BEIJING — Chinese officials said Wednesday that licenses had been revoked for three drugmakers, including one that sent human growth hormone to the United States, and that they had punished 125 other companies, mostly pharmacies, for making, selling or distributing performance-enhancing drugs.
The move was heralded as evidence that China was determined to live up to its promise to host a clean Olympics.
Officials also challenged claims by the United States that China accounted for 99 percent of the illicit performance-enhancing drugs in the largest drug-enforcement action in United States history, known as Operation Raw Deal, last year. The United States had asked China to investigate 37 drug manufacturers.
“If China’s ingredients were used to produce performance-enhancing drugs and illegally sold after being legally exported, the importing countries should bear the responsibility,” Wu Zhen, the deputy head of the State Food and Drug Administration, said at a news conference. “Most of such products were exported with company contracts, export licenses and warrants from the importing countries, and their use was clearly stated.”
Rusty Payne, a spokesman for the United States Drug Enforcement Administration, which led Operation Raw Deal, said in a telephone interview from D.E.A. headquarters in Alexandria, Va.: “I’m not going to get in a back-and-forth. It’s too sensitive. We’re talking about China here. We didn’t indict these companies. We provided the information to China, asking them to look into it, and apparently they have.”
Last year, the D.E.A. said the United States government had not approved the imports and was counting on China to stop the flow at the source. A D.E.A. statement had said: “D.E.A. successfully attacked the illegal steroid industry at every level of its distribution network — from the manufacturers in China who supply the raw materials, to the traffickers in the United States who market the deadly doses.”
One of the drugmakers that China named Wednesday was GeneScience Pharmaceutical, which is based in northern China and run by an American-educated executive. Last September, a federal grand jury in Rhode Island indicted the company for illegally distributing millions of dollars in human growth hormones in the United States. The company had denied the allegation, but its American agent pleaded guilty in February to conspiracy to distribute H.G.H.
In making its announcement Wednesday, a senior drug agency official in Beijing said the agency had revoked the GeneScience license during a nationwide crackdown begun over the past year.
Chinese officials said that they checked cities that are participating in the Olympics, and that most areas were in compliance.
“Inspections show Chinese pharmaceutical manufacturers, wholesalers and retailers have basically reached the requirements for doping control,” Wu said, according to Xinhua, the state-run news agency.
The drug agency also said one unnamed person had been given a seven-year prison sentence for illegally distributing drugs.
The vast majority of the companies punished were retail pharmacies, the government said.
The government did not release a full list of companies involved in making and distributing illegal drugs but said they would all be punished according to the law, and that stiffer penalties would be meted out on companies that illegally distribute performance enhancing drugs ahead of or during the Olympics, which open in Beijing on Aug. 8.
Of the 37 company dossiers referred to China from the D.E.A. after Operation Raw Deal, Wu said that investigation by China’s Ministry of Public Security showed 13 had exported such ingredients but most of them were doing legal business, some with the permission of the D.E.A. Among the remaining 24, he said 17 were not registered and provided false information, making further investigation impossible.
“We welcome objective coverage and international supervision on China’s antidoping work,” Wu said. “We won’t accept, we even firmly oppose, irresponsible and distorting reports.”
Beijing is making an effort to show that it is fighting sports doping and investigating claims that China has become a major center for the manufacture and export of performance-enhancing drugs.
In the 1980s and early 1990s, China struggled with a series of doping scandals involving some of its top athletes. But since then, China has produced some world-class athletes with only a few doping scandals. Last November, China created the China Anti-Doping Agency.
David Barboza reported from Beijing and Duff Wilson from New York.
PROVIDENCE, R.I.—A Chinese drug manufacturer accused of illegally shipping human growth hormone into the United States has been ordered to forfeit about $2.7 million to the federal government. Genescience Pharmaceutical Co. and its chief executive, Lei Jin, were indicted on federal charges last year as part of Operation Raw Deal, in which more than 120 people were arrested and dozens of underground labs were raided.
Prosecutors say Genescience illegally marketed human growth hormone over the Internet to a network of distributors.
Federal agents seized money linked to the alleged illegal shipments from the New York branches of Chinese banks. The U.S. Attorney's office in Rhode Island said Wednesday that a federal judge ordered the forfeiture earlier this month.
John Tarantino, an attorney for Genescience, said he could not immediately comment.
Boston Firm to Pay $10.5M Over HGH
By MARK PRATT -September 17,2007
BOSTON (AP) — A company that distributed human growth hormone to "well known athletes and entertainers" has agreed to pay a $10.5 million penalty and cooperate with law enforcement in ongoing investigations, federal prosecutors said Tuesday.
Steve Littlejohn, a spokesman for St. Louis-based Express Scripts, said the company fully cooperated in the federal investigation and has already implemented procedures to prevent the illegal distribution of human growth hormone.
"Express Scripts does not condone the use of human growth hormone for anti-aging, cosmetic or performance enhancement purposes," the company said in a news release.
Specialty Distribution Services "knowingly distributed human growth hormone to certain well known athletes and entertainers, including a well known athlete in Massachusetts, knowing that their intended use was athletic performance enhancement, cosmetic or anti-aging," in violation of federal law, the U.S. attorney's office said in a news release.
Prosecutors did not mention any names of those believed to have bought HGH from the firm.
The drug in question was approved by the Food and Drug Administration only for specific purposes, including treatment of children with growth failure due to inadequate growth hormones, prosecutors said.
THE VAST MAJORITY OF GH SALES GO TO PEOPLE OVER THE AGE OF 20. AS DISCUSSED BELOW, MOST OF THIS MUST BE ILLEGAL DISTRIBUTION.
