Gilead targets 'large-scale' HIV drugs counterfeiting scheme as judge orders asset freeze

As Gilead Sciences continues its efforts to crack down on alleged fake HIV drugs across the nation, the company has scored a legal win for another recently uncovered elaborate scheme to sell counterfeit drugs. 

A federal New York judge froze the assets of the dozens of people involved in a complex counterfeit web. The two “kingpin” defendants in the case were accused of selling authentic Gilead bottles, filled with fake drugs. 

In a complaint, Gilead outlined the dangers of unintentionally consuming counterfeit drugs. People who took them would be unaware of side effects or drug-drug interactions, not to mention missing their HIV treatment.

The drugs were allegedly sold via a “large-scale, sophisticated counterfeiting conspiracy” led by “career criminals” who organized the scheme and controlled the flow of the counterfeits, Gilead's complaint reads.

The kingpins controlled counterfeit wholesale companies, which sold the fake drugs until they garnered too much attention and disappeared. The companies, known as the supplier defendants, all had different owners listed and were spread across the country, protecting the scheme from appearing connected. The suit also cited other defendants handling distribution and marketing, among other functions.

The scheme was uncovered when Gilead began receiving complaints from patients and pharmacies about bottles of Gilead HIV medications that were filled with a different drug. The company acquired several bottles and through in-house experts and outside laboratories, determined that the drugs were counterfeits and the tamper-proof seals were replicated.

The most common drug that the bottles were filled with was Seroquel XR, a former AstraZeneca anti-psychotic that's now owned by Cheplapharm in the U.S. One patient who unknowingly took the drug reportedly could not speak or walk after. Patients prescribed Seroquel are recommended to start with 50 milligrams a day, while the fake Gilead bottles contained 300-milligram tablets.

The Gilead bottles were allegedly obtained from vulnerable populations, such as homeless people who receive their HIV medicines for free and could be coerced into giving up the meds for cash.

The top kingpin, Lazaro Hernandez “worked in the shadows”, taking “extraordinary measures” to conceal his identity. Distributor defenders described him as “the guy upset about the money.” He allegedly received tens of millions of dollars in proceeds from the counterfeiting scheme. Gilead uncovered his identity by using subpoenaed phone records and public plane records, going on to subpoena records from a casino that shows he lost millions of dollars gambling. He was arrested by the FBI in June in relation to the scheme and money laundering.

Gilead sought injunctive relief in the suit, including a seizure of some defendant’s premises, aiming to “put an immediate stop” to the counterfeit sales. The company also sought monetary relief for trademark infringement. The judge agreed to the asset freeze, Reuters reports.

“Gilead will continue to work closely with the U.S. Food and Drug Administration, pharmacies and the Department of Justice to remove counterfeit and tampered medication from circulation and to prevent future distribution of counterfeit medications,” the company said in a statement. The company listed links to its authorized distributors and information on how to identify authentic Gilead products, as well as a number to call to report counterfeit Gilead medications.