The International Commission for Assigned Names and Numbers (ICANN) has terminated rogue Internet pharmacy sponsor ESTDomains.

That’s great news, and it’s big. EST Domains is a huge sponsor of rogue Internet pharmacies. Of the domain name registrars that we track, it’s probably number two or number three, depending on how you calculate it.

But let’s back up. For those who don’t follow this issue, a domain name registrar is an entity authorized by ICANN to sell domain names. For example, when we decided to use the name LegitScript.com, we went to Network Solutions and registered that domain name. Any DNR like Network Solutions, GoDaddy or eNom can only sell domain names as long as ICANN continues to give them permission to do so.

ESTDomains’ problems began with the fact that Vladimir Tsastsin, the President of the Company, was convicted of several crimes, including forgery and credit card fraud. This is contrary to ICANN rules, and is grounds for termination. But the real impetus for the termination was the fact that an overwhelming number of rogue websites (Internet pharmacies and others) looked to EST Domains as a safe place where, regardless of what sort of illegal activity they engaged in, they wouldn’t be terminated. For several months, a loose coalition of online safety organizations like KnujOn and CastleCops pressured ICANN to adhere to its own standards, which allow termination for this sort of illegal activity.

But here’s the question: what happens to the 281,000 domain names currently registered with ESTDomains? ICANN policy requires that they be transferred to another DNR within the next several weeks. On the one hand, some websites are legitimate and we hope that their operations aren’t affected. But plenty are rogue sites engaged in illegal activities involving malware, counterfeit pharmaceuticals, and other illegal activity.

This is the perfect opportunity to get those websites terminated. Will it happen? Stay tuned.

UPDATE: ESTDomains has alleged that Tsastsin had already resigned and is appealing the decision. ICANN has agreed to stay the termination pending their review of ESTDomains’ request.

Mesomorphosis.com, a steroid law reform website, emailed us with some questions about our request to GoDaddy and other US-based registrars to terminate some steroids websites. (See Mesomorphosis’ blog on the same topic.) Most, but not all, of the websites were terminated.

Mesomorphosis asked some great questions, and we’re happy to answer them below. (NOTE: We abbreviated a couple of the questions for the sake of brevity.) Feel free to download the original steroids report as background.

1. LegitScript has asserted that it is irrelevant that some steroid pharmacies are operating legally within their respective countries. Is it fair to identify a steroid pharmacy website as illegal or “rogue” in the absence of proof that they are violating any laws? After all, products on a website are marketed to a worldwide audience (including residents of the United States) due to the very nature of the Internet.

Yes, it’s fair. These websites all allow the sale of these products to the US from outside of the US, which violates numerous US laws and is unsafe. In many cases, the “default” setting for a country selection is the United States (or, the United States is the top selection) and the FAQs talk about what to do if US Customs intercepts the package. It’s naive to pretend that the US isn’t the intended audience in these cases.

We have rarely, but occasionally, found prescription drug websites that do not allow the product to be ordered if the shipping address is in the United States. We leave those websites off of our lists. All that a steroids website has to do is remove the ability for a recipient in the US to order steroids without a prescription, and we’ll leave the site alone.

2. LegitScript has asserted that U.S. law should have precedence in determining the legality of a steroid pharmacy (at least when it comes to U.S.-based registrars). Does LegitScript feel that other countries should conform to the legal standards set forth by the United States with regard to steroid and prescription laws?

Our position is not that US law should have precedence above other countries’ laws in determining the legality of a steroid website. Rather, a website that ships prescription drugs from one country into another needs to comply with both countries’ laws. In other words, if a steroid website is shipping steroids to the US, those shipments must adhere to US law.

3. Some of the websites LegitScript submitted for termination do not appear to sell anabolic-androgenic steroids (AAS), but rather discuss the non-medical use of AAS, provide information generally, are affiliates of websites selling prescription drugs, or advocate their decriminalization or legalization (e.g., isteroids.com). Does LegitScript request termination of those websites?