THE BEST WAY TO STOP SUCH DISTRIBUTION IS TO COMPELL PHARMACEUTICAL COMPANIES AND SECONDARY WHOLESALERS TO POLICE THEMSELVES AND STOP THE DISTRIBTION OF GH TO OUTLETS THAT THEY WOULD KNOW FOR CERTAIN COULD ONLY BE FOR ILLEGAL INDICATIONS (ANTIAGING CLINICS AND WEBSITES).
Information from IMS Health indicates that a total of 212,921 new and refill GH prescriptions were filled by retail and mail service pharmacies in 2004 (Brian Palumbo, written communication, IMS Health, April 2005). These prescriptions generated total sales of approximately $622 million ($427 million via mail services and $9.5 million via clinics), constituting 89% of sales for the class of drugs “anabolic hormones” (this class, for market surveillance purposes, includes GH) (Brian Palumbo, unpublished data, IMS Health, 2005). Of these GH prescriptions, 74% were for individuals aged 20 years and older and 43.7% were for individuals aged 40 to 59 years. These sales and prescription figures include legal prescribing for adult GH deficiency (GHD, defined below) and AIDS wasting syndrome, but do not include distribution of GH from antiaging Web sites. In 2002, physicians within the antiaging industry estimated that 100,000 individuals obtained the drug without a prescription.
Steroids sting leads to arrest of 2 cousins from Bay Area
ONE ALLEGEDLY STOLE DRUGS WHILE WORKING AT GENENTECH
Setting the record straight (Publ. 09/26/07) An article about a sweeping federal crackdown on performance-enhancing drugs incorrectly reported the relationship between two men charged in San Jose with conspiracy to possess with intent to distribute Human Growth Hormone. Lance and Brandon Tomlinson are cousins.
Snagged by a sprawling federal steroids sting, two Bay Area brothers are facing federal allegations that they stole human growth hormone from biotech giant Genentech Inc. and sold it through a sports nutrition store in San Jose.
Their arrests represented just a fraction of Operation Raw Deal, the largest steroid crackdown in U.S. history, a coordinated effort to disrupt worldwide steroid manufacturing and distribution.
The Drug Enforcement Agency, which announced the operation Monday, was assisted by nine other countries, including China. Agents raided 56 labs across the country that manufactured anabolic steroids and human growth hormone and seized 11.4 million doses of drugs, according to the DEA.
Locally, Lance Tomlinson, 38, of San Jose, who owns Max Muscle Sports Nutrition in San Jose, and his brother, Brandon, 44, of Burlingame, who works at Genentech, are facing time in federal prison if they are convicted of conspiracy to possess and intent to distribute human growth hormone. One of Lance Tomlinson's employees, Jeffrey Coffron, 33, of San Jose was also charged.
Brandon Tomlinson was released
Texan indicted in [Chinese] hormone scheme
By Matthew Dolan
Sun reporter
Originally published May 11, 2007
A Texas man accused of importing almost $1 million worth of human growth hormone from China has been indicted in federal court in Baltimore on charges he resold the restricted drug to at least one Maryland man.
Bradley C. Blum, 36, of Houston, appeared in U.S. District Court in Texas on May 4 on a criminal complaint, but the case was immediately transferred to Maryland this week after a grand jury in Baltimore indicted him on similar charges of conspiring to illegally distribute and illegally distributing human growth hormone.
The Maryland U.S. attorney's office announced Blum's arrest yesterday.
According to court papers filed in Texas, an investigation led by the federal Food and Drug Administration has long targeted GeneScience China, a biotechnology company. Authorities in court documents accuse GeneScience of repeatedly exporting illegal shipments of human growth hormone into the United States by mislabeling the packages as glassware, toys and hair products.
"In fact, on its website it offers its customers 'insurance' against U.S. Customs seizure at the rate of $3/vial, so that if a shipment of GeneScience HGH is seized by the FDA or U.S. Customs before delivery to a U.S. customer, GeneScience will reship the order at no further cost to that customer," FDA Special Agent Michael Widenhouse wrote in the criminal complaint lodged against Blum.
Between 2004 and 2006, the company and Blum -- who said he was the company's North American representative -- imported at least 600 shipments of illegal hormone into the United States, a total worth more than $900,000, according to Widenhouse.
The federal charges in Texas allege Blum sold the restricted drug to a Leonardtown man over the Internet. Authorities believe that Blum arranged for at least 50 deliveries to at least 15 people in Maryland, documents filed in federal court in Texas show.
Court papers did not detail why customers wanted the hormone, which can reproduce cells and has controversial applications in anti-aging treatments.
The indictment against Blum also seeks $863,534 in property and proceeds traceable to his alleged scheme. If convicted, he faces a maximum sentence of five years in prison on each of two charges.
PFIZER SUBSIDIARY AGREES TO PLEAD GUILTY FOR OFFERING KICKBACK AND PAY $19.68 MILLION CRIMINAL FINE; SECOND SUBSIDIARY AGREES TO PAY ADDITIONAL $15 MILLION PENALTY TO RESOLVE ALLEGATIONS OF ILLEGAL PROMOTION OF HUMAN GROWTH HORMONE
BOSTON, MA- PHARMACIA & UPJOHN COMPANY, INC., a subsidiary of Pfizer, Inc., was charged today in federal court with offering a kickback in connection with its outsourcing contract for the administration and distribution of its human growth hormone product, Genotropin.
(Media-Newswire.com) - BOSTON, MA- PHARMACIA & UPJOHN COMPANY, INC., a subsidiary of Pfizer, Inc., was charged today in federal court with offering a kickback in connection with its outsourcing contract for the administration and distribution of its human growth hormone product, Genotropin. The company has agreed to plead guilty to the charge and pay a criminal fine.
