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Firm Tracking Consumers on Web for Drug Companies

By Robert O'Harrow Jr.
Washington Post Staff Writer
Tuesday , August 15, 2001 ; E01

A Boston technology firm is surreptitiously tracking computer users across the Internet on behalf of pharmaceutical companies, a practice that demonstrates the limits of a recent agreement to protect the privacy of Web surfers.

By invisibly placing ID codes on computers that visit its clients' World Wide Web sites, Pharmatrak Inc. can record consumers' activity when they alight on thousands of pages maintained by 11 pharmaceutical companies. For example, the company can tell when the same computers download information about HIV, a prescription drug or a company's profits from different sites.

Pharmatrak officials say the information they collect about browsing habits enables participating drug companies to compare and improve their Web sites. They don't collect names and don't intend to, they say.

But they claim they can predict whether visitors are consumers, physicians, journalists or government officials, based on where they come from and what they access.

And the company's Web site also suggests that it has plans to identify people. "In the future, we may develop products and services which collect data that, when used in conjunction with the tracking database, could enable a direct identification of certain individual visitors," it says, adding that they would never take advantage of such information.

Industry and federal officials applauded last month's agreement by DoubleClick, Engage and other online advertising services to give computer users more choice about when they're monitored. But Pharmatrak doesn't have to abide by the agreement because it isn't an advertiser.

Privacy advocates complain the company is acting inappropriately by monitoring computer users, with no notification, as they browse through sensitive health-care information.

"It's all hidden and it's across Web sites," Richard M. Smith, a software engineer and chief technology officer of the Privacy Foundation, a nonprofit group in Denver, said of Pharmatrak's activities. "It's getting very close to that line of what nice people don't do."

Michigan's attorney general's office has warned G.D. Searle & Co., a part of Pharmacia Corp., that it faces a lawsuit for allowing Pharmatrak to monitor computer users without proper notification.

"They've taken stealth to a new low. . . . It is a classic example of corporate surveillance," said Michigan Attorney General Jennifer M. Granholm. "There's no way your average computer user has any idea."

Pharmacia spokeswoman Claudia R. Kovitz said Pharmacia treats information about visitors with great care and does not receive any personally identifiable information from Pharmatrak. She acknowledged that Pharmacia Web sites did not post privacy policies until late last month and still do not mention Pharmatrak.

"As Internet technology rapidly advances, and as legal and ethical guidelines evolve, we have been developing, and will continue to develop, increasingly comprehensive privacy policies based on best practices in our field," she said.

Michael Sonnenreich, Pharmatrak founder and chief executive, said people worried about privacy can set their browsers to alert them to Pharmatrak "cookies"--small strings of computer code that serve as a unique identifier. "If they file a suit like that, they are idiots," he said about the threatened action by Michigan authorities. People should know "they're using an open access means of communication."

Sonnenreich, a D.C. resident and Washington Opera board member, added: "We are absolutely rock solid protecting the integrity and privacy of these people."

Pharmatrak officials acknowledge they do not post privacy policies at client Web sites stating how the company collects and uses information. But they said there's no need because they don't have the technical ability or intention to collect names. The company recently acknowledged on its Web site that it sets "cookies."

Virtually unknown outside the drug industry, Pharmatrak is a subsidiary of Sonnenreich's holding company, Glocal Communications Ltd. Glocal also owns Agritrak, a fledgling operation that will provide similar services to "agri-biotech" companies.

Pharmatrak relies on the same sort of techniques to tag computers that created controversy for Internet advertising services. It places "cookies" on users' computers from a distance through software code on Web pages called a "Web bug"--a process that is invisible unless a browser is specifically set to alert a user.

Sonnenreich said the company shares the information it collects in aggregate monthly reports to Pfizer Inc., Pharmacia, SmithKline Beecham PLC, Glaxo Wellcome PLC, Aventis Pharmaceuticals Inc., Novartis Pharmaceuticals Corp., American Home Products Corp., Hoffmann-La Roche Inc. and three other drug companies that have agreed to collaborate.

Sonnenreich said the company can help clients compare how computer users behave at their Web sites relative to those operated by competitors.

"Determining, for example, whether the greatest number of visitors come from Europe, Asia or the U.S, and whether they are principally from government, academia, or other commercial organizations will show whether a company is reaching its designated target audiences efficiently," Pharmatrak's Web site says.

"Equally, a sudden drop or increase over time from a particular audience such as a government body is a signal well worth heeding."

The company offers an array of other services, including one called Netwatcher. Using a sophisticated search engine, Netwatcher scours the Web for any mention of client companys' executives, products and financial matters.

The search is far more powerful than Yahoo and Google, relying on thousands of keywords to root out information, company officials said. For now, Pharmatrak focuses on material posted to Web sites. In the future, it may also sift through online chat rooms.

Company officials compared their word matching program to systems operated by the National Security Agency and the Central Intelligence Agency. "It's a customized intelligence search engine," Sonnenreich said. "I'm sure the government does the same thing."

Sonnenreich declined to share details. But he said companies have used the reports to respond to remarks made about a company executive and its products. In the future, companies will be able to follow up on rumors circulated by competitors, or protests planned by groups such as Greenpeace or the Sierra Club, he said.

"Any negative reports that appear on the Internet are highlighted early enough to allow the company to rectify the situation before the issue becomes a full-blown problem requiring the services of the legal department," the company literature says.

Janlori Goldman, director of the Health Privacy Project at Georgetown University, is not comforted by the company's reassurances. She worries that such stealthy scrutiny will dissuade people from using the Web to find out helpful information about health care.

"This is analogous to having hidden cameras and spies tracking people's movements and communication on the Web," Goldman said. "The lack of privacy rules on the Web is the number one barrier to people getting better health-care information, because they're afraid."

© 2001 The Washington Post Company


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