The Big, Bad World of Online Pharmacies

According to a recent report released by MarkMonitor, an enterprise brand protection company, the vast majority of online pharmacies is uncertified and offer suspiciously low prices.

Of the 2,930 online pharmacies MarkMonitor found for its Brandjacking Index, only four were certified in the Verified Internet Pharmacy Practice Sites (VIPPS) program by the National Association of Pharmacy.

These uncertified online pharmacies offered discounts as high as 90 percent from those offered by VIPPS-certified sites, indicating “that the products are of suspicious quality,” according to the report.

Traffic to these online pharmacy sites averaged 42,000 visitors per site with 68 percent of them having enough traffic to receive ranks on Alexa. “Using this traffic information as well as published figures for average eCommerce order size and traffic conversion rates, MarkMonitor estimates these pharmacies earn almost $11B in annual revenue,” the company noted in a press release.

The U.S. hosts 36 percent of these online pharmacy sites, which is the largest share of the worldwide total. Germany ranked second with 13 percent.

MarkMonitor notes that the U.K.’s share of hosted pharmacies dropped to 7 percent this year from 12 percent in 2008.

The study also notes that the there were 19,163 cybersquatting domains for the top six pharmaceutical brands highlighted in the study, an all-time high that marks a 9 percent increase from 2008. Three-quarters of these cybersquatted brands were lifestyle drugs.

Business to business exchange listings for bulk quantities of pills and active pharmaceutical ingredients increased 23 percent in 2009 compared to the previous year. China was the country of origin for 49 percent of these exchange listings, while India was the place of origin for 17 percent of them.

“Scammers are opportunists, and by targeting the supply chain they’re positioning themselves to move the greatest amount of fake product they can,” said Frederick Felman, chief marketing officer at MarkMonitor. “This maximizes their return on the scam but it also poses a potential danger to peoples’ health and safety, not to mention brand reputation.”

The “backdrop” of the healthcare reform debate, along with a resurging H1N1 virus amplify this risk.

“As more people try to save money when purchasing drugs and more companies look to streamline operations, especially in the current economy, the cost savings and efficiencies of eCommerce become even more attractive, presenting a tempting opportunity for online fraud and brand abuse on both the supply and demand side of the equation,” the company noted.

MarkMonitor also observed more than 151,000 unique phishing attacks in the second quarter of this year, a record level. There were an average of 351 attacks per organization in the quarter, also a new record.

Other reports show a decline in phishing attacks.

Social networking attacks saw a 168 percent increase in the second quarter compared to the same time period last year.

Phishers targeted brands in the financial and payment services industries the most, as the two sectors were the source of 80 percent of all attacks in the second quarter.

The company also noted that the U.S. hosted 50 percent of all phishing attacks in the quarter, the most in the world. Canada hosted 13 percent, while Germany hosted 3.6 percent.

Sources:</strong

http://www.markmonitor.com/pressreleases/2009/pr090928-bji.php

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=114346

http://www.pcworld.com/businesscenter/article/172712/do_phishers_have_more_poles_in_the_water.html

http://www.thewhir.com/web-hosting-news/092809_Phishing_at_a_Two_Year_High_MarkMonitor