In what is proving to be the makings of an interesting court case, FedEx finds itself the focal point of an US Justice Department probe. Privacy of consumers, the US healthcare system and the role of e-commerce and the responsibility of the small parcel provider seems to be among the questions that will be determined in this case.
According to published articles, the first indictment in the case was filed in July charging FedEx with conspiracy to distribute controlled substances, conspiracy to distribute misbranded drugs, distribution of controlled substances and misbranding drugs. FedEx pleaded not guilty last month.
If FedEx is found guilty, the US attorney’s office says it faces a potential maximum fine of twice the revenues it made on the business, or about $1.6bn.
In addition, last week, the US Justice Department filed additional charges against FedEx accusing it of conspiracy to launder money. According to a Wall Street Journal article, the latest charges allege that FedEx knew payments from certain pharmacies resulted from invalid prescriptions. It also alleges the company collected payments on some of the prescriptions to return to the issuer.
As the Wall Street Journal correctly points out, the case is a key test for how much legal responsibility delivery companies bear for the contents of the packages they deliver.
“Illegal activity by online pharmacies that results in prescription-drug abuse and deaths is a problem that needs to be solved,” Patrick Fitzgerald, Senior Vice President of integrated marketing and communications said. “We stand ready to help deliver the solution by working with law enforcement, but the responsibility to monitor, regulate or police the activities of doctors and pharmacists lie with licensing, regulatory and law enforcement authorities, not shipping companies.”
Fitzgerald also noted, “Settlement is not an option because we haven’t done anything wrong. The privacy of our customers is core to our business. To somehow suggest we have potential criminal responsibility for the contents of the packages we pick up and deliver every day would fundamentally change our business.”
UPS was also targeted by the US Justice Department but in March of this year, opted to pay $40m and establish a compliance programme which would ensure pharmacies will not be able to use its services to illegally distribute drugs.
This case will indeed be watched by many – express small parcel providers, the healthcare industry and more. One thing that cannot be denied is the growth of online pharmacies is on the rise. Much like any other commodity, the convenience and privacy of purchasing medicines online is the primary reason for this growth. Also, more insurance companies are encouraging home delivery for long term medications.
Finally, a disturbing statistic was cited in a Bloomberg article recently – Only 3% of more than 10,000 online pharmacies reviewed by the National Association of Boards of Pharmacy comply with US pharmacy laws and practice standards. Also, more than 36m US consumers have bought medication online without a valid prescription, according to the National Association of Chain Drug Stores.
While FedEx’s guilt or innocence will be determined in a court of law a review of online pharmacies is definitely needed as consumers turn more and more to such e-commerce solutions.