and patient are insufficient.”129 Additionally,the AMA will “work with federal and state regulatory bodies to close downInternet web sites of companies that are illegally promoting and distributing(selling) prescription drug products in the United States.”130

121 Fentiman, supra note 11, at 143.122 Id.123 Clifton, supra note 14, at 559.124 Id. at 559-60.125 Fentiman, supra note 11, at 144-45.126 Terry, supra note 93, at 240.127 Id.128 COUNCIL ON ETHICAL & JUDICIAL AFFAIRS, AM. MED. ASS’N, CODE OF MEDICAL ETHICS, Op. 5.06 (2005).129 Terry, supra note 93, at 241.130 Id. at 240.

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The NABP also has taken a hostile stance toward Internet prescribing.131

The NABP has created a “Good Housekeeping Seal,”132 known as the VerifiedInternet Pharmacy Practice Site (VIPPS) seal.133 VIPPS certification requiresa pharmacy’s compliance “with the licensing and inspection requirements oftheir state and each state to which they dispense pharmaceuticals.”134 How-ever, participation in the program is voluntary.135 Participating sites pay amembership fee, and the NABP performs on-site inspections, investigates anycomplaints against the pharmacies, and performs periodic re-inspections.136

Once certified by VIPPS, Internet pharmacies must protect consumer pri-vacy and ensure a meaningful physician-patient interaction.137 The purpose ofthe VIPPS seal is to inform consumers that they are doing business with anInternet pharmacy that has been inspected by accreditors.138

However, there are two flaws with the VIPPS program.139 First, the gen-eral public is not aware of the program. Second, very few Internet pharmacieshave entered the program.140 The seal informs only those who know aboutthe program of the Internet pharmacy’s legitimacy. It says nothing aboutthe risk of doing business with non-member sites, because participation isvoluntary.141 The problem is magnified by the fact that very few sites areVIPPS accredited.142 In 2004, only 14 of the approximately 300 to 400 Inter-net pharmacies had the VIPPS certification.143

IV. OPERATION CYBER CHASE IS NOT THE SOLUTION

Operation Cyber Chase was a law enforcement initiative targeting rogueInternet pharmacies.144 However, the problems with the strategy employed inOperation Cyber Chase are apparent from its results.

Although the government has indicated that much was accomplished,only 20 arrests were made over the course of a year.145 Even more discour-aging is that the head of the Bansal organization and his associates have yetto be prosecuted, and some have even been set free.146 Overall, the Indian

131 Id. at 241.132 Hochberg, supra note 29, at 463.133 Terry, supra note 93, at 241.134 Hochberg, supra note 29, at 463.135 Id.136 Terry, supra note 93, at 241.137 Hochberg, supra note 29, at 463.138 Id. at 463-64.139 Id. at 464.140 Id.141 Terry, supra note 93, at 242.142 Id.143 Hochberg, supra note 29, at 464.144 Press Release, supra note 5.145 Id.146 Menon, supra note 10.

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justice system has not been able to sentence these individuals on a chargeresulting from the operation that cost American taxpayers millions of dollars.One could expect better results from a year-long operation involving variousfederal agencies, as well as the cooperation of Australian, Indian, Canadian,and Costa Rican authorities, all seeking to take down “international Internetpharmaceutical traffickers operating in the United States, India, Asia, Europeand the Caribbean.”147 While more than $6 million in assets were frozen anda large organization was taken down,148 considering the scope of the problem,it hardly can be said the mission was accomplished.

A. The Solution: Reduce Demand, Not Supply

The fundamental flaw with the regulatory structure adopted to combatrogue Internet pharmacies is that it attempts to reduce supply by employingconventional law enforcement techniques against unconventional criminals.The law enforcement techniques employed primarily include attempting tocatch undetectable, technologically advanced criminals. Such a tactic is verycostly, especially in terms of manpower used to conduct investigations andprosecute the offenders. In addition, the costs include the resources required tohouse offenders in prison, which can exceed $20,000 per inmate annually.149

Not only is the system employed costly but, as the results of Operation CyberChase show, it is not very effective or practical.

The solution to the problem involves reducing the demand for cheappharmaceuticals. Governmental price controls on prescription drugs may helpalleviate the problems with rogue Internet pharmacies. Additionally, citizensneed to be educated about the dangers of purchasing drugs from rogue In-ternet pharmacies. This can be accomplished by promoting and advertising aprogram already in place.

B. Government Price Controls Must Be Put in Place to Lower the Costof Prescription Drugs

Research has shown that American citizens are more concerned with ob-taining cheaper prescription drugs than obtaining safer prescription drugs.150

Currently, the cost of prescription drugs is higher in the United States than inany other country.151 Since 1998, the cost of prescription drugs has increasedat more than double the rate of inflation.152

147 Press Release, supra note 5.148 Id.149 Jennifer Borges, The Bureau of Prisons’ New Policy: A Misguided Attempt to Further Restrict a Federal

Judge’s Sentencing Discretion and to Get Tough on White Collar Crime, 31 NEW ENG. J. ON CRIM. &CIV. CONFINEMENT 141, 202 (2005).

