LAS VEGAS -- In July 2001, regulators at the Nevada State Board of
Pharmacy noticed something unusual among the reams of data that flow
into the busy agency each day. Buried along with the other numbers was a
report from a small Internet pharmacy that had filled 1,105
prescriptions for painkillers and other dangerous drugs that month.
The same tiny pharmacy had dispensed just 17 prescriptions in the
prior six months.
Virtually overnight, prescriptiononline.com had become one of the
largest distributors of controlled substances in Nevada. Over the next
year, the online pharmacy shipped nearly 5 million doses of highly
addictive drugs to customers scattered across the country. By the time
regulators shut the Las Vegas firm in January, prescriptiononline.com
accounted for 10 percent of all hydrocodone sold in Nevada, regulators
It turned out that the booming business was owned by a 23-year-old
former restaurant hostess. But it was run by her father, who had been
convicted of a felony in 1992.
"For any single pharmacy to account for 10 percent of any drug is
incredible," said Louis Ling, general counsel to the Nevada pharmacy
board. "The fact that it was a highly addictive painkiller and an
Internet site run by a convicted felon was even more troubling. This was
unlike anything we had ever seen."
With little notice or meaningful oversight, the Internet has become a
pipeline for narcotics and other deadly drugs. Customers can pick from a
vast array of painkillers, antidepressants, stimulants and steroids with
few controls and virtually no medical monitoring.
There are dozens of legitimate online drugstores and mail-order
pharmacies. Unlike rogue sites, they require customers to mail in
prescriptions from their doctors. Typically, the legitimate sites offer
a full range of medications, with painkillers accounting for less than
20 percent of their business.
In contrast, a majority of the rogue sites' sales are for hydrocodone,
Xanax, Valium and a few other addictive drugs. Many work with middlemen
who set up the sites' customers with doctors who are veritable
script-writing machines. Some of those doctors have financial problems
and histories of substance abuse or medical incompetence, records show.
The online merchants now feed a sprawling shadow market for
prescription drugs, frustrating medical leaders alarmed by the threat to
public health and investigators hard-pressed to keep up with nimble Web
sites that can open and close at a moment's notice.
"It's like rabbits," said Wayne A. Michaels, a senior investigator
for the Drug Enforcement Administration. "Every day, there are more of
them. They're up, they're down, they're foreign, they're domestic."
The agency recently created a six-person task force solely to track
the online trade in narcotics. But officials acknowledged the effort is
a form of "triage" amid an escalating crisis. "We're afraid it's going
to overwhelm us, once we've identified all these sites," said Elizabeth
A. Willis, chief of the DEA's drug operations section.
The multimillion-dollar industry has appeared overnight, pumping
millions of pills into some of America's smallest and most economically
The Washington Post obtained and analyzed a Nevada pharmacy board
database of 30,000 orders filled by prescriptiononline.com. The analysis
found that four of every 10 pills poured into four southern states with
widely documented prescription-abuse problems. A disproportionate share
of those drugs went to customers in small towns.
Some small Tennessee towns received 50 times more painkillers per
capita than large cities, the analysis found. For example, Church Hill
got 1,013 pills for every 1,000 residents; Nashville, just 26. Bristol
got 1,584; Memphis, 14.
"It's a no-brainer why you see high volumes in these little places,"
said Tammy Meade, a narcotics prosecutor in Nashville. "Users and people
who want to get their hands on enough to distribute can't doctor shop in
places like that. And if they use the Internet, someone like me . . . is
going to have a tougher time finding out."
Stretching from Florida to California, the Internet pipeline has left
a trail of deaths, overdoses, addictions and emotionally devastated
"It absolutely blew my mind that you could get these drugs online,"
said Sue R. Townsend, the coroner in Aiken County, S.C. Her son Douglas,
30, died after driving his car into a fence in September 2001. His
family said he had taken a generic form of the tranquilizer Xanax, which
they said he had purchased from myprivatedoc.com, a now-defunct Web site
in Mesa, Ariz. Townsend's family sued the Web site, the pharmacy and the
Arizona doctor who wrote the prescription, accusing them of selling the
drug without a proper medical consultation. The case was recently
settled with no admission of liability.
"Losing Doug has broken our hearts," Sue Townsend said, fighting back
tears. "He had a young wife and a baby boy who will never know his
daddy. Somehow we have to tell how dangerous this is, because it's
happening all over."
In a typical purchase from a rogue site, a customer logs on and
orders hydrocodone (generic Vicodin and Lortab). The Web site steers him
to a middleman, often another Web site, which arranges a telephone
consultation with a doctor. The customer and the doctor talk briefly,
after which the doctor writes the prescription and sends it
electronically to the Internet pharmacy. The pharmacy ships 60 pills to
the customer by overnight mail. Total cost: $290. The pharmacy pockets
$190 for the hydrocodone and the doctor and the middleman split the
remaining $100 as a consultation fee. There are no face-to-face
meetings, lab tests, X-rays or follow-ups.
