DrugBuyers.Com: Article on Yahoo's Main Page about Internet Pharma

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U.S. Prescription Drug System Under Attack - first of five articles (washingtonpost.com)

LAS VEGAS -- In July 2001, regulators at the Nevada State Board of Pharmacy noticed something unusual among the reams of data that flow into the busy agency each day. Buried along with the other numbers was a report from a small Internet pharmacy that had filled 1,105 prescriptions for painkillers and other dangerous drugs that month.

The same tiny pharmacy had dispensed just 17 prescriptions in the prior six months overnight, prescriptiononline.com had become one of the largest distributors of controlled substances in Nevada. Over the next year, the online pharmacy shipped nearly 5 million doses of highly addictive drugs to customers scattered across the country. By the time regulators shut the Las Vegas firm in January, prescriptiononline.com accounted for 10 percent of all hydrocodone sold in Nevada, regulators said.

It turned out that the booming business was owned by a 23-year-old former restaurant hostess. But it was run by her father, who had been convicted of a felony in 1992.

"For any single pharmacy to account for 10 percent of any drug is incredible," said Louis Ling, general counsel to the Nevada pharmacy board. "The fact that it was a highly addictive painkiller and an Internet site run by a convicted felon was even more troubling. This was unlike anything we had ever seen."

With little notice or meaningful oversight, the Internet has become a pipeline for narcotics and other deadly drugs. Customers can pick from a vast array of painkillers, antidepressants, stimulants and steroids with few controls and virtually no medical monitoring.

There are dozens of legitimate online drugstores and mail-order pharmacies. Unlike rogue sites, they require customers to mail in prescriptions from their doctors. Typically, the legitimate sites offer a full range of medications, with painkillers accounting for less than 20 percent of their business.

In contrast, a majority of the rogue sites' sales are for hydrocodone, Xanax, Valium and a few other addictive drugs. Many work with middlemen who set up the sites' customers with doctors who are veritable script-writing machines. Some of those doctors have financial problems and histories of substance abuse or medical incompetence, records show.

The online merchants now feed a sprawling shadow market for prescription drugs, frustrating medical leaders alarmed by the threat to public health and investigators hard-pressed to keep up with nimble Web sites that can open and close at a moment's notice.

"It's like rabbits," said Wayne A. Michaels, a senior investigator for the Drug Enforcement Administration. "Every day, there are more of them. They're up, they're down, they're foreign, they're domestic."

The agency recently created a six-person task force solely to track the online trade in narcotics. But officials acknowledged the effort is a form of "triage" amid an escalating crisis. "We're afraid it's going to overwhelm us, once we've identified all these sites," said Elizabeth A. Willis, chief of the DEA's drug operations section.

The multimillion-dollar industry has appeared overnight, pumping millions of pills into some of America's smallest and most economically distressed communities.

The Washington Post obtained and analyzed a Nevada pharmacy board database of 30,000 orders filled by prescriptiononline.com. The analysis found that four of every 10 pills poured into four southern states with widely documented prescription-abuse problems. A disproportionate share of those drugs went to customers in small towns.

Some small Tennessee towns received 50 times more painkillers per capita than large cities, the analysis found. For example, Church Hill got 1,013 pills for every 1,000 residents; Nashville, just 26. Bristol got 1,584; Memphis, 14.

"It's a no-brainer why you see high volumes in these little places," said Tammy Meade, a narcotics prosecutor in Nashville. "Users and people who want to get their hands on enough to distribute can't doctor shop in places like that. And if they use the Internet, someone like me . . . is going to have a tougher time finding out."

Stretching from Florida to California, the Internet pipeline has left a trail of deaths, overdoses, addictions and emotionally devastated families.

"It absolutely blew my mind that you could get these drugs online," said Sue R. Townsend, the coroner in Aiken County, S.C. Her son Douglas, 30, died after driving his car into a fence in September 2001. His family said he had taken a generic form of the tranquilizer Xanax, which they said he had purchased from myprivatedoc.com, a now-defunct Web site in Mesa, Ariz. Townsend's family sued the Web site, the pharmacy and the Arizona doctor who wrote the prescription, accusing them of selling the drug without a proper medical consultation. The case was recently settled with no admission of liability.

"Losing Doug has broken our hearts," Sue Townsend said, fighting back tears. "He had a young wife and a baby boy who will never know his daddy. Somehow we have to tell how dangerous this is, because it's happening all over."

In a typical purchase from a rogue site, a customer logs on and orders hydrocodone (generic Vicodin and Lortab). The Web site steers him to a middleman, often another Web site, which arranges a telephone consultation with a doctor. The customer and the doctor talk briefly, after which the doctor writes the prescription and sends it electronically to the Internet pharmacy. The pharmacy ships 60 pills to the customer by overnight mail. Total cost: $290. The pharmacy pockets $190 for the hydrocodone and the doctor and the middleman split the remaining $100 as a consultation fee. There are no face-to-face meetings, lab tests, X-rays or follow-ups.

