Online rogue pharmacies have large reach but small sales

If the amount of e-mail solicitation that can crowd in-boxes actually reflected the percentage of consumers’ prescription dollars that was spent at overseas pharmacies that pop up on the Internet, one might conclude they’ve grabbed the lion’s share of the lifestyle and self-pay prescription drug market. But in fact, it’s a minuscule amount, according to Forrester Research analyst Liz Boehm.

According to Boehm, in 2003, of the 12% of U.S. consumers surveyed who had purchased drugs online, only 9% said they’d purchased from an overseas pharmacy, and only 6% said they’d purchased a drug without a prescription. “The numbers were tiny,” she says.

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The Internet-accessible overseas pharmacies, sometimes called rogue pharmacies in the industry, came to attention a few years ago, prior to the recent Medicare Modernization Act which has expanded access to drug benefits under Medicare. Before the Act, pop-up Internet pharmacies from outside the U.S. offered the promise, at least, of pricey prescription drugs at less cost for those who were paying out of pocket. “People were re-importing these medications on web sites from who knows where. It wasn’t safe, so part of the solution was that we needed an affordable drug benefit for individuals who didn’t have drug coverage, and most of them were on Medicare,” Boehm says. The overseas pharmacies have expanded their offering to include so-called lifestyle drugs not necessarily covered by health insurance.

Boehm says re-importation still goes on, and while technically the legality of the practice is questionable, some of the pharmacies in this group may operate as legitimate pharmacies outside the U.S. “The challenge is that it’s tough to differentiate a legitimate pharmacy from someone selling sugar pills and calling it Propecia,” she says.

Boehm adds that the new Medicare drug benefit isn’t going to make overseas pharmacies and outright rogue pharmacies disappear from the Internet, particularly since the benefits as outlined in the act are proving extremely difficult for consumers to understand. Nevertheless—spam notwithstanding—these represent a very small percentage of the prescription drug market, she says.