There are dozens of Web sites selling narcotics in the United States,
with scores more operating offshore. Federal prosecutors have shut Web
sites, filed indictments and won guilty pleas from several owners. But
it often takes years to prove a case. In the meantime, the pills move.
For each site closed, "two or three more open," said Jennifer Bolen,
a former federal prosecutor in Knoxville, Tenn. "It is so easy for them
to close down a site one day and open a new one the next."
For the DEA, an agency already responsible for everything from drug
cartels to street drugs, trying to police the growing number of online
pharmacies "is like trying to work every corner drug dealer," said Laura
M. Nagel, the agency's deputy assistant administrator. "We can't do it
When prosecutors shut the Internet pharmacy operations at
thepillbox.com in San Antonio, much of the business shifted to
prescriptiononline.com in Las Vegas, records show. When that site was
closed two years later, Nevada regulators suspect the business shifted
yet again -- this time to Florida.
Some Web sites have dozens or even hundreds of affiliate sites.
Others are designed to appear as though they are headquartered in the
United States when they are really offshore, in such places as Namibia,
Thailand and Sri Lanka. The growing numbers of foreign online pharmacies
operate with near impunity. The Food and Drug Administration (news
web sites)'s strongest recourse is to send a warning letter, which
usually is ignored.
"As an investigator, it's incredibly frustrating," said Robert J.
West, a special agent with the FDA's Office of Criminal Investigations.
"All we can do is bang away and try to draw attention to what these guys
are doing. Right now, I don't think people have any idea how widespread
or dangerous this is."
States regulate pharmacies, creating widely different rules governing
Internet sites. Under-staffed pharmacy boards barely have time to
inspect brick-and-mortar pharmacies, let alone virtual ones. Many online
pharmacies have ignored state efforts to register them. Only one state
-- California -- has a full-time agent investigating doctors writing
prescriptions for Internet pharmacies.
The lax oversight comes amid Congress's inability to pass legislation
requiring even minimal disclosure by Internet pharmacies.
In 1999, then-Rep. Ron Klink (D-Pa.) issued a warning at a committee
hearing: "I am concerned a 'Wild West' world is unfolding before us,
where many consumers are accessing potentially dangerous drugs with
little or no practical guidance. Yet because it is e-commerce, there is
a mentality: It must be progress."
In 2000, the FDA, the General Accounting Office (news
web sites) and several House members urged that online pharmacies be
required to disclose their owners, locations, doctors, affiliated
pharmacies and telephone numbers. But Congress never followed through.
Nearly four years later, there is still no disclosure requirement.
"Getting a bill regulating the Internet is about as hard as it gets,"
said William K. Hubbard, the FDA's senior associate commissioner. "You
have all of these people worrying about stifling this wonderful thing .
. . and they don't want the bad Feds in there."
A Post reporter sent e-mail asking for identifying information to 15
online pharmacies specializing in painkillers. Only one responded. It
declined to say who owns the site or where it is located. One online
pharmacy included a telephone number for customer service that linked to
a freight forwarding company in Miami. When a reporter called, a
secretary said that it moved shipments for a customer in Costa Rica.
In late 1999, the National Association of Boards of Pharmacy
instituted a voluntary system for certifying online pharmacies,
including inspections and disclosure. But of the hundreds of Internet
pharmacies now operating, only a "dozen or so" signed up, said Carmen
Catizone, the board's executive director. Most of those are large,
legitimate sites, such as drugstore.com.
One pharmacy that received certification was prescriptiononline.com.
"I can't explain what happened there," Catizone said. "I know we
certified it originally, and then later on we got some complaints, and
we suspended their certification. Obviously, if we knew then what we do
now, we never would have certified them."
Regulators in Nevada faced a similar situation in April 1999 when
Terri Suarez applied for a license to operate an online pharmacy called
No one at the Nevada State Board of Pharmacy had ever heard of
Suarez. She was not a pharmacist. She was not even from Nevada. She was
based in Louisiana. But all Suarez had to do to get a license was show
that she had a corporation.
"At that time, our whole application was essentially a page and a
half," said Ling, the board's counsel. "It was essentially nothing. I
don't even think she had to prove she had a business license."
Her application was approved.
Nevada regulators did not know that Suarez operated a closed-door
pharmacy in Jefferson, La., called Pharmaceuticals Southwest Inc. On
paper, the tiny company was set up to sell discounted drugs to nursing
homes. But when an inspector showed up in November 1999, there were no
drugs to be found.
"It was definitely a front," Carlos M. Finalet III of the Louisiana
Board of Pharmacy said later. "It had no stock. The pharmacist sat there
reading a book."
