FDA's counterfeit drug probe sweeps up cancer doc

One of the reasons counterfeit Avastin made its way into the U.S. this year was because physician clinics, looking to boost their earnings, were willing to buy drugs whose origins should have been suspect. And the FDA is not going to just let all of them off the hook.

Dr. William R. Kincaid, 67, the principal owner of McLeod Cancer and Blood Center in Knoxville, TN, faces three years in jail and a $250,000 fine after pleading guilty to charges of "receiving misbranded drugs with intent to defraud or mislead."

According to federal authorities, Kincaid acknowledged that the practice bought $2 million in misbranded drugs from a Canadian wholesaler to save money and then charged federal health programs full price. The FDA and FBI have been tracking down the products that 155 medical practices in 33 states acquired from several companies associated with CanadaDrugs in Winnipeg, according to The Wall Street Journal.

The probe picked up urgency early this year when it was discovered that some drugs labeled as Roche's ($RHHBY) Avastin were counterfeit, containing starch and salt but no active ingredients. Medicare and insurers in 2005 cut reimbursements they paid doctors for many of the drugs they gave to cancer patients, giving physicians a motivation to look for cheaper suppliers. Among the misbranded drugs, some of them made at foreign plants not approved by the FDA, were Abraxane, Alimta, Avastin, Eloxatin, Gemzar and Rituxan.

"This conviction sends a message to all medical providers and practitioners that federal criminal penalties await those who distribute and disseminate misbranded and potentially unsafe drugs, especially those used in cancer treatment. The FDA's regulatory system is designed to protect patients from substances such as these," William C. Killian, U.S. Attorney for the Eastern District of Tennessee, said in a release.

Matthew Farber, director of provider economics and public policy for the Association of Community Cancer Centers, said he is unaware of any of the association's members being among those who have been contacted by federal authorities for buying misbranded drugs. He said the association is tracking the issue, trying to determine if there is a systemic problem tied to suppliers offering drugs from outside the regular supply chain, and also looking at legislation or new regulations that might get control of the problem.

"As far as counterfeit Avastin, we have been following this in Washington out of concern. We don't want to this to happen, where patients are not getting the proper dose or the actual drugs," Farber said. He said he liked to think of the association's members as honest and "trying hard to get the best price for the best product for their patients, but maybe I am being optimistic. If you are getting a ridiculously low price, then you have to wonder why you are getting this really great deal."

- read the press release
- here's the plea agreement
- get more from The Wall Street Journal (sub. req.)