FEDEX AND UPS SAY THEY SHUN PARCELS CONTA

FEDEX AND UPS SAY THEY SHUN PARCELS CONTAINING ILLICIT DRUGS

FedEx Corp. and United Parcel Service Inc. told lawmakers that they are
taking steps to crack down on illicit Internet pharmacies that send drugs
using the trucks and planes of the delivery companies, including refusing
to carry shipments from some drug sellers.

The push to root out illegal drugs by the two companies, which carry about
75% of all air and ground packages in the U.S., comes amid growing scrutiny
of the delivery industry's role as a middleman in the drug-supply chain.
Some lawmakers and regulators are worried that FedEx and UPS are
irresistible targets for sellers of controlled substances and importers of
large amounts of prescription drugs.

Last month, the House Energy and Commerce Committee asked the two delivery
providers and credit-card companies MasterCard International Inc. and Visa
International to show what they are doing to stop the flow. The Food and
Drug Administration also is seeking help from the companies, though the
agency has little regulatory leverage over the package and credit-card
industries.

In its response to the House committee, UPS, Atlanta, said it notifies
law-enforcement officials whenever it discovers a shipment containing
illegal drugs. The company also is trying to "discourage" Internet
pharmacies that appear to be defying U.S. laws from using UPS, according to
a letter the company sent to the House committee last week.

UPS's tactics include sending cease-and-desist letters to Internet
pharmacies that steer their shipments through UPS but don't demand
prescriptions from customers. UPS is warning drug sellers to comply with
federal laws or else risk being dumped as UPS customers. A UPS spokesman
wouldn't disclose the number of suspicious-looking Internet pharmacies that
have been contacted or dropped by the delivery company.

FedEx has told lawmakers that it has intensified its efforts to go after
Internet pharmacies that use its logo on their Web sites, which FedEx
doesn't allow. The Memphis, Tenn., company also has "ceased doing business"
with a handful of Internet pharmacies. FedEx wouldn't identify those customers.

A House Energy and Commerce Committee spokesman declined to comment on
FedEx and UPS efforts to help spot illegal drug shipments, saying the panel
is waiting for formal responses from Visa and MasterCard, which it asked
for by Friday.

A spokeswoman for Visa, which, like MasterCard, is an association of member
banks, said it takes "immediate action" whenever it is "alerted that a
merchant has submitted an illegal transaction." MasterCard declined to comment.

It isn't clear yet whether the delivery and credit-card providers will be
willing to provide the FDA or other agencies with much more information
than they do already about their ties to questionable Internet pharmacies.
"This is not intended to be a 'gotcha' on UPS and FedEx," said William
Hubbard, the FDA's associate commissioner for policy. "It's more trying to
understand what's happening here, what they know and what they might be
able to do."