Additionally, another Pfizer subsidiary, PHARMACIA & UPJOHN COMPANY LLC, has entered into a Deferred Prosecution Agreement with the Government for its illegal promotion of Genotropin for such "off-label" uses as anti-aging, cosmetic use and athletic performance enhancement. As a result of the criminal plea and Deferred Prosecution Agreement, the companies will pay a total of $34.7 million.
United States Attorney Michael J. Sullivan; Joseph C. Moraski, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General in New England; and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation in New England, announced today that PHARMACIA & UPJOHN COMPANY, INC. was charged in an Information with offering a kickback.
In accordance with the plea agreement also filed today in federal court, PHARMACIA will plead guilty to a one count Information charging the offer of a kickback. To resolve this criminal charge, PHARMACIA will pay a criminal fine of $19.68 million. As a result of its criminal conviction, PHARMACIA will be excluded permanently from participation in all federal health care programs.
"The relationships between pharmaceutical companies and the pharmacy benefit managers who have so much influence over the drug choice of millions of Americans must be free of the taint of kickbacks or other illegal payments," commented U.S. Attorney Sullivan. "It is my hope that the conduct exposed by this investigation will bring greater transparency and integrity to the dealings between pharmaceutical companies and pharmacy benefit managers."
The Information alleges that PHARMACIA violated the Anti-Kickback Act by offering to make excess payments on a distribution contract, in the amount of $12.3 million, to a subsidiary of a pharmacy benefit manager, in the expectation of obtaining improved formulary positioning and improved formulary ancillary benefits from that pharmacy benefit manager for PHARMACIA's drug products.
A pharmacy benefit manager, commonly referred to in the pharmaceutical industry as a "PBM," often acts as a middleman between pharmaceutical companies and health insurers. PBMs often recommend pharmaceutical products to health plans. The list of pharmaceutical product recommendations is called a formulary. In this case, PHARMACIA offered to overpay a subsidiary of a PBM for work on a drug distribution contract in the expectation that the PBM would in turn recommend PHARMACIA's drug products, including by means of formulary recommendations, to certain of the PBM?s clients.
In addition, the U.S. Attorney's Office has also entered into a Deferred Prosecution Agreement with PHARMACIA & UPJOHN COMPANY LLC arising out of an investigation into the illegal promotion and distribution of PHARMACIA's human growth hormone product Genotropin. At all times relevant to the agreement, Genotropin was FDA approved solely for treatment of children with growth failure due to inadequate secretion of endogenous growth hormone, and other growth-related diseases such as long-term replacement therapy in adults with growth hormone deficiency; treatment of pediatric patients with Prader-Willi Syndrome; and long term treatment of growth failure in children born small for gestational age who fail to manifest catch-up growth by two years of age.
According to the Deferred Prosecution Agreement, and as more fully set forth in the Information attached to that agreement as Appendix A, PHARMACIA engaged in the unlawful promotion of Genotropin for so-called "off-label" uses, ( i.e. uses that had not been FDA approved ). PHARMACIA promoted Genotropin for such off-label purposes as anti-aging, cosmetic use and athletic performance enhancement. Under the terms of the Agreement, PHARMACIA has accepted responsibility for its conduct, has instituted specific training mechanisms to prevent this conduct in the future, will pay a monetary penalty of $15 million, and will cooperate in ongoing growth hormone distribution and promotion investigations.
The Deferred Prosecution Agreement is for a term of 36 months, meaning that if PHARMACIA complies with its obligations under the agreement for its full term, the United States will not prosecute PHARMACIA in connection with the off-label promotion of Genotropin by filing the Information that is attached to the Agreement or bringing any other related charges.
"It is important for the public to recognize that growth hormone has not been shown to be safe and effective for anti-aging, cosmetic or athletic uses, and it must not be promoted for such uses," remarked U.S. Attorney Sullivan. Sullivan noted that Pfizer, which acquired PHARMACIA in April 2003, acted responsibly when it self-disclosed to various federal government agencies, in May 2003, PHARMACIA's unlawful promotion of human growth hormone.
The case was investigated by the U.S. Attorney's Office for the District of Massachusetts, the Department of Health & Human Services, Office of the Inspector General, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Jeremy Sternberg and Susan Winkler of Sullivan's Health Care Fraud Unit. Also assisting in this matter was Auditor Patrick Hegarty of the U.S. Attorney's Office.
THE FOLLOWING IS A CAREFULLY CRAFTED PRESS RELEASE FROM PFIZER.
April 02, 2007 01:38 PM Eastern Daylight Time
Pharmacia Subsidiaries Reach $34.7 Million Settlement with DOJ;
Resolve Allegations of Improper Activities Prior to
Acquisition by Pfizer
Pfizer Discovered and Promptly Reported Subsidiary’s Off-Label Marketing of Genotropin to Justice Department, Other Agencies
NEW YORK--(BUSINESS WIRE)--Pfizer announced today that two subsidiaries of Pharmacia have reached separate settlements with the United States Department of Justice to address charges stemming from the off-label marketing of Genotropin — a human growth hormone medicine — and the inappropriate use of a vendor contract to increase the sales of other Pharmacia medicines. Both settlements cover activities that occurred at Pharmacia before that company was acquired by Pfizer in 2003. The subsidiaries have agreed to pay fines totaling $34.7 million.
One subsidiary — Pharmacia & Upjohn Company Inc. — will plead guilty to a single count of offering to an outside vendor remuneration in the form of an award of a contract to manage a Genotropin patient assistance program as an inducement for recommending the purchase of Pharmacia medicines. The contract was awarded in 2000. The subsidiary, which has no operational role in Pfizer today, was assessed a fine of $19.7 million and will be disqualified from participation in government healthcare programs. The disqualification will have no impact on current or future Pfizer medicines approved for use in the United States and will not affect the continued marketing of Genotropin.
