Print 12 comment(s) - last by Tony Swash.. on Aug 28 at 5:48 AM

The Department of Justice stated that Google was aware that these ads were illegal since as early as 2003

The U.S. Food and Drug Administration (FDA) launched an investigation against Google in 2009 regarding whether the search leader knowingly accepted pharmacy ads online that were illegal. But Google is now paying a hefty sum in order to settle these allegations.

According to the Department of Justice (DOJ), shipping prescriptions to the United States from outside of the country is "generally illegal" because they are not FDA-approved for safety. The DOJ stated that Google was aware of this since as early as 2003, concluding that it knowingly accepted these pharmacy ads.

Only when the FDA investigation began in 2009 did Google make an effort to put a stop to the unlawful drug sales, said the DOJ. Google began accepting U.S. Canadian ads from certified pharmacies only at that point, and in 2010, it joined Microsoft and Yahoo as well as others in developing a nonprofit organization for the fight against illegal Internet pharmacies.

In May 2011, Google said it was setting aside $500 million USD for antitrust settlements, and now, that's exactly the amount it is paying to settle these FDA-related allegations.

"We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago," said Google in a statement. "However, it's obvious with hindsight that we shouldn't have allowed these ads on Google in the first place."

The DOJ said that along with the $500 million payment would be "a number of compliance and reporting measures" as well.

"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," said Deputy Attorney General James Cole.

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RE: right
By quiksilvr on 8/25/2011 11:11:17 AM , Rating: 2
You don't understand at all. We can't possibly trust international drugs without it being FDA approved, because the United States is ranked 37th according to the World Health Organization and can't take drugs from countries with paltry ratings like Canada's:


RE: right
By kattanna on 8/25/2011 11:15:52 AM , Rating: 2
and the "kicker" of it all.. is that a lot of those drugs made in canada are made under license from US drug companies.

so they are literally the EXACT same drug, just a different plant in which they are made.

RE: right
By Solandri on 8/25/2011 3:54:01 PM , Rating: 2
This is exactly what's going on. It's essentially region-encoding for prescription drugs. If there were one universal price for a drug, it would be either ridiculously cheap in the U.S., or ridiculously expensive in developing countries.

So the pharmaceutical companies have essentially managed to piece together laws giving them region-encoding powers for drug pricing. They can price the drug high in the U.S. to make lots of profit, price it low in developing countries so they can still make sales and some profit, and not worry about people buying the drug in the developing countries carrying it back to the U.S. for resale.

Canada's price just happens to be significantly lower than the U.S. because they don't participate in the region-encoding to as great an extent. As others have posted, you can get prescription drugs in Canada which are manufactured in developing countries. Shipping drugs from developing countries -> Canada -> U.S. bypasses the region encoding, which is why the pharmaceutical companies are so intent on squashing that trade.

Unlike region-encoding for DVDs (which should be illegal), I'm uncertain how justifiable this is. I haven't seen the financial figures for R&D costs and pricing necessary to recoup those costs. The pharma companies claim they are actually selling the drugs in developing countries at below their cost (if you include R&D), because it would be unethical to deny those people lifesaving medicines simply because while they can afford the manufacturing costs, they cannot afford the R&D costs. So prices in the U.S. and other first world nations are higher because that's where they're recouping their R&D. So they claim.

RE: right
By quiksilvr on 8/25/2011 11:18:27 AM , Rating: 2
And for those that wish for a more reliable source, please refer to page 18 of the World Health Organization's official ranking document, which discusses in great detail the statistical analysis behind the ranks and the ranking table itself:

(Ranks start on Page 18)

RE: right
By Solandri on 8/25/2011 4:37:26 PM , Rating: 2
I've critiqued that report before. The biggest problem with it is that it includes a weighted factor for "fairness" - how equally available health care is to the population. The more equitable the availability of health care, the higher the rank in that factor. And that factor was used to partly determine the overall ranking of each country.

The problem is, inequality in availability of health care is already factored into the data. If a quarter of your population is denied adequate health care, their poor health will drag down all your national health statistics. If you then add a second factor measuring equality of availability, you've double-counted it. Either you can't add it as a second factor, or you can add it but must eliminate it from the general data set by excluding the quarter of the population without adequate health care from the national health statistics.

To draw a simplified analogy, say you have two classrooms with 20 students each. In class A, each student receives 1 cookie (20 overall). In class B, only 3/4 the class receives a cookie (15 overall). The average for class A is 1 cookie per student. The average for class B is 0.75 cookies per student.

It makes no sense to then add another factor for the unequal distribution of cookies in class B. The unequal distribution already shows up in the lower average. Adding another factor for it is like saying only 3/4 the students in class B got cookies, so we need to ding class B's average by 0.75. Class B's average was 0.75 cookies per student, ding it by 0.75, so class B should get a ranking of 0.56 cookies per student.

If you do want to add a factor for unequal distribution, you have to look at only the portion of students who actually got cookies. 15 students got 15 cookies for an average of 1 cookie per student, ding it by 0.75, to get an overall ranking of 0.75 cookies per student in class B.

I'm not saying it's wrong to have equality as a factor. It can be useful for distinguishing between, say, class C which has 20 students but only 1 student got all 20 cookies, which yields 1 cookie per student which is the same average as class A.

But that factor has to be carefully weighted. Otherwise you can get a situation like class D, where 15 students got 1.25 cookies and 5 got 1 cookie. That's 23.75 cookies overall, or 1.19 per student. Considerably better than class A, and even the students who got the fewest cookies got as many as the students in class A (1 each). But the equality of distribution is such that only 3/4 of the students got the most cookies. So if you ding 1.19 by 0.75, you get an overall ranking of 0.89, which is lower than class A's 1.00. It's really easy to screw things up like this if you add equality as a separate factor and don't control for it in your original data set.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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