The Clinton administration is proposing that all Web sites selling prescription pharmaceuticals online be licensed by the Food and Drug Administration. This unnecessary move is first a far-reaching assault on e-commerce freedom. Second, it is more generally an attempt to preserve a failing regulatory system that is being undermined by the Internet. And third, it is part of the administration's effort to foist Clinton care on the public via the installment plan.
Licensing pharmaceutical Web sites is pitched as asmall move to protect the public from the sale of counterfeit products.Currently, pharmacies are licensed by state governments, but since Internetpurchases often are placed, processed and shipped in different states, thefederal government claims it should regulate such sales.
But a similar argument might be made for the federalregulation of all e-commerce to prevent fraud, sales of defective orcounterfeit products, or fly-by-night operations that steal credit cardnumbers or never ship orders. Such actions already are crimes that shouldbe prosecuted, and Internet entrepreneurs themselves are developing ways toprevent such abuses. For example, the survival of Amazon.com andother reputable Web sites depends on customers who trust them enough todivulge credit card numbers and to believe that the products will arrive.Those firms have developed safety mechanisms on their own, withoutgovernment regulators.
Honest Internet entrepreneurs selling pharmaceuticals canformulate effective, private consumer protection guidelines andprocedures. Those that subscribe to them can post on their Web sites a sealof approval similar to the Underwriters Laboratory seal for electricaldevices. And naturally they advertise that customers deal withnon-certified Web-based firms at their own risk.
The proposal that Web sites selling pharmaceuticalsbe registered with the FDA is also government's reaction to the fact thatthe Internet is undermining the raison d'etre of the Securities and ExchangeCommission, the Consumer Product Safety Commission and many other regulatoryagencies.
For example, the justification for the existence of the FDAis that neither doctors nor patients have the information available to judgethe safety and efficacy of medicines. Thus the FDA must certify the truthof any claims by pharmaceutical manufacturers about their products. Thisprocess often takes years, adds billions of dollars to the costs of drugsand leaves thousands of patients suffering or dying while waiting formedication. The FDA exercises strict censorship over everythingmanufacturers can say about their products. If FDA doesn't approve it, itis a crime to say it.
But the Internet is allowing individuals to take theirhealth care more into their own hands. Today, most individuals returninghome from the doctor can go online to seek information about their illnessand participate in discussion groups for patients with similar problems.There is no reason, save FDA prohibitions, why pharmaceutical manufacturerscan't post test results for their products online for all to evaluate, andallow their representatives to answer questions in chat rooms.
The FDA realizes that the Internet and free access toinformation in general threatens its existence. That is why on October 24,1995, it held a conference on regulating Internet and censoring information.Of course, it is easy to post information on Web sites in other countries(as well as to sell pharmaceuticals from overseas Web sites), thusrepresentatives of other governments and of the World Health Organizationalso attended.
The FDA is particularly prone to overreaching withits power. For example, it tried to classify a urine sample cup in a HIVhome testing kit and a hair sample envelope in a drug testing kit as Class 3"medical devices" in the same category as heart valves requiringstrict regulations. It claimed jurisdiction over outdoor laser light showsin Las Vegas that supposedly were interfering with aircraft because lasers,even used for entertainment, are classified and can be regulated as medicaldevices. We can only imagine the new ways FDA will devise to limit onlinespeech and control e-commerce.
The plan to register Web sites selling pharmaceuticals alsois part of theClinton administration's attempt to implement its healthcare plan in installments. In 1993 Hillary Clinton attacked withparticular vitriol the pharmaceutical industry, which she blamed in part forhigh health care costs and saw the need to regulate. Americans decisivelyrejected her plan for socialized medicine. And recently the administrationrenewed attempts to regulate pharmaceuticals. For example, it is proposingthat the prices of drugs for seniors be controlled and that the governmentin effect become the purchaser of such products for the elderly. This isclearly an attempt to exert control over pharmaceutical manufacturers andhealth care consumers.
Where government would try to restrain some drug costs byforce, Internet sales can hold down the prices of medicines the wayAmazon.com helps hold down the price of books through competition. TheInternet also places a large part of the health care sector beyond thecontrol of government, something that runs contrary to Clinton's plan forhealth care.
The Clinton administration's Web site registrationplan is clever. It would begin massive regulation of e-commerce, provide amodel for preserving regulatory agencies from the Internet threat, and helpsocialize health care in the bargain. For these reasons the plan should berejected.