A second Pharmacia subsidiary — Pharmacia & Upjohn Company LLC — has entered into a Deferred Prosecution Agreement with the Department of Justice (DOJ) that includes a fine of $15 million to address the improper promotion of Genotropin, which Pfizer discovered and self-reported to the Department of Justice, the FDA and the Office of the Inspector General within the first month following completion of the Pharmacia acquisition. Under the agreement, no criminal charges will be filed against Pharmacia in return for compliance with the terms of the agreement.
“As the Department of Justice has acknowledged, Pfizer voluntarily and fully self-disclosed the off-label promotion of Genotropin by a Pharmacia subsidiary before Pharmacia was acquired by Pfizer,” said Allen Waxman, senior vice president and general counsel. “Pfizer’s marketing and promotion practices are not involved in the settlement. The company has internal controls to guard against these types of practices.”
As detailed in the settlement agreement, the subsidiary improperly promoted Genotropin between January, 2000 and March, 2003 for anti-aging purposes, improved athletic performance, and enhanced appearance. The settlement does not allege that patients suffered any adverse health effects from those off-label uses. Genotropin is FDA-approved for the treatment of children with hormone-related growth failure, pediatric patients with Prader-Willi Syndrome, and adults with growth hormone deficiency.
The two settlements resolve the Department of Justice investigation of these matters.
Two owners of MedXLife, a prescription drug website now linked to Signatue Pharmacy, have pleaded guilty to felony third-degree diversion of prescription medications and prescriptions. Greg Trotta, 38, and Brian Schafler, 34 admitted they helped get steroids for customers and have agreed to testify against parties involved.
In court, Schafler said that he "put in the order" and that he spoke with customers and then had them speak with Dr. Gary Brandwein, another owner of MedXLife.com. Brandwein then signed and sent the prescriptions that were filled by Signature Pharmacy before being sent to the ‘patient.’ This was all done without any ‘patient’ every meeting any doctor in person. Often the customers would not even be in the same state.
MedXLife.com was the second largest supplier of customers to Signature Pharmacy, one of the pharmacies raided in Orlando, Florida at the center of the steroid and
internet hGH distribution scandal originating in Albany, New York. MedXLife.com is/was a website thatpredominately focused on anti-aging, but right on the front page was a section entitled “Performance Enhancement” with a picture of a muscular man rock-climbing.
It’s a very slick website, with pictures of a sterile facility and all sorts of seals and assurances that everything was legal and top quality. It’s strange to think that any internet site, or clinic for that matter could be so blatantly fraudulent, and in doing so potentially convince people that what they were doing was legal and legitimate. Who knows what happens when you speak to a MedXLife Doctor, but browsing that site make one feel
like anything they did through it would be perfectly legal and moral. This isn’t to make excuses for the people purchasing human growth hormone or steroids, but the idea that this site is soimbued with professionalism and legitimacy but was completely fraudulent is a scary one.
From the MedXLife Website:
MEDX Life is a U.S. based company, with a full team of certified U.S. physicians, counselors, and support staff. Our MEDX Life team continues to adhere to the highest medical standards and up to date protocols for all of your anti-aging requirements. All products are strictly packaged and shipped from a certified U.S. pharmacy.
MedXLife.com used an affiliate program (wherein MedXLife would pay anyone a commission if they referred a sale) and purchased traffic from yahoo and other companies. Only three years old, MedXLife was doing $5 million in business a year.
Serono Reaches Lawsuit Agreement By THERESA AGOVINO 02.16.07
EMD Serono Inc. agreed to pay $24 million to settle a civil lawsuit that alleged it promoted the company's AIDS drug Serostim for unapproved uses.
Earlier this week, the U.S. District Court in Massachusetts granted preliminary approval of the settlement, which would reimburse health plans, health insurance providers and individuals who paid for the drug.
Serostim treats AIDS wasting, a condition involving serious weight loss in AIDS patients.
This week's agreement follows a settlement Serono reached in 2005 with the U.S. Department of Justice to pay $704 million in fines for unlawfully promoting Serostim.
The lawsuit, filed in 2005, accused Serono of promoting an unapproved medical device to improperly diagnose patients with AIDS wasting. The suit also alleged Serono provided doctors with travel stipends to prescribe the drug and that it marketed the drug for uses that were not approved by the U.S. Food and Drug Administration.
"The company felt it was prudent to settle the class action lawsuits and put the matter behind it to focus and devote its energies on the core mission of developing treatments for unmet medical needs," Serono said in a statement.
The DOJ settlement had reimbursed government programs for their Serostim payments but didn't include reimbursement for patients and private health plans, according to a statement by AFSCME District Council 37 Health and Security Plan, which provides health benefits to 120,000 New York City employees and retirees.
Rosaira Esperon, administrator for the union plan that was one of the original plaintiffs in the suit, said in a statement that Serono's promotion of Serostim affected some of the organization's most vulnerable members, leading them to use money for an unnecessary drug. She said the settlement brings the plan and its members a fair measure of justice.
EMD is the U.S. affiliate of Merck Serono, which is a division of Merck KGaA, the German drugmaker. Germany's Merck purchased Serono SA of Switzerland earlier this year. It has no relation to Merck & Co., which is based in New Jersey.Associated Press
Pfizer in Plea Negotiations to Resolve Growth Hormone Criminal Probe 21 Corporate Crime Reporter 10, February 27, 2007
Pfizer Inc. is in active negotiations with federal prosecutors to resolve an ongoing criminal probe into alleged unlawful marketing of human growth hormone.
Former Pfizer Vice President Peter Rost told Corporate Crime Reporter that the negotiations were ongoing “right now."
