Clinton Online Drug Regulation Blasted by Key Congressman

In a letter that is bound to strain bipartisan cooperation on e-commerce issues, U.S. House Commerce Committee Chairman Tom Bliley (R-Virginia) has taken President Clinton to task for his decision to ask for increased oversight of online drug vendors.

The letter upbraids Clinton for unilaterally making the proposal without waiting for the results of a joint effort between the White House and the Commerce Committee.

Bliley, who has been an eagle-eyed observer of e-commerce during his tenure on the Commerce Committee, asked Clinton to justify his plan to give the Food and Drug Administration (FDA) more authority to clamp down on illegal Internet sales of prescription drugs before completing a thorough inquiry into the situation.

If approved by Congress, the president’s plan would give the FDA new power to review and certify hundreds of prescription-filling Web sites. Those that continue to violate the new regulations would risk incurring $500,000 (US$) fines for each infraction.

As of mid-day Thursday, the White House had not responded to Bliley’s letter.

Politics and Procedure

Bliley also claims that Clinton’s move tramples states’ rights to enforce prescription drug laws. Noting that the actions of illegitimate online pharmacies are already illegal under current law, Bliley questioned the need to increase federal oversight of the problem, which he argues essentially sets a precedent for further federal regulation of electronic commerce.

At a time when many e-commerce merchants are still counting their record receipts from the 1999 holiday sales season, Bliley’s criticisms could strike a chord with voters, who are becoming increasingly aware of Internet and e-commerce policy during this presidential election year. As a Republican looking to help his party retake control of the White House, Bliley may be playing politics as much as trying to influence policy.

In a statement issued the day the letter was sent, Bliley suggested that Clinton’s FDA plan may “foreshadow policies where activities occurring on the Internet will be governed by new federal law and regulations while similar activity in the material world is governed by state law.”

Did Clinton Jump the Gun?

The Commerce Committee’s Subcommittee on Oversight and Investigations held a hearing on online drug sales last July, at which time Bliley called on Clinton to establish a joint federal-state task force to coordinate current law enforcement efforts and to assess whether they are adequate to protect consumers.

In response, Clinton established a “Federal Working Group” to report on illegal prescription drug sales on the Internet and make recommendations by December 5th. That report was subsequently pushed back to the end of this month.

Noting that he initially supported the President’s plan to commission the Working Group, Bliley said he continued to press for state regulatory and enforcement agencies to be included in the study, but was rebuffed.

“Recent enforcement actions against online pharmacies in several states — including Kansas, Washington, California, Ohio, Maryland, Illinois, Nevada, Colorado, Missouri, Wyoming and Arizona — are indicative of increased scrutiny at the state level. Unfortunately, the Working Group was never expanded to include these key state enforcement and regulatory agencies,” Bliley wrote in his letter.

Led By the Masses?

The President’s decision to issue the FDA oversight plan in December, a month before that report was scheduled to come out and while Congress was out of Washington, demonstrates his “habit of governing by public opinion poll,” Bliley said, calling such a tactic “alarming.”

“This proposal for regulation is vague and gives no weight to unintended consequences,” Bliley said. “And even more disturbing, it appears that the President developed and unveiled this plan without any guidance from his hand-picked group of experts on the issue.”

“When it comes to the Internet, policy by poll is truly dangerous,” Bliley added. “The future of the Internet economy and the tremendous benefit it can bring to millions of Americans is too important to be decided by political calculation and public opinion polls.”

In his letter, Bliley asked the President to explain what analysis of the online drug sales situation he consulted to develop “such a sweeping reform without awaiting or relying upon the work product of its own, self-appointed task force.”

He also called upon Clinton to release to the Commerce Committee — and to the public — all draft reports or recommendations that the Working Group has made, as well as the final report when it is submitted.