Google Agrees to Pay U.S. $500 Million in Drug-Advertising Settlement

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

Google was aware as early as 2003 that the shipment of prescription medicines to the U.S. from outside the country is illegal, the Department of Justice said in a statement today.

"We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago," Google said in an emailed 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 U.S. 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, Yahoo and other companies in helping establish a nonprofit to fight illegal internet pharmacies. Counterfeit drug sales account for about $75 billion in global sales, the National Association of Boards of Pharmacies said at the time. An estimated 1% to 2% of drugs in North America are counterfeit, according to the nonprofit organization.

"The result of this investigation has been a fundamental transformation of internet pharmacy advertising practices, significantly limiting promotion to U.S. consumers by rogue online pharmacies," Kathleen Martin-Weis, acting director of the Food and Drug Administration's Office of Criminal investigations, said in the statement. Google said in May that it had set aside $500 million for the resolution of an investigation of its ad business.

-- Bloomberg News --

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