There are dozens of Web sites selling narcotics in the United States, with scores more operating offshore. Federal prosecutors have shut Web sites, filed indictments and won guilty pleas from several owners. But it often takes years to prove a case. In the meantime, the pills move.

For each site closed, "two or three more open," said Jennifer Bolen, a former federal prosecutor in Knoxville, Tenn. "It is so easy for them to close down a site one day and open a new one the next."

For the DEA, an agency already responsible for everything from drug cartels to street drugs, trying to police the growing number of online pharmacies "is like trying to work every corner drug dealer," said Laura M. Nagel, the agency's deputy assistant administrator. "We can't do it all."

When prosecutors shut the Internet pharmacy operations at thepillbox.com in San Antonio, much of the business shifted to prescriptiononline.com in Las Vegas, records show. When that site was closed two years later, Nevada regulators suspect the business shifted yet again -- this time to Florida.

Some Web sites have dozens or even hundreds of affiliate sites. Others are designed to appear as though they are headquartered in the United States when they are really offshore, in such places as Namibia, Thailand and Sri Lanka. The growing numbers of foreign online pharmacies operate with near impunity. The Food and Drug Administration (news - web sites)'s strongest recourse is to send a warning letter, which usually is ignored.

"As an investigator, it's incredibly frustrating," said Robert J. West, a special agent with the FDA's Office of Criminal Investigations. "All we can do is bang away and try to draw attention to what these guys are doing. Right now, I don't think people have any idea how widespread or dangerous this is."
Little Regulation

States regulate pharmacies, creating widely different rules governing Internet sites. Under-staffed pharmacy boards barely have time to inspect brick-and-mortar pharmacies, let alone virtual ones. Many online pharmacies have ignored state efforts to register them. Only one state -- California -- has a full-time agent investigating doctors writing prescriptions for Internet pharmacies.

The lax oversight comes amid Congress's inability to pass legislation requiring even minimal disclosure by Internet pharmacies.

In 1999, then-Rep. Ron Klink (D-Pa.) issued a warning at a committee hearing: "I am concerned a 'Wild West' world is unfolding before us, where many consumers are accessing potentially dangerous drugs with little or no practical guidance. Yet because it is e-commerce, there is a mentality: It must be progress."

In 2000, the FDA, the General Accounting Office (news - web sites) and several House members urged that online pharmacies be required to disclose their owners, locations, doctors, affiliated pharmacies and telephone numbers. But Congress never followed through. Nearly four years later, there is still no disclosure requirement.

"Getting a bill regulating the Internet is about as hard as it gets," said William K. Hubbard, the FDA's senior associate commissioner. "You have all of these people worrying about stifling this wonderful thing . . . and they don't want the bad Feds in there."

A Post reporter sent e-mail asking for identifying information to 15 online pharmacies specializing in painkillers. Only one responded. It declined to say who owns the site or where it is located. One online pharmacy included a telephone number for customer service that linked to a freight forwarding company in Miami. When a reporter called, a secretary said that it moved shipments for a customer in Costa Rica.

In late 1999, the National Association of Boards of Pharmacy instituted a voluntary system for certifying online pharmacies, including inspections and disclosure. But of the hundreds of Internet pharmacies now operating, only a "dozen or so" signed up, said Carmen Catizone, the board's executive director. Most of those are large, legitimate sites, such as drugstore.com.

One pharmacy that received certification was prescriptiononline.com. "I can't explain what happened there," Catizone said. "I know we certified it originally, and then later on we got some complaints, and we suspended their certification. Obviously, if we knew then what we do now, we never would have certified them."
Easy Licenses

Regulators in Nevada faced a similar situation in April 1999 when Terri Suarez applied for a license to operate an online pharmacy called prescriptiononline.com.

No one at the Nevada State Board of Pharmacy had ever heard of Suarez. She was not a pharmacist. She was not even from Nevada. She was based in Louisiana. But all Suarez had to do to get a license was show that she had a corporation.

"At that time, our whole application was essentially a page and a half," said Ling, the board's counsel. "It was essentially nothing. I don't even think she had to prove she had a business license."

Her application was approved.

Nevada regulators did not know that Suarez operated a closed-door pharmacy in Jefferson, La., called Pharmaceuticals Southwest Inc. On paper, the tiny company was set up to sell discounted drugs to nursing homes. But when an inspector showed up in November 1999, there were no drugs to be found.

"It was definitely a front," Carlos M. Finalet III of the Louisiana Board of Pharmacy said later. "It had no stock. The pharmacist sat there reading a book."

