Google Prepares for a Possible $500-Million Penalty for Illegal Online Pharmacy Advertising, Says WSJ

Dispute with US DoJ highlights role of NABP’s Verified Internet Pharmacy Practice Sites (VIPPS) programs

In early May, Google amended its quarterly earnings statement to say that “in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $500 million for the three month period ended March 31, 2011. Although we cannot predict the ultimate outcome of this matter, we believe it will not have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows.” (Consider for a moment that a potential $500-million judgment is not “a material adverse effect” for the Internet giant.)

Shortly after, the Wall Street Journal reported that the investigation revolved around illicit online pharmacies advertising on Google sites; other search engines, such as Yahoo and Microsoft, have been implicated as well, although no DoJ action has been announced. Sources cited by the WSJ claim that as much as $1 billion in advertising had been raked in by Google over several years.

Google has been progressively tightening its restrictions for online pharmacy advertising, first using the National Assn. of Boards of Pharmacy’s VIPPS program, along with an independent company called PharmacyChecker.com.

Last year, PharmacyChecker.com was dropped amid accusations that it was not policing its own verification program. Along the way, NABP instituted a new program, e-Advertiser, for companies that seek to advertise pharmacy services online, but are not themselves regulated retail pharmacies (which would be covered under VIPPS). NABP surveys have shown that more than 90% of online pharmacies operate illicitly, especially over selling pharmaceuticals without a legitimate prescription, or selling drugs unapproved by FDA, including counterfeit or adulterated drugs.

NABP devotes considerable resources to managing VIPPS and e-Advertising, but does not, customarily, monitor pharmacy activity on the Web. A company called LegitScript (Portland, OR; legitscript.com), founded by John Horton, a former federal drug-policy official, has stepped into that gap. Horton says that his company currently has contracts with Google, FDA’s Office of Criminal Investigations, as well as other governments’ agencies, to monitor Web activity. It also offers a certification program for online pharmacies, but unlike PharmacyChecker.com, the service is free.

“We strongly support the VIPPS program, which is the gold standard in this area,” says Horton. Despite the increased vigilance, he says, “anyone who thinks that the problem of rogue pharmacies selling pharmaceuticals illicitly has been solved is mistaken.”

Abuse-Internet connection

Coincidentally, a new study has been published in Health Affairs that analyzed the state-by-state prevalence of drug abuse in conjunction with the growth of high-speed Internet access. According to the authors (who were funded by HHS), a 10% increase in Internet use is associated with a 1% increase in admissions to treatment centers, and a 0.3% increase in emergency-room visits for drug overdoses over the 2000-2007 period. Despite “important” limitations to the study, the authors say the study may “provide a first glimpse that growing Internet use may partly explain why US prescription drug abuse rates have risen dramatically while other substance abuse rates have not.”

A skeptic would argue that this is already well known from studies of drug abusers themselves, and was one of the reasons that the Ryan Haight Act (which addresses online sales of controlled substances) was passed in 2008; nevertheless, the study adds additional ammunition to the enforcement of legal online pharmacy sales.