In an article published by YNOTNews in late 2002, I discussed new legal requirements that affect online pharmacies and affiliates promoting these programs. The article focused on a revision to the Controlled Substance Act in Nevada addressing the regulation of online pharmacy sites.In an article published by YNOTNews in late 2002, I discussed new legal requirements that affect online pharmacies and affiliates promoting these programs. The article focused on a revision to the Controlled Substance Act in Nevada addressing the regulation of online pharmacy sites. I viewed this development as the beginning of a trend to regulate online pharmacy sales in many states. Recently, the medical and pharmacy boards of various states have started taking the predicted action. Following are two recent examples of the coming crackdown on pharmacy sites, and the potential impact upon affiliates promoting these sites.

Nevada Enforcement Actions

In January of 2003, the Nevada State Board of Pharmacy reached an administrative settlement with Prescriptiononline.com with fines totaling $204,500 being levied. The case arises from the Board’s claim that the site is a danger to public health because doctors never see any of the patients in person, but make a diagnosis and provide a prescription over the phone. The various state agencies are asserting that such actions are insufficient when it comes to properly diagnosing and prescribing medication to patients.

Since going online in July 2001, PrescriptonOnline.com allegedly sold roughly five million doses of hydrocodone, a painkiller that allegedly is addictive. The hydrocodone sales accounted for 90% of the total sales by the pharmacy, well above the industry standard of 15%. The excessive rate of prescribing hydrocodone was considered damning in that it arguably represents a significant percentage of misdiagnosis and supported the claims of the Board of Pharmacy that a physical exam of the patient is required prior to prescribing medication.

In settling the matter, PrescriptionsOnline.com agreed to a fine of $200,000 and the loss of its license to sell prescription drugs. In short, the company lost a significant amount of revenue and went out of business. The actual pharmacists writing the prescriptions also were defendants in the action and paid significant fines. Specifically, Dr. Joseph Auralle was fined $3,000 while Dr. Julie Levitt paid $1,500. While these fines constitute a nominal amount of money, the physicians were essentially ruined when their licenses to practice were suspended for one year and six months, respectively. It should be noted that no affiliates of the site were named as defendants in this particular case.

Webmasters must realize, however, that future prosecutions in Nevada will undoubtedly include affiliates, as prosecution of affiliates is clearly called for under the statute.

The online pharmacy industry should expect numerous enforcement actions in the near future. General Counsel for the Nevada State Board of Pharmacy, Louis Ling, was recently quoted as indicating that the prosecution of PrescriptionOnline.com was the second of “many to come.” He further indicated that the Board had earlier prosecuted an unnamed online pharmacy company and issued a fine in the amount of $1,000,000. The large fine forced the company to file for bankruptcy protection and the outcome of the matter is not currently clear. Regardless, Webmasters must realize that the promotion of online pharmacy sites can carry significant legal risks. Nevada is not the only state becoming active in enforcing regulations in the online pharmacy industry.

California Enforcement Actions

In a decision that went into effect February 21, 2003, the Medical Board of California revoked the medical license of Dr. Jon Steven Opsahl for prescribing medications online. The apparent basis for the ruling lies in the fact that patients of Dr. Opsahl were not being given a physical examination, the same claim seen in the PrescriptionOnline.com matter. Administrative Law Judge Vallera J. Johnson ruled that Dr. Opsahl had prescribed over 8,000 painkillers online without physically examining the patients. Judge Johnson also found that Dr. Opsahl had prescribed Cipro over the Internet without examining patients during the anthrax scare in 2002. Ironically, recent events have led to Cipro being deregulated to the extent that it can now be sold without a prescription. Alas, this development came a bit late for Dr. Opsahl. According to the decision, Dr. Opsahl has been permanently stripped of his license although he will undoubtedly apply for reinstatement in the future.

Webmasters Should Take Notice

These enforcement actions should put Webmasters on alert. While no affiliates were mentioned in the above-referenced cases, it is clear that affiliates of online pharmacies can be prosecuted in states such as Nevada. As state agencies become more versed in how online pharmacies attract business, affiliates will inevitably be dragged into these prosecution actions. Webmasters are strongly encouraged to review the programs they are promoting to make sure that they are not in conflict with the Controlled Substance Acts of various states such as Nevada. There is little doubt that the online pharmacy industry will see many more prosecutions in the next year.

Check back in future issues of YNOTNews for more information regarding legal actions against online pharmacy sites!

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.

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. If you have additional questions, please contact Richard at Richard@AdultInternetLaw.com.