Rx Importation Could Be Slowed By List Of Approved Pharmacy Sites – Visa, MC

A list of approved pharmacy websites could help combat illegal importation of foreign pharmaceuticals, Visa and MasterCard suggest.

"I believe that if we had a list of the pharmacies that...were registered to be approved, that we could manage that within our system," Visa Exec VP-Operations & Risk Management Steve Ruwe said at a Government Affairs/Investigations Subcommittee hearing July 22.

If Visa had such a list, it could "make sure that they were the only ones that would be permitted to operate," he added.

FDA said two recent examinations of imported drugs mailed to U.S. consumers contained 88% and 69% unapproved drugs respectively.

MasterCard agreed with Visa, noting that such a list could be enforced internationally. Government enforcement efforts often face international jurisdiction barriers.

MasterCard could provide the list to foreign banks, "and tell them, look, if someone is not on this list you cannot provide them the service to sell pharmaceuticals over the internet to persons in the U.S. with a MasterCard," MasterCard VP and Assistant General Counsel Joshua Peirez said.

"If we were provided that list, frankly, we wouldn't have to be blocking them transactionally," Peirez said. "We would be blocking them from getting into the system in the first place."

The House Energy & Commerce Committee targeted Visa and MasterCard as well as FedEx and United Parcel Service as "enablers" of "illicit internet pharmacies" in December 2003. The committee asked the companies to submit information on their dealings with internet pharmacies (¹ (Also see "Illegal Internet Pharmacy “Enablers” To Be Subject Of House Hearings" - Pink Sheet, 15 Dec, 2003.), p. 38).

FedEx VP-Corporate Security Robert Bryden said a list of approved sites would be "less useful" for air curriers, because websites often do not include the origination point of the mailings. Lists "of the distribution sites off-shore" would be more helpful, he added.

UPS agreed, but said a website list "might be valuable for targeting."

AARP previously recommended that FDA develop a list of "safe" internet pharmacies and post it on FDA's website (² (Also see "FDA Website Should List Internet Pharmacies Approved To Import, AARP Says" - Pink Sheet, 29 Mar, 2004.), p. 31)

Yahoo! and Google testified that it would be difficult to bar search engines from finding illegal sites. Both of the companies only accept ads from SquareTrade licensed sites (³ , p. 6).

Investigations Subcommittee Chairman Norm Coleman (R-Minn.) has introduced legislation (S 2464) attempting to ensure the safety of drugs purchased online. Some of these safety provisions have also been included in the Safe IMPORT Act (S 2493) from Sen. Judd Gregg (R-N.H.), which would permit Rx importation from Canada (⁴ (Also see "Internet Pharmacy Regs Proposed By Senate Would Rely On Web Providers" - Pink Sheet, 7 Jun, 2004.), p. 21).

Senate debate on reimportation has been pushed back until the fall (⁵ (Also see "Senate Drug Importation Debate May Be Pushed Back To Fall" - Pink Sheet, 12 Jul, 2004.), p. 17).

[Editor's note: A version of this story first appeared in ⁶ "The Pink Sheet" DAILY July 22. Visit our website, www.ThePinkSheetDAILY.com, to sign up for a free trial.]

The Drug Enforcement Administration, Postal Service, Bureau of Customs & Border Protection, and FDA described their efforts to block importation to the subcommittee.

Customs is seeking authority to seize and destroy illegally imported pharmaceuticals.

"We need to find a way to do consolidated seizure reports, to take the time of bulk goods processing down significantly," Customs Office of Field Operations Assistant Commissioner Jayson Ahern said.

Customs needs a way to deal with illegal pharmaceuticals in which it doesn't "need to send a notice up," where it "can destroy these things on site and continue with interdiction issues," he added.

Another bill (S 2465) by Coleman would allow Customs to destroy "controlled substances" it finds in the mail. Coleman suggested the bill could be expanded to include all prescription drugs.

Illegally imported pharmaceuticals "could be identified as controlled substances which are per se illegal." Customs "could have the ability for on-site destruction."

Customs and FDA have developed a large backlog of suspected illegal pharmaceuticals at the 13 International Mail Branches in the U.S., due, in part, to time-consuming processing requirements, a Government Accountability Office report said.

Customs believes that the extension of its power would require legislative changes.

Coleman said he will work with Customs on the proposed legislation.

The Postal Service Office of General Counsel is exploring whether the Postal Service may already have the authority to destroy illegal pharmaceutical shipments.

The authority could rest in the combination of the prohibition on mailing dangerous substances with USPS's authority "to intercept and destroy lottery matter," submitted testimony says.

If USPS is found to have the authority, Customs could "open materials at the point of entry and determine that it is an illegal product," and the USPS could then "seek the destruction of it," Chief Postal Inspector Lee Heath explained.

Customs currently has authority to open mailings at points of entry. USPS and Customs are "exploring" the possibility of "cross-designating" Postal Inspectors with the power to conduct warrantless searches of suspected illegal drug mailings.

USPS would also like to have the authority to destroy "multiple mailings from the same supplier," Heath said.