BEHIND ONLINE PHARMA

Say Ahh! Doctors Feel the Pain of Online Pharma Crackdowns

A legal precedent makes e-prescribing even riskier for physicians

By Olivia Andrzejczak

Dr. Christian Hageseth III was in dire financial straits and running out of employment options. His medical license had been suspended. His attempts at gaining employment and then at entrepreneurship had failed. So he turned to the Internet, finally, in January of 2005: he signed a yearlong contract with JRB Health Solutions, an online pharmacy site and affiliate hub owned by Benjamin Kreis.

“A lot of people don’t believe it, but I actually had a very altruistic thing in mind,” Hageseth said in a recent interview. “If I could’ve practiced medicine in any other way, I would’ve.”

Just two days after he signed the contract, Hageseth, who had been a practicing physician for more than three decades, already had a number of prescription orders awaiting his approval. Kreis was on a schedule.

“I will tell you that I like to get out all orders that come in before 3:30 p.m. C.S.T.,” Kreis wrote Hageseth in a brief email on January 27, 2005, shortly after the doctor had signed up. “So if I could have all orders approved by that time it will be greatly appreciated.”

“For the most part,” Kreis further advised, “the orders are relatively simplistic and will not require phone consultation, but I do appreciate your commitment.”

Hageseth’s contract stipulated he would make $6.00 per reviewed prescription, whether he approved it or not. His work entailed logging on to JRB’s secure Web site and reviewing patient files and their responses to an online questionnaire. He then either declined or filled the prescription by electronic signature. During his stint with JRB, Hageseth reviewed more than 10,000 orders.

Some of the orders were simple, especially if the same individuals ordered the same medication regularly. “That’s a pretty quick review,” Hageseth says, adding that he limited himself to drugs he knew would not be fatal in overdose. “Others I would have to sit back and cogitate – but of course there’s not much information – I might take five minutes or so.”

Such has been the prevailing model for most online pharmacies, where facelessness and anonymity are the preferred standard. Web sites flash slogans such as, “Maintain confidentiality!” “No physical exams!” or “No embarrassing doctor’s visits!” Among all of those involved in an online pharmacy operation, it is the doctors issuing prescriptions who have given the entire operation medical legitimacy – or at least a semblance of it.

How did Hageseth feel doing it?

“Cautious,” he says. But he was out of a job after all, and driven, he says, by the millions of uninsured persons in the US. “Was the Internet perfect?” he asks, “No, but it was an attempt to make a difference. It goes back to this: 71 million people can’t afford to see the doctor. They’re getting no care. None.”

Sometimes the stakes are perceived to be high enough (or the situation dire enough) for physicians to willingly dilute the doctor-patient relationship. But with a federal crackdown on online pharmacies that has landed a number of doctors huge fines and some of them multiple-decade jail sentences, it is unclear how many more doctors will find the risk worth the reward.

What’s just as fuzzy, though, is how much rogue online pharmacies actually need physicians around – if at all.

The Crackdown

While issuing prescriptions over the Internet is not illegal per se, in recent years, federal regulators and attorneys general have begun going after online pharmacies which boast that no doctor’s visits are needed. According to the Diversion Control website of U.S. Department of Justice’s Drug Enforcement Administration (DEA), more than 150 physicians have been investigated, arrested and prosecuted since 2003 for violating the Controlled Substances Act, which regulates the manufacture, possession and distribution of certain substances, including narcotics. Of these cases, dozens of physicians were prosecuted for cooperating with an online pharmacy.

The Web site www.internetdruglaw.com, run by criminal defense attorney David R. Cooley, says more than 40 doctors have been indicted for violating the Controlled Substances Act by filling prescriptions for online drugstores. In nearly every case, doctors pleaded guilty. Their sentences have ranged from five months to 30 years in prison.

In 2005 Dr. Salvatore DeFrank, a podiatrist, was sentenced to 41 months in jail and two years of supervised release after he was charged with prescribing 59,990 units of the Schedule III drug Hydrocodone and Schedule IV drugs Alprazolam and Phentermine to customers of the online pharma site www.1stmeds.com.

In March 2006 Dr. Mario Alberto Diaz was charged with helping an online drugstore distribute 70,000 units of Schedule III and IV substances. Diaz claimed to have read patient questionnaires and responded to patients via email or phone before prescribing medication, but was charged with a felony count of money laundering and sentenced to 30 months in prison in addition to the forfeiture of more than $200,000 he made from the transactions.