A federal law makes it a crime to distribute humane growth hormone for off-label purposes.
Rost has alleged that Pfizer’s growth hormone Genetropin, while intended to be used for short children with hormone deficiencies, was also marketed to aging patients to stop aging.
Rost has testified before a federal grand jury in Boston on the matter.
Pfizer is being represented by Covington & Burling’s Ethan Posner. Posner did not return calls seeking comment.
He said he would not name the company he has signed on with because he fears Pfizer will retaliate against the company.
Rost said that he is also negotiating a film feature with the big studios, including Sony Pictures, “but those big guys want closure before they sign on the dotted line.”
Closure?
“Me killed by a bus with PhRMA painted on the side would apparently work,” he wrote on his last blog posting.
Rost said for filmmaking purposes, he’s lucky to have the adversaries he has – CEO Jeff Kindler who has threatened plaintiffs with hardball tactics and defense attorney Ron Green of Epstein, Becker & Green.
Rost has a wrongful termination lawsuit pending against Pfizer. Green represents Pfizer in that matter.
Rost said that Kindler is scheduled to be deposed in that case soon.
“Ron Green is a legal warrior with a well developed flair for drama and an attitude that probably only someone like Anthony Hopkins or Jack Nicholson could replicate on the silver screen,” Rost said.
American Pharmaceutical Group and former doctortied to steroid and GH scheme
Friday, February 23, 2007
By ERIC TUCKER Associated Press
The owner of a New Jersey pharmaceutical company and two doctors from New York were charged in an alleged scheme to illegally prescribe anabolic steroids and human growth hormone to bodybuilders in several states, the U.S. Attorney's Office in Rhode Island said Thursday. Daniel McGlone, 54, owner of American Pharmaceutical Group, and Ana Maria Santi, a former doctor already stripped of her license to practice medicine, were charged in an 80-count indictment issued Wednesday by a federal grand jury in Providence, R.I.. Victor Mariani, a licensed physician with a practice in New York City, was charged separately and has agreed to plead guilty, prosecutors said.
McGlone and Santi face charges of health care fraud, conspiracy and illegal drug distribution. McGlone of North Brunswick faces an additional 51 counts of money laundering. Prosecutors say McGlone obtained $860,810 through the alleged scheme, which ran between April 2004 and August 2006.
Bob Mann, an attorney for McGlone, said Thursday he was still reviewing the indictment.
We'll address the issues in court, he said, adding that his client planned to plead not guilty to the charges.
Attorneys for Santi and Mariani did not immediately return phone calls seeking comment.
The use or distribution of human growth hormone is restricted under federal law to specified medical uses, such as wasting disease associated with AIDS. It is not approved for bodybuilding or weight-loss treatments.
Prosecutors say McGlone advertised steroids and human growth hormone in publications geared toward body builders. When customers contacted him, he advised them what substances they could use for bodybuilding, weight-loss and anti-aging purposes, the indictment alleges.
After receiving orders from customers, prosecutors say, McGlone paid Santi and Mariani to write the prescriptions, even though they never met or examined the patients.
New York State revoked Santi's medical license in 1999, and she allegedly forged the signature of a retired doctor who was living in a California nursing home on the prescriptions, according to the indictment.
The indictment says McGlone forwarded the prescriptions to various large pharmacies, which distributed the steroids to customers in Rhode Island and other states. It says he received money either from the pharmacy or his customers, and then paid the doctors out of his profit.
Mariani was arraigned Wednesday in U.S. District Court in Providence and was released on unsecured bond pending a court hearing next month. He has agreed to plead guilty to conspiracy and illegal drug distribution charges, the U.S. attorney's office said.
Federal agents arrested McGlone at his home in New Jersey, and Santi is currently in state custody in New York on unrelated charges, prosecutors said.
” Boston, MA… A Hewlit, New York man was charged today in federal court with offering kickbacks to three New York City doctors by offering them an all expenses paid trip to attend a medical conference in Cannes, France in April of 1999, in return for writing prescriptions of Serostim, a brand of recombinant human growth hormone used to treat wasting in AIDS patients, manufactured and sold by Serono Laboratories, Inc., now known as Serono, Inc., a subsidiary of Ares-Serono, S.A. United States Attorney Michael J. Sullivan; Peter D. Keisler, Assistant Attorney General of the U.S. Department of Justice’s Civil Division; Kenneth W. Kaiser, Special Agent in Charge of the Federal Bureau of Investigation in New England; Kim A. Rice, Special Agent in Charge of the Metro-Washington Field Office of the U.S. Food and Drug Administration’s Office of Criminal Investigations; Joseph C. Moraski, Special Agent in Charge of the Boston Regional Office of Investigations for the Department of Health and Human Services’ Office of Inspector General; James M. Benages, Regional Director of the U.S. Department of Labor’s Employee Benefits Security Administration; and Joseph Finn, Special Agent in Charge of the Boston Field office of the U.S. Postal Service’s Office of Inspector General, announced today that ADAM STUPAK, age 40, of 1334 Club Drive, Hewlit, New York, was charged in an Information with three counts of Offering to Pay Illegal Remunerations…”
SEROSTIM FRAUD RINGS Several states have busted large Serostim fraud rings. Serostim is a growth hormone used in the treatment of AIDS related wasting disease. It is also used by body builders to bulk up their muscle mass. Medicaid programs typically pay $6,000-$7,000 for a one-month supply of Serostim. The street value of these drugs is at least $3,000. Dealers use various methods to get Medicaid to pay for drugs that are resold to body builders.