Suarez denied buying any drugs, even when she was confronted with invoices bearing her signature, according to a complaint that the Louisiana board filed against Suarez's company. The board determined that Suarez had indeed purchased drugs -- $1.2 million worth in two months from Bindley Western Industries Inc. But inspectors could not find them.

Based on Suarez's "complete disregard for pharmacy laws," the board revoked the company's license and fined it $100,000. But the board has been unable to collect, and Finalet said Suarez's whereabouts are unknown .

Nevada regulators did not know about Suarez's troubles when her name resurfaced in March 2001. That month, they received notice that she had sold her interest in prescriptiononline.com to Melissa Cosenza, 23.

The regulators blanched. Cosenza's father is Michael R. Cosenza, who has a long history of working at the margins of drug distribution in Nevada and elsewhere.

"We knew immediately that he was using her as a front," Ling said. "What we didn't know was what he was up to."

At a hearing, Melissa Cosenza confirmed that her father was going to be a consultant to prescriptiononline.com. "She had supposedly bought the company for $50,000, payable at $5,000 a year," Ling recalled. "Who buys a pharmacy for $50,000? It sounded as hokey as could be. We started asking her questions. It was pretty obvious she didn't know anything about the business."

In April 2001, Melissa Cosenza submitted an application for a license, stating that she owned all of the company's stock. She gave a home address near San Diego. Under work history, she listed jobs as a restaurant hostess and salon receptionist.

Nevertheless, she qualified for a license. "I suppose it looks pretty embarrassing but really there wasn't much we could do," Ling said. Under the board's existing rules, "I really can't deny someone a license just because they come from a family and I know they are going to do something bad as soon as I give them a license."

Nor was there much the board could do about Michael Cosenza, 60, whose consulting business Med-Pharm Inc. would be running prescriptiononline.com.

Cosenza had pleaded guilty to grand theft in 1992 in Inyo County, Calif., for stealing more than $100,000 from a health care construction project, court records show. He later was incarcerated in 2000 for six months on a charge related to the earlier case. In October of that year, he had that case dismissed and expunged from his record.

"There was no way Michael as a convicted felon could qualify for a license," Ling said. "But under the law at the time, we didn't have the ability to take action against a pharmacy based on who was employed. It's probably still unclear today if we could stop him from operating the company."

It was not the first time Cosenza had worked around his past.

In April 1997, the California Board of Pharmacy said that Cosenza was operating two closed-door pharmacies licensed under the name of his wife, Barbara Jackson Cosenza. According to the board's official accusation, the two pharmacies were supposed to purchase prescription drugs at a discount and sell them to nursing homes.

"In reality, both pharmacies were actually wholesale businesses in which hundreds of thousands of dollars of dangerous drugs were . . . sold to other wholesale companies," the state board alleged. "Some of these drug shipments were delivered to the San Diego office of a courier and picked up by non-licensed agents. . . . Upon occasion, these dangerous drugs stayed with the courier for days without proper storage or supervision by a registered pharmacist."

According to the accusation, Michael Cosenza had held himself out as the owner of the two pharmacies "and conducted business transactions on behalf of both pharmacies." The California regulators said he did not qualify for a license because of his 1992 felony conviction. In December 1998, Cosenza's wife agreed to surrender the two licenses.

In January 2002, Barnes Wholesale Drugs Inc., a California drug distributor, sued Cosenza. The wholesaler charged that it was owed $529,000 for drugs purchased by an Oregon company called Pharmaceuticals Northwest Inc. The firm was run by Cosenza's stepfather, George Kemmler, 74, a retired snack food deliveryman with diabetes and "blindness in one eye." Barnes alleged that Cosenza paid Kemmler $1,500 a month to act as a straw man. Kemmler declined to comment for this article.

Barnes also alleged that the company was diverting drugs meant for nursing homes to another wholesaler in Las Vegas.

In a deposition, Cosenza denied any role in the diversion. He settled the lawsuit in 2002 by agreeing to pay Barnes $514,000. But he fell behind on the payments, and a judgment was entered against him for $658,000.

Cosenza and his daughter declined to be interviewed for this article. In a court filing in 2003, his lawyer said that prescriptiononline.com was a legitimate pharmacy that complied with all of Nevada's laws and regulations.
Booming Business

With Michael Cosenza behind it, prescriptiononline.com's business surged. Between July and December 2001, the online pharmacy filled 18,499 prescriptions, compared with just 17 in the prior six months. Nearly all were for controlled substances.

"Normally, with any retail pharmacy, you would expect 15 to 20 percent of the sales to be painkillers," Ling said. "Prescriptiononline turned that upside-down. They reversed the model."

