Biotech
Monday, December 11th, 2023 3:21 pm EDT
Key Points
- Criminal Operation Led by Poker Player: Lazaro Hernandez, a poker player based in south Florida, orchestrated a $230 million nationwide scheme to counterfeit prescription medications, with a focus on lifesaving HIV drugs. Hernandez’s secret operation involved altering pill bottles, including those for Biktarvy and Descovy, two major HIV medications, and replacing them with other pharmaceuticals, such as the antipsychotic drug Seroquel. He funded this criminal enterprise by gambling, taking private jets to Las Vegas, and participating in poker tournaments.
- Concerns and Legal Actions by Gilead Sciences: Gilead Sciences, a pharmaceutical company, is deeply concerned about the rising issue of drug counterfeiting, estimated by the World Health Organization to be up to $431 billion globally each year. In response to a potential counterfeiting problem discovered in August 2020, Gilead filed a lawsuit in July 2021 against 161 defendants, including pharmacies and wholesale pharmaceutical distributors. The legal action accused them of participating in a scheme to alter Gilead’s medications, particularly Biktarvy and Descovy. Similar legal actions have been taken by other pharmaceutical companies, including Johnson & Johnson.
- Drug Diversion and Counterfeiting Challenges: The article highlights the challenges faced by pharmaceutical companies, emphasizing Gilead’s efforts to combat counterfeiting through a dedicated “war room” at its headquarters. The counterfeiting operation involved obtaining authentic empty bottles, filling them with different drugs, and packaging them with counterfeit seals. Drug diversion, where patients sell their prescribed medications for cash, is identified as a significant factor contributing to counterfeiting. Criminals approach vulnerable individuals, inducing them to sell their medications, which are then altered and resold in the supply chain. The article underscores the need for stronger security measures and vigilance to prevent such criminal activities and protect public health.
In Las Vegas, Lazaro Hernandez, a flamboyant poker player, was found to be overseeing a nationwide $230 million scheme to counterfeit prescription medications, focusing on lifesaving HIV drugs. The operation involved altering pill bottles for medications like Biktarvy and Descovy, replacing them with antipsychotic drugs like Seroquel. Hernandez, based in south Florida, funded his counterfeiting operation through proceeds from gambling, taking private jets to Las Vegas and participating in poker tournaments.
The counterfeiting scheme targeted Gilead Sciences, the maker of Biktarvy and Descovy, which filed a lawsuit in July 2021 against 161 defendants, including pharmacies and wholesale pharmaceutical distributors. The pharmaceutical industry faces increasing challenges from counterfeit drugs, estimated to contribute to up to $431 billion in losses globally annually. In the U.S., incidents of counterfeiting rose 17% in 2022, reaching 2,121 cases, according to the Pharmaceutical Security Institute.
Gilead’s efforts to combat counterfeiting involve a “war room” at its headquarters, where confiscated counterfeit pills and bottles are stored. Counterfeit medications often involve altered packaging, incorrect tablets, caps, labels, and leaflets. The illegal practice of altering pill bottles and reselling them back into the supply chain undermines the federal Drug Supply Chain Security Act, which requires a traceable chain of custody for prescription medications.
The Gilead lawsuit exposed distributors involved in the counterfeiting scheme, with ProPharma Distribution settling for $3.3 million and agreeing to a permanent prohibition on selling Gilead medications. However, none of the distributors faced criminal charges. The counterfeiting operation relied on obtaining authentic empty bottles, filling them with different drugs, and packaging them with counterfeit seals.
Drug diversion, wherein patients sell prescription medications for cash, is a significant factor contributing to the counterfeiting problem. Criminals approach vulnerable individuals, often outside shelters or clinics, inducing them to sell their medications, which are then altered and resold in the supply chain. Gilead and Johnson & Johnson have taken legal action against counterfeiting, emphasizing the criminal nature of such acts that put patient lives at risk. Counterfeiters use sophisticated methods, similar to those used by drug traffickers.
The article highlights challenges faced by pharmaceutical companies in combating counterfeit drugs, emphasizing the need for stronger security measures to prevent these illegal activities and protect public health.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/11/fraud-in-a-bottle-big-pharma-takes-on-counterfeit-drugs.html