The losses to these frauds are enormous. For example, in March 2003, Albany County Court in New York sentenced a former hospital employee to prison for forging $1.7 million of Serostim claims. In California, 9 people were indicted in a $3.5 millon Medi-Cal scam. These represent just a fraction of total Serostim fraud.
Growth hormones are so popular among body builders, that fraud is bound to spread across the country. As Medicaid programs crack down on the availability of Serostim and other growth hormones, the fraud will move to plans that don’t have strong controls. We’ll see Serostim fraud spreading to smaller states and HMOs that have fewer protections against Serostim fraud. Growth hormone dealers will find loopholes in the prior authorization requirements that allow them to get the drugs approved for payment.
Spending on growth hormones other than Serostim will increase rapidly. The FDA just approved use of growth hormones for short stature youth who don’t have growth hormone deficiency. The result will be fast growth in spending on growth hormones. It will become more difficult to determine how much of the spending growth is due to fraud and how much is due to questionable medicine that is legal.
Counterfeit Drugs
In July 2003, the FDA announced a new initiative to fight drug counterfeiting. The initiative is a response to growing awareness that counterfeit drugs are entering mainstream drug supplies. Although people should not be surprised to find that cheap drugs bought over the Internet may be fakes, it is shocking to find that drugs bought from your local pharmacist are phony. As a payer, you should be concerned that you may be paying for drugs that harm your members, and you should be aware that counterfeiting is an indicator that there is a secondary market for a drug.
Counterfeit drugs are entering the system through wholesalers. Many local pharmacists have been duped into buying counterfeit drugs, which they then sell to their customers. Like other frauds, counterfeiting is difficult to detect and difficult to measure. Counterfeiting is an international problem. The World Health Organization estimates that 10% of pharmaceuticals worldwide are counterfeit, with counterfeit drugs in some countries accounting for up to 50% of pharmaceuticals manufactured.
The fact that a drug is being counterfeited indicates that there is money to be made through diversion of the same drug. Counterfeit Lipitor, Serostim and Procrit have been found in the United States. I expect diversion of these drugs to be at least as popular as counterfeiting.
Counterfeiting may be a substitute for diversion or an assistant to diversion. For example, wholesalers have sold counterfeit Lipitor to pharmacies. The wholesaler is unscrupulous and will buy as much Lipitor as they can at the lowest possible price. The lowest price will come from counterfeiting or diversion. See Lipitor Fraud and Waste
Counterfeit Serostim contained no active ingredient. The highest profit for a crooked pharmacist comes from selling counterfeit Serostim to the legitimate patient and selling the real thing to a street dealer. You may pay for a patient with AIDS wasting to receive Serostim, but the pharmacist dispenses the counterfeit drug, and sells the real drug to a street dealer. The same thing could happen with other counterfeit drugs.
During a casual review of pharmacy expenditures, we noticed that our client spent far more on growth hormones than we expected. Growth hormones should be prescribed for growth hormone deficiency or AIDS wasting that has not been responsive to steroids. Neither of these legitimate uses would account for the volume of growth hormones dispensed to this client’s beneficiaries.
By linking physician and pharmacy claims, we determined that $2.5 million of growth hormones were for patients who did not have any physician claims indicating they had HIV. The pharmacy claims indicated that the drugs were prescribed by just a handful of physicians. These physicians had not submitted any claims for the patients who received the drugs.
Subsequent investigations by the client determined that fraud had occurred. The client prosecuted the cases and implemented enhanced controls to prevent further fraud.
Last updated April 25, 2007 11:14 p.m. PT
Supplement maker, dealer told to stop
Biomed Comm vows to fight to sell homeopathic remedies
The owner of Biomed Comm, a Seattle-based dealer in natural supplements sold online and in stores worldwide, has been accused of illegally manufacturing and selling drugs and engaging in the unlicensed practice of medicine.
The state Board of Pharmacy on Wednesday sanctioned Barbara Brewitt, owner of Biomed Comm, for manufacturing and selling homeopathic products containing substances such as human growth hormone and insulin -- including a kind of chocolate called "Cocoa Bliss Bears" with human growth hormone marketed as a relief for menopause.
"We're not aware of any evidence of harm, but we're not going to wait for such evidence," said Lisa Salmi, acting executive director for the board. "Biomed Comm did not have appropriate safeguards in place to manufacture drugs safely ... these are drugs."
They ordered her to stop selling drugs, but Brewitt contends what her business provides are not drugs and are not subject to regulation by the state pharmacy board or the Department of Health.
"I do not believe that the state has the authority or the expertise to understand or regulate complementary medicine," she said. Her firm deals in homeopathic remedies -- highly diluted substances made according to the theory that water exposed to active drugs or other therapeutic substances retains a healing "memory" no matter how diluted the solution.
On the Biomed Web page, products such as Endurance Plus for men are still advertised and sold over the Internet.
Brewitt, who said she continues to sell her products but no longer manufactures them, denies the board's allegation that she misrepresented herself as a physician in order to obtain human growth hormone and other substances to make the remedies.
In 1989, Brewitt received a doctorate in biology from the University of Washington School of Medicine. She describes the basis of Biomed as a combination of her interests in molecular biology, "bioelectric medicine" and homeopathy. The company's signature approach to therapy is trademarked as a "Cell Signal Enhancer."
Brewitt said she has retained an attorney and intends to challenge the state's authority to regulate her products. Biomed Comm has been a licensed business in Washington since 1996 and, apparently, did not run afoul of state regulators until Brewitt applied for a license to manufacture her products.
"We had a manufacturing plant that we were trying to get up and working in Woodinville when they shut us down," Brewitt said. A Biomed competitor bought out her previous manufacturer, based in Nevada, she said. So Brewitt applied to the state health department to begin making their own products here.
"I have been faithful trying to dialogue with (state officials)," she said.
