Gilead Identifies ‘Kingpins’ Behind HIV Drug Counterfeit Ring (Updated)
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In court documents unsealed this week, the company identified Lazaro Roberto Hernandez and Armando Herrera as the two primary individuals responsible for the sale of counterfeit or tampered drugs. Gilead Sciences claimed the two men directed the sale of the counterfeit drugs to a network across the country.
The term “counterfeit” is broad. It can refer to genuine HIV medications that have been sold with false documentation or altered packaging, sometimes acquired from patients. The term can also refer to different medications swapped out in place of the HIV medications.
The counterfeiters allegedly sold the illegitimate drugs to “gray-market distributors” with an established pharmacy customer base. Those distributors then sold the counterfeit medication to U.S. pharmacies that dispensed the medication, Gilead Sciences alleges.
According to the company, government evidence showed the counterfeiters sold 85,247 bottles of purported Gilead drug products to pharmacies over two years.
Hernandez was arrested in June for his involvement in the scheme. According to the Department of Justice, Hernandez illegally acquired large quantities of the HIV medications and created false drug labeling and other documentation to make it appear that these high-priced drugs had been obtained legitimately. He and his confederates then established wholesale distribution companies to sell these drugs at a discounted rate to other distributors, the government charged.
This week, a New York federal judge denied a motion made by the defendants to dismiss the case for lack of personal jurisdiction and improper venue. The case will be allowed to proceed in the Eastern District of New York, according to a copy of the judicial order sent to BioSpace.
Additionally, court documents unsealed this week show that Judge Ann M. Donnelly froze the assets of several individuals and entities accused of running the counterfeit scheme.
In its announcement, Gilead Sciences said it issued alerts to consumers and impacted pharmacies to make them aware of the potential for counterfeit or tampered Gilead medication sold by unauthorized Gilead distributors.
Drugs involved in the scheme included Gilead’s HIV pre-exposure prophylaxis medicines Truvada and Descovy. Additionally, some of the drugs sold under the scheme were not HIV medications but other drugs, including antipsychotics such as AstraZeneca’s Seroquel.
An Ongoing War Against Counterfeit Drugs
This week’s announcement builds on ongoing actions taken against drug counterfeiters.
In January, the company announced that thousands of bottles of Gilead-labeled medication with counterfeit supply chain documentation were seized in raids conducted by federal agents across eight states. In the same month, Gilead Sciences announced that approximately $250 million worth of counterfeit versions of HIV drugs, Biktarvy and Descovy, were sold to U.S. pharmacies over a two-year period sourced by “fly-by-night entities.”
Gilead Sciences has been waging war against counterfeiters for the past several years. In April, the company won a legal victory against a different type of counterfeit drug sales.
As BioSpace previously reported, the company secured a court order against multiple Florida-based clinics, labs and prescribers. This network recruited individuals, many of whom were homeless, to undergo an HIV screening process provided by these bad-faith clinicians.
Once they were falsely identified as having contracted the disease, the patients would apply for medications directly from Gilead Sciences through its Advancing Access program. When the medications were received, the clinics would purchase the drugs from the fraudulent patients at a reduced cost and then resell them.
Not only were the Florida clinics able to resell the Gilead Sciences drugs, but they also received fees and reimbursements from the company. The California-based company said in a legal filing that the fraudsters netted “millions of dollars in illicit gains.” Gilead Sciences stated all defendants responsible for distributing these counterfeits are currently “prohibited by court order from transacting in Gilead medicine.”
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