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Check Out the Shenanigans Behind Google's $500M Pharmacy Settlement

Google's impending $500 million settlement with the Department of Justice over dubious advertising for foreign online pharmacies came after the search giant hired a Bush Administration operative who leveraged his experience in the Office of National Drug Control Policy into a private business advising internet service providers on how to deal with companies that sell drugs online.

Critics of John Horton and his relationship with Google (GOOG) have argued that the crackdown on foreign web pharmacies, and in particular legitimate Canadian pharmacies, drives up the price of drugs in the U.S. Horton, a former deputy director of the ONDCP under President George W. Bush, and the founder of LegitScript, re-upped his contract with Google in February. Horton started LegitScript the same month he left his job at the ONDCP, according to his LinkedIn profile. LegitScript's job with Google is to ensure that only approved U.S. pharmacies and -- if Google's former policy still holds -- certain approved Canadian pharmacies are allowed to advertise on Google:

Google's Internet pharmacy policies for Google Product Search require that any Internet pharmacy or prescription drug advertiser targeting the US must be accredited by the National Association of Boards of Pharmacy (NABP) as part of the NABP's Verified Internet Pharmacy Practice Sites (VIPPS) program, the Vet-VIPPS program (for animal pharmacy websites) or as part of the NABP's eAdvertiser program.
Before Horton (pictured) got that contract, the job of assisting Google in its decisions on which online pharmacies are legit and which are fakes, rogues or other foreign ne'er-do-wells, used to be performed by PharmacyChecker.com. PharmacyChecker's policy was that virtually all Canadian pharmacies operating lawfully in that country should be approved to sell drugs to Americans with prescriptions. The Canadians, after all, are about as strict about drug dispensation as we are.

Horton, however, snatched that job away from PharmacyChecker following the passage of President Barack Obama's healthcare reform act. In an historic compromise with Big Pharma, the act expanded access to medicine for many Americans but in return the government agreed to prevent Americans from importing drugs from abroad, where pills are sold more cheaply. Now, PharmacyChecker says, Canadian pharmacies cannot sell drugs to U.S. patients.

A war behind the scenes
In September 2010, PharmacyChecker called for an investigation of Horton and whether he had misused his office at the ONDCP to set himself up in business when Bush's term ended:

Mr. Horton appears to have misused and abused his government position for private gain by starting, while in office, an online pharmacy verification service, LegitScript.com, and given unfair market advantage to his business. More importantly, his actions appear to have violated the will of Congress, misled the Committee on Oversight and Government Reform, and instigated and/or encouraged government actions by ONDCP and other government agencies adverse to the interests of Americans, specifically hindering access by Americans to safe and affordable medication.
At a White House meeting in fall 2010, ISPs came away with the impression that the FDA may get an expanded role in policing online pharmacies. LegitScript was awarded an FDA internet monitoring contract at about that time.

In April, PharmacyChecker urged Americans to stop the White House from blocking access to low-cost medicines from foreign pharmacies.

Horton claims PharmacyChecker's allegations are false and misleading, and that before it lost its Google contract "PharmacyChecker had approved Internet pharmacies that were selling prescription drugs without a prescription. Some of these were the subject of counterfeit drug warnings in the U.S. or Canada." (PharmacyChecker disputes that.)

Horton appears to have won the war. With Google signed off at the DOJ, LegitScript's policies for judging online pharmacies are, effectively, the law of the land.

Doubtless few will sympathize with transsexuals who now cannot get cheap hormones from Vanuatu-based operations like Inhousepharmacy.com. But that's not the point. Drugs are expensive. Nearly 50 million Americans do not have health coverage. Those who buy their prescriptions online in order to fulfill their medical needs at bargain prices will now likely find life just a little bit harder.

Neither LegitScript nor PharmacyChecker responded immediately to a request for comment. When reached for comment, both companies pointed to articles they had published criticizing each other's conduct, which are incorporated above.
Related:

Image by Flickr users swanksalot and mykl roventine, CC.
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