Dr. Juan Antonio Ibanez, a pediatrician, amassed more than $85 million from a network of e-pharma sites he operated from 2003 until December 2007. He was charged with conspiracy to distribute drugs and money laundering after he used his DEA registration number to issue more than 74,000 units of Hydrocodone. Ibanez also hired physicians from Texas, Ohio, North Carolina, Georgia, Louisiana, and recruited and paid numerous independent pharmacies all over the US. He was sentenced to four years and three months in prison in 2008.

In 2008, the National Center on Addiction and Substance Abuse (CASA) at Columbia University found 365 Web sites either advertising or offering controlled prescription drugs for sale online. Of these, 185 sites did not require a valid prescription – meaning that in the overall scheme, doctors weren’t even a consideration.

"The Internet is international, and people will then be obtaining their prescriptions from Thailand, India, China, Mexico, and God knows where else."

Real Space vs. Cyberspace

“There’s going to be a consequence if this case – this precedent case of mine – will bring about a stopping of U.S. physicians providing these prescriptions,” says Hageseth, whose April 2009 sentencing is the latest, if not the gravest, in online pharmacy litigation. His case is the first involving a jurisdictional battle over whether prescribing via the Internet is akin to practicing in a given state without a medical license.

“The Internet is international,” he continues, “and people will then be obtaining their prescriptions from Thailand, India, China, Mexico, and God knows where else. But they will not be getting FDA-approved drugs, the pharmacies will not be registered pharmacies, and the physicians – if any – who review the medical records will not be U.S. physicians.”

A Vietnam veteran, Hageseth was a well-respected psychiatrist in Fort Collins, Colorado. But in 1995, he developed affectionate feelings for a psychiatric patient. Although, according to Hageseth, he stopped treating her and they eventually got married, the Colorado Medical Board revoked his license in 1999 for what it said was sexual misconduct. After two years, the Colorado Court of Appeals overturned the Board’s decision and reinstated his license with the restriction that he only practice ‘administrative medicine.’

Although Hageseth was forthcoming about the complications with his license, JRB Health Solutions took less than four days to approve his application when he applied. In a January 24, 2005 email to Kreis, Hageseth wrote, “…I have had a significant problem in the past. I understand that you may not want to contract with me in view of the past matters of my professional life…”

A day later Kreis responded, “I think you would be a very wonderful addition to our company, as I did not find any issues with situations that have occurred in the past.”

It went smoothly over the next couple of months. On at least two occasions, Hageseth said, he received written thanks from individuals who said that, by issuing them antidepressants, he had saved their lives. He estimated he made about $60,000 in nine months, with a prescription denial rate of roughly six percent.

Things took a very different turn that summer.

On June 11, 2005, 19-year-old John McKay visited www.usanetrx.com, an online pharmacy affiliate of JRB Health Solutions, and placed an order for 90 capsules of Fluoxetine. This generic form of Prozac was delivered to his residence in San Mateo, California.

Roughly two months later, on August 2, McKay was found dead in a car in his garage; a hose had been connected between the exhaust pipe and the driver’s side window. He had self-inflicted knife wounds on his arms and had left, on his laptop, a suicide note. The coroner said the cause of death was combined carbon monoxide and ethanol intoxication, but Fluoxetine was present in his bloodstream.

The McKay family sued Hageseth, Kreis and other partners of the pharmacy scheme for wrongful death, on grounds that the illegitimately supplied antidepressant caused their son to commit suicide. The civil case was dropped against all parties after medical experts and a San Mateo County judge found the drug had played no role in the young man’s suicide.

But the Medical Board of California began a criminal case against Hageseth for having practiced medicine in California without a California medical license. The Board contended that, by issuing a prescription via the Internet, Hageseth was practicing medicine in the patient’s state of residence .

San Mateo County Deputy District Attorney Jennifer Ow agreed: “The victim was in California and California law has the right to protect its citizens. I recognize he was never here, but he was prescribing medicine to someone here.”

But Hageseth’s attorney argued, “What if you live in one community and you drive to a doctor in a different state. Is your doctor committing a felony? If Hageseth is found guilty you are instantly retroactively making thousands of doctors into criminals.”

In the end, the court ruled, “It makes no difference that the charged conduct took place in cyberspace, rather than real space.” Last month, Hageseth was sentenced to nine months in jail and ordered to pay a penalty of $4,200 to the California Medical Board.

Although Hageseth said his cooperation with an online pharmacy was a financial advantage at the time, “as it has evolved, it has been a financial disaster beyond disasters.” He said he can no longer pay to the mortgage his house and has had to borrow more than $55,000 from friends and relatives. “My wife and I live from paycheck to paycheck, and have required the generous help of friends and family to literally survive. With respect to that it wasn’t worth it. With respect to the fact that I know two people are alive today because of what I did, that does give me some satisfaction,” he says.

