INDIAN ISLAND (AP) – A mail-order pharmacy launched in 2005 in a state-backed effort to save tax dollars and promote economic development for the Penobscot Indians is under investigation for its involvement in the sale of prescription drugs over the Internet, WMTW-TV reported.

PIN Rx was targeted by the Maine Board of Pharmacy following a confidential complaint that it was selling controlled substances through questionable Internet sites that offer prescriptions to buyers who do not have to meet face-to-face with a physician, the station said.

Nearly 200,000 prescriptions have come under scrutiny.

The Attorney General’s Office presented a preliminary report about PIN Rx to the pharmacy board on Jan. 23. The company was then offered a consent agreement that includes an admission of wrongdoing, loss of license and a fine of $183,000 – or $1 per questionable prescription.

An attorney for PIN Rx – the PIN stands for Penobscot Indian Nation – said it will not accept a deal.

“These people were operating along with the state in good faith to run this program and … there was no knowledge of wrongdoing. No conscious disregard of any wrongdoing,” said Neal Pratt, who was hired to represent the company’s board.

Pratt and Reggie Gracie, PIN Rx’s director of operations and one of its pharmacists, were at odds about who directed the sales in question.

“The decision-making power that was exercised by the pharmacists is something we still don’t have a full grasp on,” Pratt said.

Gracie said the decisions about where drugs are purchased and to whom they are sold rest with the board.

The pharmaceuticals offered on the Web sites in question can range from lifestyle drugs like Viagra to controlled substances such as hydrocodone.

PIN Rx is being investigated for selling controlled substances. Pratt said PIN Rx has been working closely with the Board of Pharmacy and hopes that the company can be cleared of wrongdoing even before the case goes to a hearing. Otherwise, the company will have an adjudicatory hearing within a few months.

The mail-order operation was created with the help of Gov. John Baldacci, who caused hard feelings among Maine Indians when he opposed their casino gambling initiative.

The state provided a $400,000 grant to help the Penobscot Nation set up the company that supplies drugs to clients of the state Medicaid program.

The program was designed to save money for both the state, which pays a lower reimbursement rate to mail-order pharmacies, and the client, who gets a waiver on the co-payment.

Despite the help from the state and federal governments, PIN Rx has struggled financially, according to WMTW. While the project was expected to generate dozens of jobs, the company had to lay off workers in November and only about 10 people are now working there.