State agency hits online pharmacy with fine

By Timothy Pratt (contact)

Thursday, Jan. 23, 2003 | 11:13 a.m.

In a watershed case involving prescription drugs sold over the Internet, the state agency charged with regulating pharmacies levied its second-biggest fine ever Wednesday.

The settlement, negotiated in the State Board of Pharmacy's three-day meeting that ends Friday, included a fine of $200,000 against Michael Cosenza, manager of Prescriptiononline.com. There were also fines of $3,000 and $1,500 against Joseph Peter Auralle and Julie Jean Levitt, respectively -- the pharmacists who filled prescriptions for the company.

The case marked the first time the state had examined and ruled on Internet pharmacies, a business under growing scrutiny by state boards and federal agencies such as the Drug Enforcement Administration nationwide.

"It was probably the first of many to come," said Louis Ling, general counsel for the board.

"The concern is that Internet pharmacies pose dangers, whether it's through people getting drugs who might be inappropriate candidates ... (or) prescription drug addicts, furthering their addiction."

Larry Pinson, president of the board, said the case demonstrates the dangers of Internet pharmacies to the public.

"It puts Internet pharmacies on (notice) that we're going to be monitoring them," he added.

The complaint that led to the settlement was based in part on the business being a danger to public health. The diagnoses were made over the phone so the doctor never saw the patients for whom the prescriptions were filled.

Officials do not know where the website was operated from, but drugs were shipped out of a warehouse on Smoke Ranch Road in Las Vegas.

Since setting up shop in July 2001, the online pharmacy sold more than nearly 5 million doses of hydrocodone, a painkiller that has been linked to addiction nationwide, Ling said. About 90 percent of the business' prescriptions were for painkillers, compared to a share of 15 percent found in the average pharmacy, he said.

"This was an online pharmacy that was dispensing literally tons of controlled substances, and this is very disturbing," Pinson said.

As part of the settlement, the company and its manager had their pharmacy licenses revoked. Auralle had his license suspended for one year, while Levitt's license was suspended for six months. The settlement was reached without a hearing or showing of evidence, and implies no admission of guilt or innocence.

The $200,000 fine was the second largest the state board has ever levied, Ling said. Cosenza, a convicted felon in California, paid $50,000 of the fine Wednesday and will pay the rest over the next two years.

In a case that was settled in 2000, the board assessed a $1 million fine against a pharmacy wholesaler in Minden. "(But) I don't know if that will ever be collected, since it was levied against a company that's now bankrupt, not an individual, and it's still under appeal," the attorney said.

Contacted at home, Auralle declined to comment on the settlement, but he said the case brought up larger issues.

Most of them have to do with the newness of the Internet and the rules and regulations involving its use.

"I don't think the rules are firmly set, and it's still a gray area," he said.

"People are striving to make it as perfect as they can but they're still not aware of what's involved."

Part of the problem is cultural, Auralle said.

"Our society thrives on this. You open a magazine or turn on the TV and one of every four ads is, 'Take a pill,' " he said.

The pharmacist, who has been licensed to practice in Nevada since 1977, said people who have a legitimate need for painkillers such as hydrocodone may be affected by crackdowns on Internet pharmacies, and doctors may be hesitant to prescribe to these patients if under pressure from agencies such as the DEA.

He also said states are quickly making their own laws to control the sale of drugs on the Internet, but these laws vary and there remains a lack of federal control over online commerce.

Nevada's law took effect in October 2001 -- after Prescriptiononline.com began selling drugs online, Ling said. Among other regulations, the law says that Internet pharmacies must register with the state as an online business.

"We couldn't use that law in this case, but subsequent Internet pharmacies will have to comply," Ling said.

Auralle said he has no immediate plans. "I still have to pay bills," he said. "I can find a job, and if it's not filling prescriptions it could be shining shoes or washing cars."