LEGAL BRIEFS

Nevada has historically been considered an “Internet friendly” jurisdiction. The state, however, has recently taken steps that counter this reputation.LEGAL BRIEFS

Nevada has historically been considered an “Internet friendly” jurisdiction. The state, however, has recently taken steps that counter this reputation. Specifically, few online marketers or pharmacies are aware of the fact that they can get into serious legal difficulties for selling prescription drugs to individuals residing in Nevada.

Within the last year, the legislature in Nevada has modified the Uniform Controlled Substance Act to address “illegal online pharmacies.” Illegal online pharmacies are those that are not licensed by the relevant Nevada state agency, to wit, most online sites selling prescription drugs.

The specific statute that has been enacted in Nevada is NRS 453.3638. The language of that statute reads as follows:

1. A person who is located within this state and who owns, operates, controls, profits from or is employed or paid by an illegal Internet pharmacy shall not:

(a) Fill or refill a prescription for a prescription drug for another person located within or outside this state; or

(b) Deliver or cause, allow or aid in the delivery of a controlled substance, imitation controlled substance, counterfeit substance or prescription drug to another person located within or outside this state.

2. A person who is located outside this state, who owns, operates, controls, profits from or is employed or paid by an illegal Internet pharmacy and who knows or has reasonable cause to believe that another person is located within this state shall not:

(a) Fill or refill a prescription for a prescription drug for the other person; or

(b) Deliver or cause, allow or aid in the delivery of a controlled substance, imitation controlled substance, counterfeit substance or prescription drug to the other person.

Ostensibly, the above statute is aimed at terminating the every growing online pharmacy sales of various prescription medications in Nevada. The legislature is effectively “marking the territory” after undoubtedly being lobbied by local Nevada interests that have lost sales to the Internet.

Importantly, the adult Webmaster must also realize that the statute is applicable to those that “profit from… or [are] paid by an illegal internet pharmacy.” In short, the statute applies to both the online pharmacies AND AFFILIATES THAT ARE SENDING TRAFFIC TO THE PHARMACIES THAT CONVERT INTO SALES. In short, any online pharmacy that is conducting sales in Nevada is running a huge risk of criminal prosecution unless that pharmacy is licensed in Nevada. The same risk applies to affiliates of the unlicensed pharmacies. Unfortunately, the statute carries a rather significant set of teeth when it comes to prosecuting those in violation.

Penalties

Of major significance to online pharmacies and their affiliates, the penalties for violating the statute and making a sale to a Nevada resident are EXTREME! Specifically, section 4 of the statute calls for the following punishment:

· Conviction shall be considered a Category C Felony;

· Imprisonment in the state prison for a minimum term of not less than one (1) year and not more than a maximum term of five (5) years; and

· A potential fine of not more than $10,000.

As if such penalties were not enough, the statute authorizes even more restrictive penalties if the substance or drug involved proximately causes substantial bodily harm or death to a person or, alternatively, is classified as a Schedule I narcotic under pharmacy regulations. A list of Schedule I narcotics is beyond the scope of this article, but the issue is somewhat irrelevant in light of the penalties previously mentioned. Regardless, the extreme penalties for a conviction on this additional element of the statute are as follows:

· Conviction shall be considered a Class B Felony;

· Imprisonment in the state prison for a minimum term of not less than three (3) years and not more than a maximum term of fifteen (15) years; and

· A fine of not more than $100,000.

· No probation or suspended sentence options permitted.

In short, online pharmacies and the affiliate promoting the sales for the same need to give serious thought to tracking the location of their customers to eliminate sales in Nevada. While it is somewhat surprising that Nevada would take this position, particularly in light of the effort it is making to legalize online gambling, readers should watch for the enactment of similar statutes in other states.

If you run an online prescription site, a review of your sales procedures is an immediate requirement. If you are a Webmaster sending traffic to a site that conducts prescription sales, you should immediately contact the site to find out how the above law is being addressed and whether the sponsor is selling prescription drugs that fall within the statute. Certain online pharmacies are no longer accepting sales from Nevada while others appear to be avoiding the issue. Don’t let your up-sells land you in jail!

Richard Chapo is the lead attorney for AdultInternetLaw.com, based in San Diego, California. AdultInternetLaw.com provides legal services to adult businesses, focusing on business strategy, corporate and contract preparation and site reviews. He can be contacted at Richard@AdultInternetLaw.com.

The above discussion is intended to be a general commentary on pharmacy issues. Each situation is different and this article is not intended as legal advice for your specific situation. Further, nothing in this article is intended to create an attorney-client relationship.

LEGAL BRIEFS

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