No. We don’t have any problem with websites advocating a change in the law, or that are really doing nothing but providing information about anabolic steroids. However, that’s not what isteroids.com was (or, now that it’s re-registered elsewhere, is) doing. The website consistently displays an ad for, and link to, steroids-pharmacy.com, which provides anabolic steroids without requiring a prescription. The fact that the purchase is actually made from steroids-pharmacy.com, not isteroids.com, is irrelevant: iSteroids.com is functionally a storefront or entry point for steroids-pharmacy.com.

In the online prescription drug/steroids world, it’s a common scheme to set up a website that initially seems to be informational, but in some prominent way, obviously and overtly encourages its users to visit another site or sites for the illicit purchase of prescription drugs or steroids. In these cases, it’s not accurate to describe the website as simply informational. Rather, it’s an important part of the illicit network. Besides, each time that an Internet user on that informational page clicks through an advertisement to a steroids selling website, the informational page typically gets a fee or cut of the sale, and is directly or indirectly sharing in the drug proceeds.

4. Where can consumers access a revised list of “rogue” websites?

We actively maintain that list, but do not publish it. One reason is that we don’t want potential purchasers to use that list as a resource for finding sites where they can purchase drugs without a valid prescription. However, the “Is It Legit” box on our home page is a closed-universe search engine that lets users search for a website to see if it is approved or unapproved.

These days, the economy affects just about every aspect of our lives. The big decisions, like buying a new car or trying to get that small business loan, are being shelved while we wait for friendlier financial times. And increasingly, the smaller, everyday decisions are getting more scrutiny as our collective wallet tightens. One of these so-called small decisions? Filling prescriptions.

An article in today’s New York Times describes the situation in which many Americans now find themselves: “People are having to choose between gas, meals and medication,” said Dr. James King, the chairman of the American Academy of Family Physicians.

With the average number of prescriptions per person on the rise- jumping from 8.9 in 1997 to 12.6 in 2007- combined with climbing insurance co-pays, people are starting to pick and choose which prescriptions they fill in an effort to balance the household budget.

What does this have to do with the Internet pharmacy market?

Many rogue Internet pharmacies claim that their drugs are considerably cheaper than the ones you’d get at your local pharmacy. It’s an effective strategy. (Never mind the fact that these “drugs” might have been made in someone’s basement. And never mind, also, that legitimate generics are often much cheaper than the drugs pushed by these rogue sites.)

As American consumers look for creative ways to cut daily living expenses, the “Cheap meds!”, “85% discount!”, “Beat any price, guaranteed!” advertisements of the rogue Internet pharmacies may well gain appeal.

LegitScript’s take is that falling for these ads and purchasing prescription drugs from illicit sources sharply increases the risk of receiving counterfeit, expired or otherwise substandard medications. A recent study by the European Alliance for Access to Safe Medicines found that over 60% of drugs purchased in test-buys from Internet pharmacies were counterfeit or substandard. Interestingly, the study also found that to the untrained eye (read: average consumer), the drugs appeared legitimate.

The bottom line? The cost of such a risk far outweighs the benefit of a few (potentially imaginary) saved dollars.

Following on our recent blog about affiliate pharmacy networks, ZDNet had a blog from Ryan Naraine, Dancho Danchev & Adam O’Donnell about the structure of pharmaceutical affiliate networks.

One excerpt from the blog is revealing:

So once you’ve been approved as an affiliate and receive your unique tracking code, you’re free to choose the pharmaceutical products, pick up the creative and choose of the many templates for online pharmacy shops, then start driving traffic to them. (Emphasis added.) Some affiliate programs add value to the registration process by introducing ratio calculators in order to make it easier for new participants to calculate their earnings based on the selling price that they choose for the item.

The domain name registrant (the affiliate) is able to choose the pharmaceutical products sold on the website, is responsible for driving traffic to the website, and gets a cut of sales through the website. If the drugs are sold without a valid prescription or in violation of other laws, what sort of criminal liability does the registrant face? Law enforcement has traditionally targeted individuals higher up in the organization, not domain name registrants, unless he or she was also involved at the upper echelons of the criminal organization.

We think that affiliate registrants are about to face greater risk. Because the website registrant chooses the drugs sold on the website, and is responsible for the website’s search engine optimization and/or advertising, there’s an arguable case for criminal liability. After all, it’s indisputable that the affiliate network thrives, in part, because of the hordes of individual affiliates who boost search engine optimization, often anonymously.

