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[IP] Counterfeit drugs

The following may or may not affect our group, but the info may be pertinent
to someone you know:

June 5, 2001
3 Fake Drugs Are Found in Pharmacies

The Food and Drug Administration is investigating four cases of counterfeit
prescription drugs making their way to pharmacy shelves, and, in some cases,
being given to patients.

No one is known to have been seriously injured, although some patients have
had adverse reactions. But F.D.A. officials say they are worried about the
four cases and have made the investigation a high priority.

"This little spate of cases is highly unusual," William K. Hubbard, a senior
associate commissioner at the F.D.A., said. In the last decade, he said,
there have been only a handful of similar instances.

The recent cases involve three injectable drugs: Serostim, a growth hormone
sold by Serono and used by AIDS patients; Nutropin, a growth hormone sold by
Genentech; and Neupogen, a cancer drug sold by Amgen. All three drugs are
expensive, which could be why the counterfeiters selected them. A 12-week
course of Serostim, for instance, costs $21,000.

The counterfeiters may have been able to find an easy market for their drugs
since Serostim and Nutropin are sought by people who believe the drugs will
help them lose weight, build muscle and smooth wrinkles. Some Web sites
promote the drugs for such uses, and, in some cases, offer to sell them
without a prescription.

F.D.A. officials and the drug companies have sent letters to pharmacies,
doctors and distributors all over the country to warn them about the
counterfeit drugs.

Serono first realized that someone was counterfeiting Serostim late last
year when patients began to call to complain that they had suffered a slight
swelling or a skin rash after being injected. Counterfeit versions of
Serostim have been found in at least seven states.

Last month, F.D.A. officials reported three more cases of counterfeit drugs,
this time involving Neupogen, Nutropin and a second fake batch of Serostim.
Genentech, which makes Nutropin, said pharmacies in Florida, California and
Indiana had found fake copies of the drug on their shelves.

F.D.A. officials say they cannot discuss many aspects of the recent cases
because of the ongoing investigation.

And it is not clear whether the counterfeit drugs were produced in the
United States or came from overseas. Counterfeiters are drawn to
prescription drugs, in part, because their small size makes them easy to

But either way, the drugs appear to be coming through networks that operate
largely beyond the reach of regulators.

At least some of the counterfeit Serostim ended up in pharmacies after it
was quickly bought and resold by a handful of small drug distributors doing
business in a gray market for medicines that has repeatedly raised concerns
among government officials.

According to the distributors and government officials, a small Florida
distributor sold some counterfeit Serostim to Dutchess Business Services
Inc., a small distributor in Las Vegas, which then sold it to Quality King
Distributors Inc., a distributor in Ronkonkoma, N.Y. Quality King officials
said they then sold it to other distributors.

Prescription drugs are often diverted into this gray market by individuals
or small businesses who say they are buying the medicines for nursing homes
or other institutions that are offered steep price discounts by many
pharmaceutical companies. Instead, these buyers sell the discounted drugs
into a network of hundreds of small distributors who resell the drugs any
number of times, marking up the price in the process. The origin of a drug
can quickly become unclear as it passes from warehouse to warehouse.

"Counterfeiting and diversion go hand in hand," said Stephen J. Haynes, who
retired last year from his job as a special agent in charge of the
investigative division of the office of criminal investigation at the F.D.A.

Congress has also recently become concerned about whether inspectors at the
F.D.A. and the United States Customs Service have enough resources to stop
illicit medicines from coming from overseas.

In a March letter to the F.D.A., Representative Billy Tauzin, Republican of
Louisiana and chairman of the House Energy and Commerce Committee, said he
was concerned that the government's system of inspecting packages of
prescription drugs mailed into the United States from overseas "was
inadequate and incapable of protecting the public from potentially
adulterated and unsafe medicines."

Customs officials said their seizures of counterfeit and other prescription
drugs had risen sharply in recent years. The service seized 9,725 parcels of
prescription drugs in 1999, compared with 2,145 the year before. Most of the
seizures were drugs purchased by Americans from Web sites operating in
foreign countries. But some of the seizures were commercial shipments that
were intended for resale, customs officials said.

The committee's Oversight and Investigations Subcommittee plans to hold a
hearing on imported prescription drugs on Thursday.

Representative James C. Greenwood, Republican of Pennsylvania, who is
chairman of the subcommittee, said he had recently visited an airport mail
center where customs officials showed him some parcels they had seized.

"There were unidentifiable pills coming in in plastic bags," Representative
Greenwood said. "This is a big problem, and it has a potential to kill

Paul K. Schwartz, director of trade enforcement at the Customs Service, said
he did not believe prescription drug counterfeiting was on the rise.

"But," he added, "there is no way of knowing what we are not catching."

All three companies with drugs that have been recently counterfeited said
they immediately told the F.D.A. when they found the fake drugs.

In each case, the counterfeit drug looked nearly identical to the real
product. For Serostim, even the lot number, which is used to trace drugs,
was a real number. The expiration date, however, had been changed from
August 2001 to August 2002.

Some of the counterfeit vials were found to contain cheap, generic versions
of the drugs, while others had been filled with clear liquid that contained
no active drug ingredient. At least one vial of Nutropin contained human

Two earlier cases provide a glimpse of how illegal drugs can enter the

>From 1991 to 1993, Moshe Milstein, operated a drug wholesaling business out
of his Brooklyn home and repackaged drugs from overseas with labels made to
look like those on the brand-name drug, according to court records. Mr.
Milstein then sold the drugs to other wholesalers and to pharmacies and
doctors in the New York area. Prosecutors said laboratory tests showed that
some of the counterfeit drugs contained bacteria and endotoxins, which are
powerful poisons produced by bacteria.

Mr. Milstein was convicted last year of five felonies, including
distribution of misbranded drugs, and is expected to be sentenced on
Thursday. The counterfeit drugs that he had sold through his company, Gem
Distributors, included Serono's Pergonal and Metrodin, which are fertility
drugs, and Eldepryl, a drug for Parkinson's disease made by Somerset
Pharmaceuticals Inc.

Mr. Milstein's lawyer declined to comment.

In another case in 1997, Medical Sales Inc., a small company in San Diego
County, Calif., bought millions of doses of drugs made by an Indian
manufacturer and repackaged them under the name "American Pharmaceutical,"
according to court documents. The company planned to sell the drugs, which
included antibiotics, painkillers and diet drugs, to pharmacies in Tijuana,
Mexico, where they could be purchased by American tourists.

Christopher Kirkman, the company's president, was convicted of a misdemeanor
charge of selling misbranded drugs in 1999 and was given six months'

Robert S. Brewer Jr., Mr. Kirkman's lawyer, said his client never sold any
of the repackaged drugs because they were seized by the F.D.A.

The drug distributors that bought and sold the counterfeit Serostim late
last year said they did not know the drug was illegitimate until they heard
about a warning Serono sent out. Dutchess Business Services in Las Vegas
said it immediately contacted authorities when it discovered it had bought
and sold the counterfeit drug.

Quality King said it had voluntarily offered to repurchase Serostim from any
of the wholesalers it had sold it to.

The distributors say they play an important role in getting drugs to

"You can't anticipate all the ways that people are going to corrupt the
system," said Patricia L. Kantor, a lawyer in the New York office of Edwards
& Angell who represents Quality King.

A man answering the phone at Dutchess, who refused to give his name, said
Dutchess had lost $70,000 when Quality King refused to pay for the
counterfeit Serostim it bought. "We are entrepreneurs," he said. "We're just
trying to make a living."

Copyright 2001 The New York Times Company | Privacy Information
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