Drugmaker Gilead Alleges Counterfeiting Ring Sold Its HIV Drugs

The Gilead spokesman stated that most of the counterfeit medication have been bought from homeless or drug-addicted HIV sufferers after which resold utilizing falsified documentation.

“Gilead has uncovered and stopped a fancy and prison enterprise distributing counterfeit Gilead HIV treatment by way of the reliable U.S. provide chain,” the spokesman stated.

The corporate makes use of the phrase “counterfeit” to incorporate real drugs which have faked documentation or altered packaging, in addition to faux tablets.

The U.S. pharmaceutical provide chain is taken into account among the many world’s most secure, and counterfeits mostly make their option to sufferers through on-line pharmacies or generally after being smuggled throughout the U.S.-Mexico border. However U.S. counterfeiters can generally exploit gaps within the provide chain to distribute prescribed drugs through secondary wholesale distributors, corporations that buy and resell medicines to pharmacies, typically at cheaper costs.

In December,

Johnson & Johnson

stated it was conscious of three cases by which unauthorized distributors bought bottles of its HIV drug Symtuza containing the improper tablets.

Gilead filed a lawsuit in July, which was unsealed on Tuesday, alleging that the distributors bought its HIV medication with falsified documentation and altered packaging. In a number of circumstances, the bottles contained the improper tablets, together with an over-the-counter painkiller and an antipsychotic drug as a substitute of the HIV drugs the sufferers have been prescribed, the corporate alleged. An up to date model of the criticism names dozens of defendants, together with entrepreneurs, suppliers and distributors.

The decide unsealed the case after asking Gilead final week to clarify why the case ought to stay totally sealed, saying its continued investigation wasn’t a motive for sealing. Gilead stated it didn’t object to the unsealing.

In submitting the lawsuit, Gilead has taken an under-the-radar strategy, by hiring its personal non-public investigators and dealing with federal and native legislation enforcement to execute seizures of the defendants’ places of work and warehouses, earlier than the defendants have been conscious of the case.

The corporate sought the seizures beneath the Lanham Act, a federal trademark statute that enables for plaintiffs to execute civil seizures and litigate a case beneath seal if authorized by a decide.

Such seizures, which defendants aren’t conscious of upfront, could be a faster manner of getting merchandise off the market than by way of criminal-law channels, stated Randy Gaw, who has represented wholesalers in Lanham Act circumstances however isn’t concerned within the Gilead dispute.

“It additionally provides the corporate extra management over the method itself,” stated Mr. Gaw. “When the proof is seized by the federal government, it’s within the property of the federal government and never shared with the corporate.”

On account of the litigation, Gilead has performed court-permitted seizures at warehouses and places of work spanning 17 areas and 9 states, the Gilead spokesman stated.

Gilead has requested a decide to award damages and to bar the defendants from promoting its drugs, “whether or not real or counterfeit.” Its claims embody violations of trademark legal guidelines and that some defendants took half in a racketeering conspiracy.

Gilead’s allegations pertain primarily to 2 of its HIV remedies, Biktarvy and Descovy, the latter of which can also be used to stop HIV an infection. The medication are projected to have had $10.2 billion in mixed gross sales final yr. Descovy and Biktarvy arrive at pharmacies in sealed bottles, so pharmacists don’t have any function in filling the containers.

A 2013 legislation required sellers of prescribed drugs to supply patrons with a transaction historical past doc referred to as a pedigree, which particulars every earlier vendor and purchaser within the provide chain. The legislation was an effort to crack down on the observe of diverting medicines from the regulated provide chain after which reselling them to pharmacies at discounted costs utilizing falsified pedigrees.

Within the court docket papers, Gilead stated it first turned conscious of counterfeit treatment in August 2020 after a report from White Cross Pharmacy in Brawley, Calif. That month, a buyer referred to as to inform the pharmacy {that a} bottle of Biktarvy contained the improper tablets, which turned out to be Tylenol, Shane Jerominski, White Cross’s pharmacist-in-charge, stated in an interview.

The affected person didn’t take the tablets, and the pharmacy changed the treatment with genuine Biktarvy, Mr. Jerominski stated. He stated he reported the faux tablets to Gilead.

Mr. Jerominski stated White Cross bought Biktarvy from Secure Chain Options LLC, a wholesale distributor primarily based in Maryland, as a result of it was charging a less expensive value than its major wholesaler.

“I had no manner of realizing this was faux,” Mr. Jerominski stated.

An legal professional for Secure Chain, which is a defendant within the swimsuit, stated his shoppers strongly disagree with Gilead’s allegations and that one of many firm’s founding ideas is defending the protection and integrity of the pharmaceutical provide chain. In court docket paperwork, Secure Chain accused Gilead of abusive litigation ways. The corporate additionally stated it by no means bought merchandise it was conscious have been counterfeit, and quarantined merchandise that it suspected have been counterfeit.

After Gilead decided that the faux tablets weren’t an remoted incident, it despatched an alert to all U.S. retail pharmacies warning of faux tablets distributed by Secure Chain, the Gilead spokesman stated. The March 2021 discover stated that Gilead acquired pharmacy stories of 5 cases by which sufferers returned bottles of Biktarvy or Descovy that contained overseas tablets.

In July 2021, Gilead discovered that Woody Weaver Pharmacy in Tyler, Texas, had bought bottles of Biktarvy from Scripts Wholesale Inc., court docket paperwork say. The pedigree traced the bottles from a wholesaler to approved distributor

AmerisourceBergen Corp.

, the paperwork say. However Gilead stated the pedigree was faux.

Jackie Weaver, who operates the Texas pharmacy, stated that Amerisource advised him that the pedigree was faux, and that he returned the bottles to Scripts for a refund.

Scripts, a defendant within the swimsuit, declined to remark. An Amerisource spokeswoman stated the corporate used transactional knowledge to verify that the allegedly falsified medicines had not moved by way of its amenities.

Gilead stated it was conscious of eight bottles with overseas tablets that Secure Chain bought to pharmacies. One held an over-the-counter painkiller, one other an HIV drug made by one other firm, three contained the antipsychotic drug Seroquel, and the rest contained different Gilead medication. One affected person who unknowingly took Seroquel as a substitute of their HIV tablet “couldn’t converse or stroll afterwards,” Gilead stated in a court docket submitting.

After a decide granted permission, Gilead executed seizures on July 26, 2021, when it seized greater than a thousand bottles of its drugs from Secure Chain.

In August, the company issued a public warning in a press release on its web site. “Distributors not approved by Gilead to promote Gilead-branded medication have bought these counterfeits to pharmacies the place real Gilead bottles have been tampered with a counterfeit foil induction seal or label and include incorrect tablets,” the corporate stated in a press release. It stated it was working with the U.S. Meals and Drug Administration, pharmacies and authorized authorities.

Later in August, Gilead seized greater than 17,000 bottles of Gilead-labeled medicines from wholesaler ProPharma Distribution LLC, all of which had counterfeit pedigrees and plenty of of which had counterfeit labels, Gilead says within the paperwork.

A lawyer for ProPharma, a defendant within the case, didn’t reply to a request for remark. In court docket paperwork, ProPharma stated it denied the allegations within the case.

Write to Joseph Walker at joseph.walker@wsj.com and Corinne Ramey at Corinne.Ramey@wsj.com