Suarez denied buying any drugs, even when she was confronted with
invoices bearing her signature, according to a complaint that the
Louisiana board filed against Suarez's company. The board determined
that Suarez had indeed purchased drugs -- $1.2 million worth in two
months from Bindley Western Industries Inc. But inspectors could not
Based on Suarez's "complete disregard for pharmacy laws," the board
revoked the company's license and fined it $100,000. But the board has
been unable to collect, and Finalet said Suarez's whereabouts are
Nevada regulators did not know about Suarez's troubles when her name
resurfaced in March 2001. That month, they received notice that she had
sold her interest in prescriptiononline.com to Melissa Cosenza, 23.
The regulators blanched. Cosenza's father is Michael R. Cosenza, who
has a long history of working at the margins of drug distribution in
Nevada and elsewhere.
"We knew immediately that he was using her as a front," Ling said.
"What we didn't know was what he was up to."
At a hearing, Melissa Cosenza confirmed that her father was going to
be a consultant to prescriptiononline.com. "She had supposedly bought
the company for $50,000, payable at $5,000 a year," Ling recalled. "Who
buys a pharmacy for $50,000? It sounded as hokey as could be. We started
asking her questions. It was pretty obvious she didn't know anything
about the business."
In April 2001, Melissa Cosenza submitted an application for a
license, stating that she owned all of the company's stock. She gave a
home address near San Diego. Under work history, she listed jobs as a
restaurant hostess and salon receptionist.
Nevertheless, she qualified for a license. "I suppose it looks pretty
embarrassing but really there wasn't much we could do," Ling said. Under
the board's existing rules, "I really can't deny someone a license just
because they come from a family and I know they are going to do
something bad as soon as I give them a license."
Nor was there much the board could do about Michael Cosenza, 60,
whose consulting business Med-Pharm Inc. would be running
Cosenza had pleaded guilty to grand theft in 1992 in Inyo County,
Calif., for stealing more than $100,000 from a health care construction
project, court records show. He later was incarcerated in 2000 for six
months on a charge related to the earlier case. In October of that year,
he had that case dismissed and expunged from his record.
"There was no way Michael as a convicted felon could qualify for a
license," Ling said. "But under the law at the time, we didn't have the
ability to take action against a pharmacy based on who was employed.
It's probably still unclear today if we could stop him from operating
It was not the first time Cosenza had worked around his past.
In April 1997, the California Board of Pharmacy said that Cosenza was
operating two closed-door pharmacies licensed under the name of his
wife, Barbara Jackson Cosenza. According to the board's official
accusation, the two pharmacies were supposed to purchase prescription
drugs at a discount and sell them to nursing homes.
"In reality, both pharmacies were actually wholesale businesses in
which hundreds of thousands of dollars of dangerous drugs were . . .
sold to other wholesale companies," the state board alleged. "Some of
these drug shipments were delivered to the San Diego office of a courier
and picked up by non-licensed agents. . . . Upon occasion, these
dangerous drugs stayed with the courier for days without proper storage
or supervision by a registered pharmacist."
According to the accusation, Michael Cosenza had held himself out as
the owner of the two pharmacies "and conducted business transactions on
behalf of both pharmacies." The California regulators said he did not
qualify for a license because of his 1992 felony conviction. In December
1998, Cosenza's wife agreed to surrender the two licenses.
In January 2002, Barnes Wholesale Drugs Inc., a California drug
distributor, sued Cosenza. The wholesaler charged that it was owed
$529,000 for drugs purchased by an Oregon company called Pharmaceuticals
Northwest Inc. The firm was run by Cosenza's stepfather, George Kemmler,
74, a retired snack food deliveryman with diabetes and "blindness in one
eye." Barnes alleged that Cosenza paid Kemmler $1,500 a month to act as
a straw man. Kemmler declined to comment for this article.
Barnes also alleged that the company was diverting drugs meant for
nursing homes to another wholesaler in Las Vegas.
In a deposition, Cosenza denied any role in the diversion. He settled
the lawsuit in 2002 by agreeing to pay Barnes $514,000. But he fell
behind on the payments, and a judgment was entered against him for
Cosenza and his daughter declined to be interviewed for this article.
In a court filing in 2003, his lawyer said that prescriptiononline.com
was a legitimate pharmacy that complied with all of Nevada's laws and
With Michael Cosenza behind it, prescriptiononline.com's business
surged. Between July and December 2001, the online pharmacy filled
18,499 prescriptions, compared with just 17 in the prior six months.
Nearly all were for controlled substances.
"Normally, with any retail pharmacy, you would expect 15 to 20
percent of the sales to be painkillers," Ling said. "Prescriptiononline
turned that upside-down. They reversed the model."
