Google fined $500m for online drug advertising

pharmafile | August 26, 2011 | News story | Medical Communications, Sales and Marketing Google Adwords, counterfeits, google 

Google has been fined $500 million by the US government for allowing pharmacies based in Canada to advertise unlicenced drugs to American patients.

The US Department of Justice, which led the investigation, said that while Canada has its own regulatory rules for prescription drugs, Canadian pharmacies that ship prescription drugs to US residents are not subject to Canadian regulatory authority.

This means that many sell drugs obtained from countries other than Canada that lack adequate pharmacy regulations, a practice that could be dangerous for US patients.

The $500 million figure represents the revenue received by the company as a result of Canadian pharmacies advertising through Google’s AdWords programme, plus gross revenue made by Canadian pharmacies from their sales to US consumers.

By forfeiting its revenue from the programme, Google will avoid criminal prosecution in the US for profiting from the adverts.

This is one of the largest forfeitures in US history, but forms just one part of a settlement between the company and the government.

In addition to requiring Google to give up its revenue from the programme, the agreement also sets forth a number of compliance and reporting measures that must be taken by Google in order to insure that the conduct described in the agreement does not occur in the future.

Google failed to take action 

The DoJ said Google was aware as early as 2003 that it was illegal for pharmacies to ship controlled and non-controlled prescription drugs into the US from Canada, but had failed to take adequate action.

In fact from 2003 through 2009, the DoJ said that Google provided customer support to some of these Canadian online pharmacy advertisers to assist them in placing and optimising their AdWords advertisements, and in improving the effectiveness of their websites.

In a statement Google said it should it not have allowed the adverts: “We banned the advertising of prescription drugs in the US by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we should not have allowed these ads on Google in the first place,” the company said.

US Attorney Neronha said the fine was “about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching US consumers, by compelling Google to change its behaviour.

“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,” she added.

Acting Director Martin-Weis of the FDA’s office of criminal investigations, who was involved in securing the fine, said: “[This] agreement demonstrates the commitment of the FDA 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.

“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.” 

Ben Adams

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