How Big Pharma Censors the Internet
by Wolf Richter, Wolf Street:
Government quietly involved behind the scenes
Americans pay by far the highest prices in the world for most prescription drugs, and of course big pharma would like to keep it that way. Key measures that the industry relies upon in this regard are the Prescription Drug Marketing Act [PDF] and Ryan Haight Online Pharmacy Consumer Protection Act [PDF], which make it unlawful for most Americans to access lower-priced drugs from overseas, coupled with the powers of U.S. Customs and Border Protection (CBP) to seize such drugs at the border on their own initiative.
In practice however, discretionary guidelines developed by the Food and Drug Administration (FDA) and enforced by the CBP allow American consumers to import a 90-day supply of some prescription medications for personal use, including by bringing them across border checkpoints in personal luggage, or by mailing them from overseas. In the latter case, a large market exists for pharmacies registered in other countries such as Canada, Australia and Turkey, that will accept online orders and mail genuine pharmaceuticals to American consumers at cheaper than local prices.
Big pharma doesn’t like this [PDF], but since the importation is already technically against federal law, they can’t do much more about it. At least, not through legal channels…and that’s where they get creative. As we described last week, where industry can’t get government to regulate the Internet in the way they want, they frequently turn to private deals with Internet intermediaries that we’ve termed Shadow Regulation.
Big pharma is a major proponent of this practice, having spearheaded a range of such private deals that they use in an attempt to quell the supply of prescription drugs to Americans through overseas online pharmacies.
This private censorship regime insinuates multiple links in the chain between Internet content and its audience. This includes blocking blacklisted pharmaceutical websites from access to payment services [PDF], online advertising services, and domain names. You might assume that the various terms of service of these companies, although all addressing online pharmaceutical sales in a similar way, were devised independently and voluntarily. But that isn’t the case.
Profile of a Shadow Regulation Network
This particular Shadow Regulation network contains a confusing web of similar-sounding organizations with overlapping memberships, such as the Alliance for Safe Online Pharmacies (ASOP) and the Center for Safe Internet Pharmacies (CSIP). In simple terms the former is comprised mostly of the pharmaceutical industry, whereas the latter pulls in its partners such as Internet platforms (Facebook, Google, Microsoft and Yahoo!), payment processors (PayPal, Mastercard, and American Express), delivery providers (UPS), and domain name companies (GoDaddy and Rightside).
A third key player is LegitScript, which was instrumental in the formation of both ASOP and CSIP, and carries out most of the operational level arrangements that are agreed at a level of principle by those organizations. Internet users are not represented at board level in either ASOP, CSIP, or LegitScript.
A hallmark of Shadow Regulation is that government is also often quietly involved behind the scenes, and so it is here. The formation of the CSIP was announced at a White House-hosted industry event [PDF] on October 14, 2010, following months of talks between the administration and the CSIP’s founding industry members. Similarly, LegitScript is led by the former Assistant Secretary of Homeland Security for Immigration and Customs Enforcement, and subsists on lucrative contracts from government as well as from private industry.
With this framework in place, the “voluntary” adoption by Internet intermediaries of measures that primarily benefit the pharmaceutical industry suddenly becomes very easily explicable.
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