With that, here’s a tidbit from LegitScript. In at least one state legislature (we’re not telling which one), legislation is going to be introduced early next year that will specifically hold the registrants of websites selling prescription drugs accountable. They’ll have to notify the Board of Pharmacy in their state if they are the registrant of any website offering prescription drugs. And the registration will have to be accurate, not anonymous.

A full solution? Of course not, especially with just one state. But this brings us back to the point we always raise about rogue Internet pharmacies and transparency: rogue pharmacy affiliate networks hate the sunlight. If this rule were enacted in all 50 states, it would be a good way to slow the proliferation of rogue affiliate websites.

Today, President Bush signed the Ryan Haight Online Consumer Protection Act.

LegitScript’s President co-authored an op-ed more than a year and a half ago calling for the Act to be passed. We’re glad to see it finally has become law. (But, as we’ve noted before, it only applies to domestic websites selling controlled substance prescription drugs, and therefore does not, in a practical sense, apply to the vast majority of Internet pharmacy websites.)

LegitScript will blog more about the new law over the next several days.

The Federal Trade Commission’s announcement today that they have frozen the assets and “shut down” the AffKing pharmaceutical spam network (also known as “Canadian Healthcare” or, in earlier iterations, “Target Pharmacy,” “Worldwide Wholesale Pharmacy,” “Direct Pharmacy,” and later “Canadian Drugstore”) highlights a small quandary for LegitScript: How do we treat Internet pharmacy affiliate networks?

AffKing, of course, may not be the best example for talking about affiliate networks. AffKing, believed to be sponsored by spam-sponsor SanCash, was doing a lot wrong (spam, drugs from India, no prescription required, “herbal products” actually contained active pharmaceutical ingredients…the list goes on). But the thousands of websites involved in the AffKing network got us thinking about Internet pharmacy networks generally.

On the one hand, affiliate networks aren’t inherently illegal or unethical. They are a way of expanding one’s Internet presence (or, as we call it at LegitScript, one’s “Internet Footprint”) and increasing the likelihood that you’ll get website visitors and thus customers.

The problem, as we see it, is that the main characteristic of nearly all Internet pharmacy affiliate networks is a lack of transparency. If the commodity were blue jeans, not knowing who you are buying from probably won’t affect your health. But it’s a different matter when it comes to prescription drugs: the vast majority of affiliate networks (and we include apparently US-based ones like RxPayouts, Secure Medical and Health Solutions Network) are, to differing extents, not transparent about who will write the prescription, which pharmacy will fill it, which network the website is affiliated with, where the drugs really come from, and who actually controls the website. And it leads to the natural question: If the website has nothing to hide, why not be completely transparent?

Take AccessRx.com, for example. The website is an affiliate of Secure Medical, which does not require a “valid prescription” (as LegitScript has defined that term) by dint of offering an “online consultation.” The online pharmacy says that it only uses US-based physicians and offers only FDA-approved drugs. Well, if that’s the case, why not just publish the name of the pharmacy and the doctors on the AccessRx.com website? It stands to reason that we should be able to know the name of the doctor and pharmacy that are going to write and dispense the prescriptions. So, we contacted AccessRx.com via live chat to ask about the doctor and pharmacy. “Jason” wouldn’t tell us in either case. For the doctor question, he gave us a number to call, but nobody picked up.

The answer, of course, is that AccessRx.com isn’t a pharmacy: it’s a website. But AccessRx and most other online pharmacy affiliate websites serve to cloud the identity of the pharmacy and the doctor until after you receive the drugs. Even then, for some affiliate networks based in the US, only the last name of the doctor is on the pill bottle. Who knows which state, if any, he or she is licensed in, or if the information is even accurate? (In most cases the affiliate website registrants probably couldn’t tell you which doctors or pharmacists are involved.)

LegitScript standards do not prohibit membership in an affiliate pharmacy network. However, we do insist on transparency. That’s a test that most Internet pharmacy affiliate network websites fail.