He already has plans for after he completes his sentence. He has revamped his personal Web site and announced his founding of Depression Care Access, Inc., a nonprofit that aims to provide financial assistance to uninsured individuals suffering from depression.

“I’m pretty darn committed to it because I’m not going to let my life on this note,” he says.

Meanwhile, the online pharmacy network set up by JRB Health Solutions is still up and running, looking for affiliate sites and – for now – U.S. doctors.

A letter from David McKay

David McKay, the father of John McKay, wrote this letter in response to our article on some of the circumstances surrounding his son's death. We felt his contribution would add to the story, and have posted it here.

Thank you for the opportunity to clarify the facts of the civil wrongful death complaint filed by the family of John McKay against the online pharmacy participants, which you have described in your article.

First, the family was not arguing that the drug caused the suicide (although it does carry a FDA-mandated black box warning due to its documented significant risk of enhancing suicidiality in adolescents). The civil complaint argued that there was egregious, intentional professional negligence on the part of the physician and internet pharmacy group, due to their failure to provide the diagnosis and therapeutic intervention mandated by current standards of medical practice, and that the consequence of their negligence was failure to deter a suicide that likely could have been prevented.

There were three groups of defendants in the lawsuit: the physician (Christian Hageseth), the pharmacist Frank Gruich, and the Internet group headed by Benjamin Kreis. The Internet pharmacy group settled out of court. The presiding Judge Maxine Chesney dismissed the case against the pharmacist, and the pharmacist only, based on her opinion that he could not be held liable if it could not be proved that the death was a direct consequence of the toxicity of the drug. The plaintiffs felt this was a flawed judgment, and filed a motion to appeal, at which point the pharmacist settled out of court.

Judge Chesney did not dismiss the case against Christian Hageseth. In a written opinion, she stated, "With respect to Hageseth, plaintiffs have submitted sufficient evidence from which a reasonable trier of fact could find Hageseth's psychiatric treatment of John fell below the standard of care applicable to psychiatrists, as a result of Hageseth's not 'conducting a full psychiatric exam, a suicide risk assessment, an evaluation of his medical history, an evaluation of his substance use history, working to establish a therapeutic alliance, coming up with a treatment plan based on the psychiatric evaluation and other information and risk factors, and then arranging appropriate follow-up care as a result of that evaluation" (see Derish Decl. Ex. M at 4-15; Derish Decl. Ex. L (Scott Dep.) at 107:14- 22), and that if John had been provided appropriate treatment, his suicide "would have been prevented."  [U.S. District Court for Northern California case 3:06-cv-01377, Document 267, pp. 6-7].

Christian Hageseth refused to respond to the civil suit, and eventually he was dismissed from the case by the plantiffs' attorneys in order to allow the civil and criminal cases to proceed without cross-interference.

All drugs that require a prescription have significant medical risks; if they did not, the FDA would re-classify them for over-the-counter sale. Reviewing responses to a short online questionnaire, and verifying only that the credit card information on it is valid, does not constitute a legitimate diagnosis. (In passing, I will mention that after my son's death, I submitted a request through his JRB account for a refill of his Prozac prescription; it received physician approval within hours, even though he was deceased).

Providing prescription drugs under such circumstances will predictably lead to harmful outcomes in a significant fraction of cases, as it did with John McKay, and as it is doing in other cases I am aware of through people who have contacted me wanting to know how to address the problem. I do not believe that any significant fraction of the responsible medical community would concur that such under-diagnosis is preferable to no diagnosis at all.

John McKay paid $60 for his Prozac prescription; legal discovery revealed the wholesale cost to be about $3. With a profit margin exceeding 90 percent, it is clear that the sole purpose of online pharmacies that do not require a valid prescription is to generate income for the participants, regardless of any claims to the contrary.

When I was young, a hypothetical scenario my friends and I would occasionally pose to each other was: "If someone told you pressing a button might harm or kill someone on the other side of the world, and then offered you a million dollars to do it, would you do it?"

It was a disturbing moral dilemma, since we all knew that the combination of a possible large payoff and anonymity of the consequences would be very tempting. Unfortunately, we have members of the medical community – individuals who have taken an oath to do no harm – who are willing to press a computer mouse button to approve prescriptions for anonymous patients, without concern for possible harmful consequences, for just a few dollars.

It is a practice for which we should have zero tolerance.

Sincerely,
David McKay, PhD
Professor (Emeritus), Stanford University School of Medicine
Research Professor, University of Colorado, Boulder