Google agrees to pay $500 mn in drug-advertising settlement

Google Inc agreed to pay $500 million to settle US allegations that advertising for online Canadian pharmacies on its website allowed illegal imports of prescription drugs.

Google, based in Mountain View, California, was aware as early as 2003 that the shipment of prescription medicines to the US from outside the country is illegal, the Department of Justice said in a statement on Wednesday.

“We banned the advertising of prescription drugs in the US by Canadian pharmacies some time ago,” Google said in an e-mailed statement. “However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.”

Google announced in February 2010 that it would only accept US and Canadian ads from pharmacies certified by the National Association of Boards of Pharmacy’s Verified Internet Pharmacy Practice Sites program, known as VIPPS, and the Canadian International Pharmacy Association.

In December 2010, Google joined Microsoft Corp, Yahoo! Inc and other companies in helping establish a non-profit organisation to fight illegal Internet pharmacies. Counterfeit drug sales account for about $75 billion in global sales, the National Association of Boards of Pharmacy said at the time. About 1 per cent to 2 per cent of drugs in North America are counterfeit, according to the pharmacy group.

“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,” said Kathleen Martin-Weis, acting director of the Food and Drug Administration’s Office of Criminal Investigations, in the statement.

Google said in May that it had set aside $500 million for the resolution of an investigation of its ad business.