The family of Justin Pearson, who died from an overdose of drugs purchased from a rogue online pharmacy, and the Minnesota Pharmacists Association have launched a new website, AwareRx.org, to educate Internet users about the dangers of “rogue” Internet pharmacies.

We’re glad to see the website, and we take a moment to remember the tragedy behind it. His memorial website says that Justin Pearson was:

a vibrant young man with endless possibilities for a bright future. He was the kind of person who lit up a room just by entering it. He had many friends from all walks of life and he was the kind of friend who would not only give you the shirt off his back, but his shoes and socks as well. He became engaged in 2006 with plans to marry in 2007 and talked joyfully of having children.

Justin died Christmas Day, December 25, 2006. The main contributing factor was a “mixed drug overdose” of Vicodin and Xanax. Specifically:

A junk e-mail in the fall of 2004 advertising Vicodin without a prescription triggered Justin to investigate. Justin’s use of Vicodin expanded dramatically. At the height of his use, he took as many as 80 Vicodin within a 24-hour period, all purchased over the internet.

Justin’s death is still fairly recent. Our best wishes go out to his family, and we applaud them for having the courage to move forward with AwareRx.org as a way of helping others. We didn’t know Justin, but from what we’ve heard, he sounds like the kind of guy who would have been worth knowing.

There’s been a good amount of debate by respected bloggers (see, e.g., InternetDrugLaw and InternetPharmacyLaw) about what the Ryan Haight Online Pharmacy Consumer Act, now on the President’s desk for signing, really means. Specifically, if this bill requires a prior in-person examination in order for a controlled substance prescription to be lawful, does that mean that current law doesn’t actually require one? If so, how do we explain some of the convictions against controlled substance online pharmacy operators? And doesn’t the exclusion of non-controlled substances from the bill mean that a non-controlled substance can lawfully be prescribed following an online consultation without an in-person exam?

We think that these questions don’t get to the real reasons for the bill. (Obviously, the surface level reasons for the bill are to save lives and reduce addiction, but let’s dig deeper than that.) From the DOJ’s perspective, the overriding problem has been a bureaucratic one: a lack of desire by Assistant US Attorneys to accept and pursue these cases. That trickles down to DEA agents, who don’t want to spend months investigating an Internet pharmacy case that never gets filed.

This leads to the question: what are the two things that prosecutors want in order to file cases against rogue Internet pharmacies? This bill provides both: a case that is easier to win, and real time if the defendant is convicted. Let’s look at both factors.

First: much of the debate has correctly focused on the bill’s definition of “valid prescription,” the lack thereof in codified law, and how that relates to “online consultations.” Yet it’s arguable that existing law on this point isn’t so much unclear as it is convoluted. After all, good prosecutors can and do get convictions for “online consultation” controlled substance websites under current law. However, jury instructions, closing arguments, and the presentation of evidence can be a complicated nightmare. The bill doesn’t so much enact something new as much as it does codify what the DEA has argued, mostly successfully, is the right interpretation of existing law. As a result, the government’s prosecutions will simply be more straightforward.

Second: the increased penalties within the bill have largely been overlooked. They’re important. Why? Federal prosecutors usually don’t want to spend much time on a case that will only result in a few months prison. That’s one reason, in our view, that it’s fairly difficult to acquire Schedule II and III drugs via an online consultation these days, but Schedule IV drugs are comparatively more available that way. And there have been fewer prosecutions for Schedule IV schemes, with exceptions. The current penalties for Schedule III, IV and V drugs provide little prison time, at least compared to Schedule I and II offenses. By raising the possible penalties, the bill provides incentives to prosecutors who want to see real prison time available against the defendants they prosecute.

Those were the reasons for the bill, not a belief within the DEA that a prescription for a controlled substance based only on an online consultation was, in fact, a lawful act. Our prediction: if there’s an increase in the number of cases filed against online pharmacies selling controlled substances based only on an online consultation, it won’t be primarily because of the definition of “valid prescription.” Rather, it will be because the increased penalties for Schedule IV drugs (like Ambien, Xanax, Valium and Phentermine) make those cases more attractive to federal prosecutors, and thus, DEA agents will similarly be more willing to investigate those cases.