SAN FRANCISCO, Oct. 6 (UPI) -- With the methodical consistency of an accountant, a Texas truck driver allegedly stole $4.7 million in goods from San Francisco drug wholesaler, McKesson Corp., in weekly installments over a three-year period, siphoning off the fortune $30,000 at a time.
Meanwhile, New Jersey police arrested nine men last month for buying a growth hormone drug from AIDS patients outside New York City health clinics and reselling it to wholesalers in other states at a 750-percent profit.
The list goes on and on. Tightly regulated prescription drugs are increasingly leaking into a black market run by a new class of drug dealers -- those who deal strictly in pharmaceuticals.
State and federal drug enforcement agencies say they are noticing an increase in counterfeiting and drug diversion cases involving popular brand name drugs such as Procrit, Lipitor, the impotence pill Viagra and the AIDS-related drugs Serostim and Combivir.
According to the U.S. Drug Enforcement Administration, medications generally are diverted to the black market or back to wholesalers by employees who steal from hospitals, clinics and pharmacies -- or even the wholesalers themselves -- and by patients who resell their prescriptions on the street for quick profits.
In at least one case, however, a large wholesaler appears to have laundered drugs through a complex chain of buyers and sellers in order to boost its profits: AmericsourceBergen Corp., of Chesterbrook, Pa., currently is under investigation by the FBI for diverting pharmaceuticals from nursing homes into a secondary market.
Though drug-diversion crimes remain relatively rare, they still cost taxpayers and businesses millions of dollars each year and are both complex and difficult to stop.
"It's a complicated process and that's how they get away with it," Steve Opferman, law enforcement supervisor for the Los Angeles Health Authority Law Enforcement Task Force, or HALT, told United Press International. "There's a big gray market network around the country and these shady wholesalers all seem to know each other," he said.
Prescription drugs journey through a convoluted chain of distribution before they reach the consumer and each link along the way is vulnerable to theft and tampering. Stolen products readily can be resold to wholesalers where they seamlessly mesh back into the distribution chain.
Part of the problem is unscrupulous wholesalers look the other way when cut-rate prescription drug offers fall into their laps, Opferman said. The New Jersey drug diversion ring, for example, found a ready market for their black-market growth hormone among California and Florida wholesalers, who asked few questions about its source.
In February, a Florida grand jury concluded that state's wholesale drug industry is "corrupted by the infiltration of a criminal element, which is making a fortune while tainting our drug supply."
The grand jury's blistering report led Florida to tighten its licensing requirements for wholesalers and distributors and now has one of the most rigorous programs in the country.
Such steps are sorely needed, said Amanda Forster, spokeswoman for the Healthcare Distribution Management Association in Reston, VA., the industry group representing drug wholesalers and distributors. Organized criminals tend to migrate to where quick money can be made and the high price of prescription drugs is proving to be an irresistible enticement, she added.
"Criminals do enter the system," Forster told UPI. "Our focus has been on doing everything and anything we can to prevent these people from getting a license in the first place."
Because state agencies often are under-funded and fail to regulate the industry adequately, however, distributors need to be the good actors in the system, Forster continued. She said the HDMA encourages its members to step up to the plate by performing background checks on all employees, regularly inspecting their properties and implementing comprehensive security systems.
The U.S. Food and Drug Administration has been nabbing counterfeit and diverted products through its enforcement program. Last year investigators uncovered a batch of counterfeit Procrit -- a widely prescribed medication for anemia -- which had been diverted from the supply chain and relabeled to show a higher dose. The discovery and ensuing consumer panic had high stakes implications for the $1.2 billion worth of Procrit that its manufacturer, the international conglomerate Ortho Biotech Products LP -- still had in its inventory.
The company opted to immediately implement sweeping anti-counterfeit measures including a new packaging technology that uses a color-changing seal to verify the authenticity of the product. It also has shored up security by using a punitive strategy with its suppliers and maintains an avenue for consumers to report suspected counterfeit Procrit batches on its Web site.
"We've told them: If you purchase Procrit from a source other than Ortho Biotech then you'll lose your direct account with us," John Dempsey, head of the company's brand security, told UPI. "When you're dealing with a supply chain whose profits are very slim, that's a powerful statement."
Likewise, Bayer Biological Products of Research Triangle Park, N.C. -- part of the international Bayer Group -- has moved to prevent tampering of its products with a logo-embossed shrink-wrap on each vial of its newest medicines. The company also is requiring its wholesalers to undergo mandatory quality-assurance training and to sign a contract forbidding unauthorized resale of its products.
These measures, though steps in the right direction, are not enough to prevent thieves from siphoning off drugs from the system or from introducing counterfeit ones, claims the FDA's counterfeit task force, which has recommended a multi-pronged approach.
For example, the task force suggests manufacturers eliminate unnecessary steps in the supply chain by shipping their products in smaller units of size, making it harder for counterfeit pills to be mixed with authentic ones by repackagers.
Forster said manufacturers should employ a computer chip or electronic tracking system that would track and trace products from the factory to the drugstore. Such technology, though costly, might be the most effective way to ensure the safety of the drug supply, she said.
Ultimately, the consumer loses when the drug supply is vulnerable to theft and tampering, said DEA spokesman Ed Childress. Lifesaving drugs might be unsafe and the cost of implementing tighter security likely will be passed on to patients if pharmaceutical companies must shoulder the financial burden.
"The pharmaceutical companies are not going to take that loss," Childress told UPI. "They'll build the cost into the product and consumers will face higher prices."