Donn Moyer, spokesman for the health department, acknowledged that the agency had no knowledge of Biomed's practices before Brewitt's application. But once investigators started looking into the firm, Moyer said, they discovered Brewitt engaging in many violations of the law governing drug manufacture and the practice of medicine.
"We learned from her employees that she had been manufacturing these drug products for as long as 10 years, selling them worldwide on the Internet as well as locally at places like Walgreens, Costco and General Nutrition Centers," he said.
A cease-and-desist order was issued by the board last year, Moyer said, prior to the board's final ruling issued Thursday.
He said investigators will look into whether Biomed's continual sales of products constitutes a violation of that order.
Brewitt, in any case, intends to fight the state on this one. She said she has formed a legal defense fund and joined with other organizations that believe many state and federal regulatory agencies are structured to favor traditional medicine and squelch any form of alternative medical practices.
ENDURANCE PLUS
Endurance Plus is advertised as a product for men who want more energy. It is said to contain recombinant insulin such as growth factor 1 -- "An ingredient not taken from human or animal extracts but rather synthetically produced from a perfect human blueprint, sugars, phosphates and proteins using good manufacturing practices."
Los Angeles Times - February 16, 2003 Tim Reiterman, Times Staff Writer
SACRAMENTO -- California's health program for the poor has exercised slack control over reimbursements for a costly AIDS drug, enabling a black market to thrive among bodybuilders and others with no medical need for it.
In the last four years, Medi-Cal has spent about $175 million on the human growth hormone Serostim, which fights wasting in people with AIDS and costs as much as $7,000 a month per patient. Last year, the state spent more on the drug than New York, Florida and Texas combined.
But some of the supply was never used by AIDS patients. Instead, it was diverted into an underground market that flourished at gyms from San Diego to San Francisco. Doctors without AIDS expertise gave prescriptions to patients who did not require them. Forgers wrote bogus prescriptions. And some patients with AIDS sold their medicine instead of using it.
State officials defend Medi-Cal expenditures for Serostim, which can improve an AIDS patient's quality of life. But they acknowledge that myriad abuses have cost taxpayers tens of millions of dollars.
California's rules governing reimbursement for Serostim remain more lenient than those in other states with large numbers of people with AIDS. Three-month supplies are available with only a doctor's prescription and no state review, as is typically required elsewhere. Medi-Cal keeps a tighter grip on nutritional supplements and some other prescriptions costing a fraction as much as Serostim.
State Health Services Director Diana M. Bonta said the department has gradually tightened regulations and reduced costs while delivering an expensive, federally approved drug to eligible Medi-Cal recipients. She said, "You learn from the abuse," deciding on the balancing of restrictions versus need.
Serostim is the first biotechnology-derived drug approved by the Food and Drug Administration for AIDS wasting, which causes the body to consume organ and muscle tissue. But there is debate about its price and whether steroids that cost far less are as effective.
"A monthly cost of $7,000 for a drug of dubious value at a time of critical shortage of health-care dollars is scandalous," said Michael Weinstein, president of the AIDS Health Care Foundation, which provides medical care to more than 5,000 Californians. "And I would think that, at a minimum, a third of the money is going to resale,fraud, the black market."
The hormone is just one of hundreds of medicines on the state's $3-billion annual pharmacy tab, the second most rapidly growing part of the $27-billion-a-year Medi-Cal program, which now faces budget cuts.
Meanwhile, the federal government and the state attorney general are examining the marketing practices of Serono Inc., the U.S. affiliate of the Swiss firm that makes Serostim. Authorities in the state already have prosecuted fraud rings that have peddled millions of dollars' worth of Serostim. And the drug has been copied in California and elsewhere; authorities say they do not know how much counterfeit Serostim the state has paid for.
"It has a huge potential for abuse," said Dr. Eric Daar, chief of Harbor-UCLA Medical Center's HIV division. "Anabolic steroids have abuse potential," he said, because people "want to bulk up ... and Serostim has the added factor of street value."
Underground Trade Partly because of the price, Serostim is known as the Cadillac of drugs that help chisel bodies. And the underground trade operates at every level, often starting with physicians who prescribe the drug for patients who may not have AIDS, let alone be experiencing the emaciation that accompanies the advanced stages of the disease.
The Medical Board of California confirmed that it is investigating a number of doctors for allegedly writing Serostim prescriptions for people who do not have AIDS wasting. The board's enforcement staff is "well aware of the increasing number of improper prescriptions," said a spokeswoman, Candis Cohen.
A year ago, after an 11-month probe by state health investigators, nine people were indicted in San Diego County on charges of stealing more than $3.5 million from Medi-Cal.
The case began when a pharmacist caught a Medi-Cal recipient trying to fill a counterfeit Serostim prescription. Police found other prescriptions and a laptop computer in the alleged forger's SUV. Then the computer provided state health department investigators with what they describe as a diary of a statewide scam.
Serostim was being sold for discount prices at spas and gyms statewide. Authorities say the trail led to a former radiology technician who knew how to steal patients' identities and how to dupe pharmacies.
James L. Mayfield, a supervising state health investigator, said some doctors who prescribed Serostim were dermatologists and others outside the AIDS specialty.
"Doctors admitted they did not even know what Serostim was," or that a prescription costs $7,000, he said. "You could put every investigator in the state on this drug and you still could not catch all the fraud."
Dr. Peter Ruane, an HIV specialist in Beverly Hills, said one of his Medi-Cal patients was trading half of his prescription back to his pharmacist for Viagra and other drugs.
He said another patient "told me ... that he was in a room where Serostim was changing hands and there was a briefcase with $50,000 in it. It had all the marks of trading in narcotics."