150 Jennifer L. Halser, Comment, Canadian Pharmacies: A Prescription for a Public Health Disaster, 54DEPAUL L. REV. 543, 565-66 (2005).

151 Id. at 543.152 Id.

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To combat rising prices, consumers have looked elsewhere to obtaincheap prescription drugs.153 While some consumers have purchased theirdrugs from prescribing-based and rogue Internet pharmacies, others havepurchased prescription drugs from Canadian pharmacies, either online or bymaking bus trips to Canada.154 In 2003, it was estimated that approximately$800 million was spent by American consumers purchasing prescriptiondrugs from Canadian pharmacies.155 An American consumer purchasing drugsfrom a Canadian pharmacy can save between 32% and 57% on prescriptiondrugs.156

Prescription drugs are much cheaper in Canada because the Canadiangovernment places price controls on medication.157 In contrast, prescriptiondrug prices in the United States are set by pharmaceutical companies basedupon the highest amount the market will allow.158 In charging market prices,pharmaceutical companies make it difficult for low-income and fixed-incomecitizens, especially those without health insurance, to afford prescriptiondrugs. Although the price set by the pharmaceutical companies includes legiti-mate overhead costs such as marketing, manufacturing, lobbying, and researchand development, it should be noted that pharmaceutical companies on thewhole have profit margins four times the size of the average Fortune 500company.159

The United States must institute price controls on pharmaceuticals tomake them more affordable for consumers.160 Reducing the price of pre-scription drugs would enable consumers to purchase medications from theirlocal brick-and-mortar pharmacy or their local pharmacy’s Web site, ratherthan from prescribing-based and rogue Internet pharmacies. This would elim-inate the need for consumers, especially elderly and low-income citizens,to take the risks of purchasing drugs from rogue Internet pharmacies. Re-ducing the price of prescription drugs also may make consumers more con-cerned about prescription drug safety, which would deal a tremendous blowto rogue Internet pharmacies, as the demand for their product would bereduced.

153 Id.154 Id.155 Id. at 544.156 Id.157 Id. at 550.158 Id.159 Id. at 550-51.160 In February of 2005, the Prescription Drug Affordability Act of 2005 was introduced. It would require

the Secretary of Health and Human Services to get the lowest price on prescription drugs for Medicaidbeneficiaries, even if the lowest price is obtained by re-importing drugs from Canada. However, noaction has been taken on the bill since February 2, 2005. The Prescription Drug Affordability Act of2005, H.R. 563, 109th Cong. (2005).

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C. Consumer Education

Despite price controls, rogue Internet pharmacies can lower their ownprices even further, still making their product attractive to consumers. Tocounter this tactic, the government must seek to educate consumers about thedangers of doing business with rogue Internet pharmacies.

The first step the government should take in attempting to increase aware-ness of the dangers of rogue Internet pharmacies is to institute an advertisingcampaign on a local and national level. An effective technique would be toplace actual accounts of injury and fraud sustained by consumers purchasingdrugs from rogue Internet pharmacies in media advertisements.

However, another issue arises in determining which Internet pharmaciesare rogue and which are legitimate. To solve this problem, the federal govern-ment should provide the states with a grant to institute a nationwide VIPPSprogram, like that of the NABP, giving a seal of approval to all pharmaciesthat meet the regulatory requirements in each state. Under this program, anonline pharmacy would not be operating legally if it did not qualify for theseal. Federalism issues are avoided by not instituting national standards, as itis the states’ duty to regulate the practice of pharmacy and medicine. Oncethe program is in place, advertising campaigns can be instituted to informconsumers about what the seal means and that any online pharmacy not dis-playing the seal has not met the standards, is operating illegally, and representsa potential danger.

CONCLUSION

Internet pharmacies serve a useful purpose. They provide consumerswith affordable prescription drugs at a great convenience, while keeping per-sonal health information private.

However, the possibility of receiving cheaper medication creates manyrisks. The Internet allows illegitimate organizations to conduct criminal op-erations and to remain unidentifiable. Similarly, consumers may misdiagnosethemselves and take potentially dangerous medication. Finally, consumersrisk injury, and possibly death, from taking counterfeit drugs that do not meetacceptable standards of safety.

Although the federal government has taken steps to combat the problemsassociated with rogue Internet pharmacies by instituting law enforcementinitiatives such as Operation Cyber Chase, such conventional law enforcementactivities are not sufficient to deal with this unconventional enemy. Stategovernment regulations are suitable for dealing with pharmacies within theirborders but are ill-equipped to deal with foreign rogue Internet pharmacies. Todeal effectively with rogue Internet pharmacies, the federal government mustregulate the price of pharmaceuticals to reduce cost to consumers. Similarly,

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consumers must be informed of the dangers of purchasing drugs from rogueInternet pharmacies.

The government must take alternative action to combat rogue Internetpharmacies. While legitimate online pharmacies can provide many benefitsfor consumers, a rogue Internet pharmacy cannot. That is, maybe unless yourcat has erectile dysfunction.

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