ON-LINE PHARMACIES: Illinois Sues Four Cos. for Fraud

      Illinois state prosecutors filed four lawsuits yesterday against out-of-state physicians, pharmacists and internet-based companies alleging that they are not licensed to prescribe medications in the state, the Chicago Tribune reports. The suits, filed in Sangamon County circuit court in Springfield, also charge that the Web sites "failed to disclose to consumers that they lacked required licenses" to write and fill prescriptions in the state. Named as defendants are expresstoday.com, mdhealthline.com, rxclinic.com, and maleclinic.com. Illinois Atty. Gen. Jim Ryan said, "Internet (Drug) sales in and of themselves are not illegal. But you can't use the Internet to sell prescription drugs if you're not a licensed doctor or you're not a licensed pharmacy. That is illegal" (Holt, 10/21). Ryan indicated that the suits stem from an ongoing undercover investigation that found the companies were not performing adequate background checks to ensure patients' claims were genuine. Ryan asked the court to bar the companies from conducting further transactions in the state. Most companies were unavailable for comment on the pending litigation. Gary Henglefelt, owner of Plaza United pharmacy of Phoenix -- which dispenses drugs prescribed by M.D. Healthline, denied the allegations, saying, "As far as I know, there is no law against a pharmacy from out of state sending drugs to the state of Illinois. If a law could be produced that is correct, we would stop selling in Illinois. Obviously we want to comply with state law." Robert Drucker, president of New York-based Parsons Medical Center Pharmacy, Inc., named as a defendant in the suit along with the Male Clinic of Los Angeles, said, "We have never violated an Illinois laws to our knowledge" (Robinson, AP/St. Louis Post-Dispatch, 10/22).

A Bit of Context
      The suits come at a time when Web-based pharmacies are increasing in popularity, raising ethical and safety concerns, since many do not have extensive physician oversight. Dr. Clair Callan, president of the Illinois State Medical Society, said the Internet prescriptions "can be a very dangerous practice" because the physicians do not have adequate background information regarding the patient's medical history (Chicago Tribune, 10/21). Ryan said, "Prescription medicines should only be dispensed under the care and supervision of properly licensed doctors and pharmacies. We are alleging that these defendants were ignoring the law and putting any consumer who has a computer and a modem at risk" (Gilbertson, Arizona Republic, 10/22).

Drugstore.com Loses
      In related news, in its first quarter as a public company, Drugstore.com posted a $42 million dollar loss, the Seattle Times reports. The Bellevue-based company lost $29.1 million, or 72 cents per share, excluding charitable and stock-based compensation. Sales totaled $12.1 million and customer accounts grew from 260,000 to 428,000 during the quarter. Company officials attribute the loss to advertising costs, which total nearly $200 million annually. President and CEO Peter Neupert said, "If we get in front of customers, they will try us" (Black, 10/21).