Located in a small business park in northwest Las Vegas,
prescriptiononline.com did not employ its own physicians. Unlike some
other sites, it relied on doctors to steer business its way. All of
those physicians were in other states and were associated with middlemen
who arranged brief telephone conversations with patients in return for a
fee. Two of the doctors -- Jon S. Opsahl and William Dale from
California -- quickly became the two most prolific prescription writers
in Nevada, regulators said.
In March 2002, Ling told prescriptiononline.com's attorney that he
was concerned about the volume of controlled substances. Sherwood N.
Cook wrote back that prescriptiononline.com believed that its product
mix was consistent with that of other Internet pharmacies, and that "a
majority of the drugs filled by Internet and mail-order pharmacies are
One of prescriptiononline.com's customers was Nancy Harler, a former
nurse, of Columbia, S.C. She had been getting her painkillers from
thepillbox.com. But after that site's legal problems arose,
prescriptiononline.com began filling her orders for hydrocodone.
Harler said she had started ordering hydrocodone online for migraines
and arthritis in February 2000. In all, she estimated that she spent
$10,000 and used more than 1,500 pills. "It just got to the point where
I was no longer in control and knew I needed help," she said.
Harler is now undergoing methadone treatment for her addiction, which
she said was fed by the online pharmacies. "If you ask them anything
about the money, they say we'll be glad to pull the plug. They know they
have addicts on the line," she said.
Most of prescriptiononline.com's customers sought painkillers. The
Post's analysis showed nearly 90 percent of the orders were for
controlled substances, including hydrocodone and the generic equivalents
of Valium and Xanax.
For years, hydrocodone has been one of the most used and abused
drugs, according to the DEA. Sales have soared, and so have thefts of
the drug and hydrocodone-related emergency room admissions.
The street value of hydrocodone is also climbing, said Tony King, the
agent in charge of the DEA's Louisville office. A single generic tablet
that costs an online pharmacy 15 cents may be sold to Internet customers
for $1.50. On the street, that same tablet may go for "$3 to $5," King
said. Overall sales of hydrocodone in Kentucky have doubled in the past
four years, to 120 million tablets.
The surge began a few years back, when doctors alarmed by OxyContin
abuse began switching patients to hydrocodone, King said. "But
hydrocodone is equally dangerous," he said. "It's kind of like: Do you
use a .38- or .40-caliber gun to shoot yourself?"
A breakdown of prescriptiononline.com's sales by Zip code revealed
that four of every 10 pills flowed into Alabama, Tennessee, Louisiana
and Kentucky. Those four states routinely rank among the top five
nationally in the per-capita use of hydrocodone and Xanax, according to
law enforcement data.
The pills poured into small towns. In Hope, Ky., with a population of
152, customers bought 7,910 pills -- an average of 52 pills for each
resident. In Gunlock, Ky., population 430, customers bought 2,910 pills,
about seven per person. By contrast, in Louisville, Kentucky's biggest
city with a population of 206,239, customers bought 5,810 pills, about
0.03 per person.
In some cases, these orders went to multiple customers listed at the
same address. For example, over five months 2,030 pills were shipped to
five customers at one home in Baileyton, Ala. More than 80 percent were
In an interview, Opsahl, the California physician who wrote the
prescriptions, said he was aware that customers occasionally listed the
same address, but not to the extent detailed in The Post analysis. "I
didn't have that data at the time," he said, calling the information
"very disturbing. You've presented some information that certainly gives
me some pause how this whole system can be blatantly abused and easily
Still, Opsahl maintained that most Internet patients have legitimate
That view is not shared by Mike Vories, a physician who runs a pain
management clinic in Hazzard, Ky.
"How in the world does an Internet Web site have any control over
whether that controlled substance is going to a patient with a
legitimate complaint?" he wondered. "Really, come on. Let's call this
for what it is. A few maybe are legitimate and have pain. For the
majority, it is a source of income."
Alarmed by prescriptiononline.com's sales of controlled substances,
Nevada regulators alerted the Las Vegas office of the DEA in the summer
of 2001. Ling hoped for quick action. But the investigation stretched
In the fall of 2001, DEA agents made undercover purchases from the
Web site. In March 2002, DEA agents searched prescriptiononline.com's
small office and seized business records. But the agents allowed the
company to remain in business.
It would be 10 months before the DEA took away
prescriptiononline.com's license to sell narcotics, declaring it "an
imminent danger to the public health and safety" and seizing 21 boxes of
drugs worth $143,000. By then, the company had moved about 1.8 million
more doses of dangerous drugs.
When the DEA acted, the pharmacy board formally accused
prescriptiononline.com of more than two dozen violations, including
dispensing dangerous drugs where there was no valid physician-patient
On Jan. 22, Michael Cosenza and prescriptiononline.com agreed to
relinquish the company's license and pay $200,000 in fines. The deal
prohibited Cosenza or any member of his family from applying for a
pharmacy license in Nevada for two years.
Melissa Cosenza did not attend the hearing.