Dr. Bisher Akil, an HIV specialist and former medical director of the Venice Family Clinic, said he has patients who are buying Serostim on the street. "They are using it mainly for cosmetic purposes" and as an energy booster, he said.
David Pieribone, associate director of education at AIDS Project Los Angeles, said he participated in Serostim's clinical trials and considers it a very effective drug that boosted his muscle mass and feeling of well-being.
He said he also has viewed the dark side. "I was offered this drug by people at my gym," he said. "They generally were people who got it for themselves," then stopped taking it or reduced their doses.
"They offer a two-week supply ... for $1,000," he said.
A Top Seller Since Serostim became available in 1996, it has become one of Serono's top sellers, accounting for $137 million in worldwide sales in 2000, $125 million in 2001, and $95 million last year. California's tab for Serostim grew rapidly from several million dollars in the last few months of 1996, when it was introduced, to $38.5 million in 1999, $53.5 million in 2000 and $48.6 million in 2001. The amount declined last year to $33.2 million, including pharmacy fees, which officials say indicates that tighter controls are working.
Serostim has special status in California. Under state law, federally approved AIDS and cancer medicines are automatically added to the list of drugs that Medi-Cal will pay for without pre-approval. Some patients initially received the drug for months or years without a state assessment of whether they had AIDS wasting or whether Serostim was helping.
The Medicaid programs of other big states and private insurers such as Blue Cross won't pay for Serostim prescriptions without approving them first.
The government does not keep statistics on the number of AIDS wasting cases in each state. But New York had about 57,000 AIDS patients, or 12,000 more than California at the end of 2001, according to the Centers for Disease Control and Prevention. Like California, New York was spending about $50 million a year on Serostim in 2001 and had a fraud problem. After it began requiring pre-approval a year ago, New York's bill plunged to $20.3 million -- about 40% less than California spent last year.
"This policy is getting the medication to people who need it, but is making sure it is not prescribed inappropriately," said New York Health Department spokeswoman Christine Smith.
Florida, with about 7,000 fewer AIDS patients than California, has required pre-authorization since 1997 and spent $4.2 million on Serostim last year. Officials there made the determination that, if they did not control expenditures on the drug, they would have to reduce benefits elsewhere.
"There is a small number of recipients, but a very high dollar," said George Kitchens, Florida's chief of Medicaid pharmacy services.
Texas, with about half the AIDS patients as California, spent $765,000 for Serostim last year. It limits Serostim use to three months because officials say there is no clinical evidence that longer therapy is effective.
Rules Tightened California health officials began tightening the Medi-Cal rules for Serostim reimbursement in 2001 after receiving reports of over-prescribing by doctors, counterfeiting and illicit street sales. They limited Serostim prescriptions to 12 weeks, after which pre-approval was required to extend the prescription.
Meanwhile, they began taking steps to remove Serostim from the Medi-Cal drug list. That triggered dozens of faxes and protests from Serono, patients and health providers who feared that tougher limits would limit access for deserving patients.
Dr. Wilbur Jordan, director of the Oasis Clinic at King/Drew Medical Center near Watts, says he has come to believe that fraud and prescription abuse are so pervasive, and Serostim so pricey, that pre-authorization is a necessary evil in this budgetary climate. "When you have a patient who is poor and hears that boxes are worth $4,000 on the street," he said, "some are going to sell it." He said two of his patients did.
Eventually, officials said,Medi-Cal and Serono signed a contract under which the state agreed not to remove the drug from its approved list and Serono agreed to give Medi-Cal an unspecified rebate on its purchase price. Last May, the health department notified beneficiaries that new prescriptions would require prior authorization. But officials later backed off because they said it appeared that their interim controls were driving down costs.
"We thought we brought the program under substantial control," said Stan Rosenstein, deputy director of Medical Care Services. Official knew that tougher controls "would cause an uproar in the provider community, and we knew that, unfortunately, we would be delaying the onset of treatment for a number of people."
Medi-Cal officials said they are now paying less for each Serostim prescription than other states do. But they refused to disclose the state's net cost, saying they cannot legally reveal Serono's rebates or other proprietary contract details.
To close a loophole in the current policies, Bonta said the governor's proposed budget for the next fiscal year would pay only for prescriptions written by AIDS specialists. By Medi-Cal estimates, that could save $7.5 million a year.
Firm Defends Itself A Serono spokeswoman, Carolyn Castel, said the company has done nothing improper and has not provided gifts, free samples or discounts.
Dr. Charles Farthing, medical director of the AIDS Health Care Foundation, maintains that Serostim provides little benefit, because the wasting in most patients can be reversed with standard anti-retroviral therapy alone.
But Dr Daar of Harbor-UCLA, who was involved in clinical studies for Serostim, said he is convinced that it effectively increases muscle mass and improves the quality of life and probably the survivability of wasting patients. "I think patients who do use it benefit from it," he said.
Both Farthing and Daar criticize the high cost of the drug. But Castel said the price reflects the cost of development, state-of-the-art manufacturing facilities and extraordinarily high standards necessary to safely treat patients with compromised immune systems.
As California has tightened its rules, some AIDS patients say they are unfairly suffering the consequences. "I fault the system for not having controls in place that would avoid ramifications from the black market," said Donald Nelson of San Francisco, a 57-year-old former insurance administrator who has fought to keep his Serostim. "You don't stop fraud by denying people who need the medicine."
All content on this website is opinion. No reference is made to, nor is there any intent to make any reference to any specific entity or individual as a quack or participating in quackery. Any such inference is incidental and not the objective or intent. Any newspaper articles or other media published here is the opinion of the author of the piece being reproduced here, not the producer of this website.
Do not rely on this website for your only medical advice. Before making decisions that impact upon your health, you should consult your health care provider.
