Enter the DRUGS Act: how proposed legislation will aid in the fight against counterfeit medicines

In this co-published analysis, Sunstein’s Bryan Harrison explores the challenges posed by illicit online pharmacies, and the legislation that could help pharmaceutical companies fight back.

On 15 and 30 December 2021, the US Senate and the House, respectively, introduced versions of the Domain Reform for Unlawful Drug Sellers Act (the DRUGS Act). The two are nearly identical and are intended to provide a relatively straightforward mechanism for shutting down illegal online pharmacies. This analysis will provide a brief overview of the need for such a law, drill down into the provisions of the bill as currently drafted, and explore how pharmaceutical companies can leverage the current version of the bill to protect their trademarks.

The problem facing pharmaceutical companies and regulators

The proliferation of online pharmacies has caused numerous problems for government and state agencies seeking to regulate the sale of prescription drugs, consumers who do not know whether certain online pharmacies can be trusted, and pharmaceutical companies seeking to protect their brand and prevent the sale of illegal, fraudulent or knock-off products.

In 2018, a study by the National Association Boards of Pharmacy (NABP) found that keyword searches for certain drugs on social media platforms resulted in links to illegal pharmacies 38% of the time. Even worse, the study found that “95% websites selling prescription drugs online are doing so illegally.”

The problem only increased during the COVID-19 pandemic, with people stuck at home and buying products online. The NABP found that over 90% of the COVID-related domain names utilise anonymised domain name registration, an indicator that such websites are fraudulent and not legitimate pharmacies

Current efforts to curb illegal online pharmacies are limited. Since June 2016, the US Food and Drug Administration (FDA) has sent 85 warning letters to illegal online pharmacies, which represents a small subset of all illegally operating online pharmacies.

The NABP is actively working to help educate consumers on safe and unsafe online pharmacies. It maintains lists of both safe and unsafe online pharmacies and the list of unsafe online pharmacies numbers in the thousands. But letter writing and education efforts can only go so far when these entities are battling an estimated 35,000 online pharmacies, only 5% of which are legal.   Currently, there is no streamlined method for stopping the proliferation of these illegal online websites, which would cut these illegal pharmacies off at the source.

Enter the DRUGS Act

The DRUGS Act, which is premised on a successful pilot programme between the FDA and the National Telecommunications and Information Administration, would provide a uniform, and relatively simple, means for combating illegal online pharmacies. As stated in the one-pager issued by Senators Rubio (R-FL) and Klobuchar (D-MN), the need for the Act stems from the illegal sale of opioids, which has ravaged communities across the United States. Importantly, however, the Act is not restricted to illegal pharmacies selling opioids but would apply to any illegally operating pharmacy.

In its current form, the Act would allow certain government agencies, non-profits, or other entities (each a ‘trusted notifier’) to notify a registry operator or registrar, the entities that manage domain name registration or maintains a registry of domain names, that a particular “domain name is being used to facilitate the online sale of drugs illegally”. Within 24 hours of receipt of such a notification, the “registry operator or registrar” is required to “lock the domain name” and, within seven days, “suspend the domain name.” The registrar or registry operator does not have discretion and must act upon notice from a trusted notifier. 

The Act would allow the FDA, DOJ, DEA, DHS, a state attorney general, a state board of pharmacy, certain non-profits, or “any entity currently under contract or in a public-private relationship with the [FDA] or [DEA] to share information related to online drug sales,” or “any other entity identified by the [FDA]…for the purposes of” the Act to provide notice to a “registrar or registry operator”. These are the trusted notifiers, authorised to provide notice of an illegal online pharmacy to the registrar or registry operator.

The registrant has the opportunity to appeal but the website remains locked or suspended during the pendency of the appeal. The appeal procedure requires the registrant to provide certain authenticating documentation to the trusted notifier and for the trusted notifier to “conduct a reasonable investigation” and “determine whether notification [] was improper.”

Similar to the mandatory language requiring a registrar or registry operator to suspend a domain upon notice, the appeal provision presumes that the notice was proper, and that the pharmacy was, in fact, an illegal online pharmacy. 

In the event of a successful appeal, the registry operator or registrar must unlock the website within 15 days.

What the DRUGS Act would mean for pharma companies

Pharmaceutical companies can leverage the DRUGS Act to not only protect consumers from knock off products or other illegal sales, but also their brands. A pharmaceutical company could become a trusted notifier by being “any other entity identified by the [FDA]…for the purposes of” the Act to provide notice to a “registrar or registry operator”.

To become a trusted notifier the pharmaceutical company would have to be registered to do business in the United States, agree to share notification data with the FDA and DEA, does not knowingly do business with businesses that violate FDA and DEA regulations, and publishes on its website the policies and procedures that it will be following for the issuance of notifications. These are simple, baseline requirements that many pharmaceutical companies, and likely all with a US presence, can meet.

Pharmaceutical companies have a vested interest in becoming a trusted notifier because, apart from the vast good that comes from protecting consumers, the companies can protect their own brands. In order to maintaining trademark protection, brands must enforce their own trademarks by sending cease and desist letter, petitioning the TTAB, or filing litigation. This would be an insurmountable and endlessly expensive task for enforcement against faceless websites numbering in the tens of thousands. But the DRUGS Act provides a mechanism by which pharmaceutical companies could avoid such costs by just policing online traffic for illegal online pharmacies.

Such policing and reporting does not prevent new websites from being created, but it does create a simple and cost effective mechanism for pharmaceutical companies to protect their brands.

Alternatively, pharmaceutical companies could work with the FDA (or DEA or DOJ) to police illegal online pharmacies and report them to the necessary individual(s) at the FDA. In this way, the pharmaceutical company avoids the added burden that comes with being a trusted notifier of having to consider appeals by website owners who plan to contest the allegation that they are operating an illegal online pharmacy.

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