Located in a small business park in northwest Las Vegas, prescriptiononline.com did not employ its own physicians. Unlike some other sites, it relied on doctors to steer business its way. All of those physicians were in other states and were associated with middlemen who arranged brief telephone conversations with patients in return for a fee. Two of the doctors -- Jon S. Opsahl and William Dale from California -- quickly became the two most prolific prescription writers in Nevada, regulators said.

In March 2002, Ling told prescriptiononline.com's attorney that he was concerned about the volume of controlled substances. Sherwood N. Cook wrote back that prescriptiononline.com believed that its product mix was consistent with that of other Internet pharmacies, and that "a majority of the drugs filled by Internet and mail-order pharmacies are controlled substances."

One of prescriptiononline.com's customers was Nancy Harler, a former nurse, of Columbia, S.C. She had been getting her painkillers from thepillbox.com. But after that site's legal problems arose, prescriptiononline.com began filling her orders for hydrocodone.

Harler said she had started ordering hydrocodone online for migraines and arthritis in February 2000. In all, she estimated that she spent $10,000 and used more than 1,500 pills. "It just got to the point where I was no longer in control and knew I needed help," she said.

Harler is now undergoing methadone treatment for her addiction, which she said was fed by the online pharmacies. "If you ask them anything about the money, they say we'll be glad to pull the plug. They know they have addicts on the line," she said.

Most of prescriptiononline.com's customers sought painkillers. The Post's analysis showed nearly 90 percent of the orders were for controlled substances, including hydrocodone and the generic equivalents of Valium and Xanax.

For years, hydrocodone has been one of the most used and abused drugs, according to the DEA. Sales have soared, and so have thefts of the drug and hydrocodone-related emergency room admissions.

The street value of hydrocodone is also climbing, said Tony King, the agent in charge of the DEA's Louisville office. A single generic tablet that costs an online pharmacy 15 cents may be sold to Internet customers for $1.50. On the street, that same tablet may go for "$3 to $5," King said. Overall sales of hydrocodone in Kentucky have doubled in the past four years, to 120 million tablets.

The surge began a few years back, when doctors alarmed by OxyContin abuse began switching patients to hydrocodone, King said. "But hydrocodone is equally dangerous," he said. "It's kind of like: Do you use a .38- or .40-caliber gun to shoot yourself?"

A breakdown of prescriptiononline.com's sales by Zip code revealed that four of every 10 pills flowed into Alabama, Tennessee, Louisiana and Kentucky. Those four states routinely rank among the top five nationally in the per-capita use of hydrocodone and Xanax, according to law enforcement data.

The pills poured into small towns. In Hope, Ky., with a population of 152, customers bought 7,910 pills -- an average of 52 pills for each resident. In Gunlock, Ky., population 430, customers bought 2,910 pills, about seven per person. By contrast, in Louisville, Kentucky's biggest city with a population of 206,239, customers bought 5,810 pills, about 0.03 per person.

In some cases, these orders went to multiple customers listed at the same address. For example, over five months 2,030 pills were shipped to five customers at one home in Baileyton, Ala. More than 80 percent were hydrocodone.

In an interview, Opsahl, the California physician who wrote the prescriptions, said he was aware that customers occasionally listed the same address, but not to the extent detailed in The Post analysis. "I didn't have that data at the time," he said, calling the information "very disturbing. You've presented some information that certainly gives me some pause how this whole system can be blatantly abused and easily abused."

Still, Opsahl maintained that most Internet patients have legitimate needs.

That view is not shared by Mike Vories, a physician who runs a pain management clinic in Hazzard, Ky.

"How in the world does an Internet Web site have any control over whether that controlled substance is going to a patient with a legitimate complaint?" he wondered. "Really, come on. Let's call this for what it is. A few maybe are legitimate and have pain. For the majority, it is a source of income."
Long Investigation

Alarmed by prescriptiononline.com's sales of controlled substances, Nevada regulators alerted the Las Vegas office of the DEA in the summer of 2001. Ling hoped for quick action. But the investigation stretched over months.

In the fall of 2001, DEA agents made undercover purchases from the Web site. In March 2002, DEA agents searched prescriptiononline.com's small office and seized business records. But the agents allowed the company to remain in business.

It would be 10 months before the DEA took away prescriptiononline.com's license to sell narcotics, declaring it "an imminent danger to the public health and safety" and seizing 21 boxes of drugs worth $143,000. By then, the company had moved about 1.8 million more doses of dangerous drugs.

When the DEA acted, the pharmacy board formally accused prescriptiononline.com of more than two dozen violations, including dispensing dangerous drugs where there was no valid physician-patient relationship.

On Jan. 22, Michael Cosenza and prescriptiononline.com agreed to relinquish the company's license and pay $200,000 in fines. The deal prohibited Cosenza or any member of his family from applying for a pharmacy license in Nevada for two years.

Melissa Cosenza did not attend the hearing.

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