November 18, 2003 3:04 PM PST
Overture cleans up its drug ad policy
Overture, the commercial search subsidiary of Yahoo, said Tuesday that it filtered the last of its advertisements related to online pharmacies or pharmaceutical drug sales on Monday, and it notified advertisers over the weekend that it would cease selling the ads.
The move comes in response to lobbying from U.S. pharmacy trade group the National Association of Boards of Pharmacy (NABP) and Drugstore.com, a major Overture advertiser and one of the Net's biggest online pharmacies. For the last nine months, NABP and Drugstore.com have been trying to wipe out ads for prescription drugs, such as painkillers Vicodin and OxyContin, that can be ordered freely by mail from some Web sites without a doctor's consent. NABP held a meeting with Yahoo last Wednesday about removing the ads.
Overture lets advertisers bid for placement in Web search results related to keywords, ranging from "Vicadin" to "digital cameras." The ads appear under the heading "sponsored listings" when surfers type in related terms. Overture partner sites, including Microsoft's MSN Web portal and Yahoo, have displayed the ads.
Overture said it will ban the sale of drug-related keywords to licensed and non-licensed pharmacies until it has employed a third party to verify the legitimacy of drug-related advertisers, which it expects to do in the first quarter of 2004. The company still allows ads related to addiction recovery keyed to drug terms.
"We think legitimate online pharmacies serve an important need by giving consumers access to drugs cost-effectively," Overture spokeswoman Jennifer Stephens said. "However, the online environment has become increasingly complex in this area. We thought it was best to take the listings down until we can impose guidelines that will help identify legitimate online pharmacies."
Stephens said that MSN, one of Overture's biggest partners, also wanted the ads removed from its site. MSN licenses commercial search results from Overture.
Overture's new policy is a win for NABP and Drugstore.com in their campaign to rid search engines of ads from rogue pharmacies.
The two entities have contacted several sites, including search engine provider Google, MSN and America Online, saying that they have run ads from illegal distributors. NABP and Drugstore.com have wanted the sites to agree not to run ads from distributors unless they are certified by the industry. The association lists 14 certified pharmacies on its verified Internet pharmacy practices site (VIPPS), including Drugstore.com and Walgreen's online arm, Walgreens.com.
AOL, Yahoo and MSN, through its partnership with Overture, will now be in accordance with their wishes.
Google spokesman David Krane said that the company is evaluating its pharmacy-related advertising, but it has not yet decided to make any changes. Google's policy is to accept ads only from pharmacies that require customers to provide appropriate evidence of authorization, such as a doctor's prescription or consultation, before fulfilling orders. But the company has allowed advertisements for unlicensed pharmacies.
Krane has said in the past that Google is exploring the adoption of more stringent measures, including limiting sales of pharmaceutical ads to VIPPs-certified companies.
The war on drugs
NABP's efforts to restrict online pharmacy ads come as concerns mount over illegal prescription drug imports from Canadian and overseas Web sites. Sites that sell low-cost medications with or without a prescription have proliferated online, littering Web search results pages and e-mail in-boxes with pitches for a range of restricted drugs, including the male sexual aid Viagra, the antidepressant Xanax and the sleeping pill Ambien.
Pharmaceuticals sellers served some 2 billion advertising impressions in October, making them the second-largest group of advertisers within the health industry on the Net, behind weight-loss marketers, according to researcher Nielsen/NetRatings. The health market made up about 5 percent of the total online ad sales in October, Nielsen reported.
Demand is there, too. As drug prices rise, many people are turning to Internet stores to buy less-expensive alternatives from abroad. Analysts say that the trade of unlicensed prescription drug sales online will be worth between $800 million and $1 billion this year.
Regulators are beginning to crack down. Following a complaint from the Food and Drug Administration, a federal judge in Tulsa, Okla., shuttered Rx Depot, a Web site that sold low-cost prescription drugs from Canada.
Overture's Stephens said that the monetary loss from removing the drug-related listings would be insignificant, but the company is eager to put a new third-party system in place.