August 24, 2011: Google Forfeits $500 Million Generated by Online Ads and Prescription Drug Sales by Canadian Online Pharmacies
Food and Drug Administration
Office of Criminal Investigations
U.S. Department of Justice Press Release
For Immediate Release
August 24, 2011
United States Attorney
District of Rhode Island
Contact: Jim Martin
Internet search engine accepted advertisements from online Canadian pharmacies that targeted U.S. consumers and illegally imported controlled and non-controlled prescription drugs into the United States
PROVIDENCE, R.I. - Online search engine Google Inc. has agreed to forfeit $500 million for allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States, resulting in the unlawful importation of controlled and non-controlled prescription drugs into the U.S., announced Deputy Attorney General James M. Cole; Peter F. Neronha, United States Attorney for the District of Rhode Island; and Kathleen Martin-Weis, Acting Director of the U.S. Food and Drug Administration's Office of Criminal Investigations (FDA/OCI). The forfeiture, one of the largest ever in the United States, represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google's AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.
The shipment of prescription drugs from pharmacies outside the United States to customers in the U.S. typically violates the Federal Food, Drug and Cosmetic Act and in the case of controlled prescription drugs , the Controlled Substances Act. Google was aware as early as 2003, that generally, it was illegal for pharmacies to ship controlled and non-controlled prescription drugs into the United States from Canada.
The importation of prescription drugs to consumers in the United States is almost always unlawful because the FDA cannot ensure the safety and effectiveness of foreign prescription drugs that are not FDA-approved because the drugs may not meet FDA's labeling requirements; may not have been manufactured, stored, and distributed under proper conditions; and may not have been dispensed pursuant to a valid prescription. While Canada has its own regulatory rules for prescription drugs, Canadian pharmacies that ship prescription drugs to U.S. residents are not subject to Canadian regulatory authority, and many sell drugs obtained from countries other than Canada which lack adequate pharmacy regulations.
"The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers," said Deputy Attorney General James Cole. "This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history."
"This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google's knowledge and assistance, into the United States, directly to U.S. consumers," said Peter F. Neronha, United States Attorney for the District of Rhode Island. "It is about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching U.S. consumers, by compelling Google to change its behavior. It is about holding Google responsible for its conduct by imposing a $500 Million forfeiture, the kind of forfeiture that will not only get Google's attention, but the attention of all those who contribute to America's pill problem."
"Today's agreement demonstrates the commitment of the Food and Drug Administration to protect the US consumer and hold all contributing parties accountable for conduct that results in vast profits at the expense of the public health," said Kathleen Martin-Weis, Acting Director of FDA's Office of Criminal Investigations (OCI). "The result of this investigation has been a fundamental transformation of Internet pharmacy advertising practices, significantly limiting promotion to US consumers by rogue online pharmacies. This accomplishment could not have been possible without the resourceful commitment of the Rhode Island United States Attorney's Office, as well as the tireless efforts of our law enforcement partners detailed to the OCI Rhode Island Task Force."
An investigation by the United States Attorney's Office in Rhode Island and the FDA/OCI Rhode Island Task Force revealed that as early as 2003, Google was on notice that online Canadian pharmacies were advertising prescription drugs to Google users in the United States through Google's AdWords advertising program. Although Google took steps to block pharmacies in countries other than Canada from advertising in the U.S. through AdWords, they continued to allow Canadian pharmacy advertisers to target consumers in the United States. Google was aware that U.S. consumers were making online purchases of prescription drugs from these Canadian online pharmacies, and that many of the pharmacies distributed prescription drugs, including controlled prescription drugs, based on an online consultation rather than a valid prescription from a treating medical practitioner. Google was also on notice that many pharmacies accepting an online consultation rather than a prescription charged a premium for doing so because individuals seeking to obtain prescription drugs without a valid prescription were willing to pay higher prices for the drugs.
Further, from 2003 through 2009, Google provided customer support to some of these Canadian online pharmacy advertisers to assist them in placing and optimizing their AdWords advertisements, and in improving the effectiveness of their websites.
In 2009, after Google became aware of the investigation by the Rhode Island U.S. Attorney's Office and the FDA/OCI Rhode Island Task Force of its advertising practices in the online pharmacy area, and as a result of that investigation, Google took a number of steps to prevent the unlawful sale of prescription drugs by online pharmacies to U.S. consumers. Among other things, Google began requiring online pharmacy advertisers to be certified by the National Association of Boards of Pharmacy's Verified Internet Pharmacy Practices Sites program, which conducts site visits; has a stringent standard against the issuance of prescriptions based on online consultations; and, most significantly, does not certify Canadian online pharmacies. In addition, Google retained an independent company to enhance detection of pharmacy advertisers exploiting flaws in the Google's screening systems.
Under the terms of an Agreement signed by Google and the Government, Google acknowledges that it improperly assisted Canadian online pharmacy advertisers to run advertisements that targeted the United States through AdWords, and the Company accepts responsibility for this conduct. In addition to requiring Google to forfeit $500 million, the Agreement also sets forth a number of compliance and reporting measures which must be taken by Google in order to insure that the conduct described in the Agreement does not occur in the future.
The investigation of Google had its origins in a separate, multimillion dollar financial fraud investigation unrelated to Google, the main target of which fled to Mexico. While a fugitive, he began to advertise the unlawful sale of drugs through Google's AdWords program. After being apprehended in Mexico and returned to the United States by the United States Secret Service, he began cooperating with law enforcement and provided information about his use of the AdWords program. During the ensuing investigation of Google, the government established a number of undercover websites for the purpose of advertising the unlawful sale of controlled and non-controlled substances through Google's AdWords program.
The investigation was led by Assistant U.S. Attorneys Andrew J. Reich and Richard B. Myrus of the District of Rhode Island, and FDA/OCI Special Agent Jason Simonian. The FDA/OCI Rhode Island Task Force is comprised of law enforcement agents and officers from FDA/OCI; Internal Revenue Service - Criminal Investigations; ICE-Homeland Security Investigations; U.S. Postal Inspection Service; Rhode Island State Police; Rhode Island National Guard; Rhode Island Department of the Attorney General; East Providence Police; and North Providence Police. Corbin A. Weiss, Senior Counsel with the Criminal Division's Computer Crime & Intellectual Property Section, and Sarah Hawkins, FDA Senior Counsel, assisted the Rhode Island U.S. Attorney's Office in this matter.