Company convicted in gray market distribution scheme

The gray market for drugs has been getting a lot more attention lately thanks to the congressional report on wholesalers taking advantage of it to scarce sell drugs at exorbitant prices. The gray market also was responsible for the counterfeit Avastin found this year in the U.S. And sometimes wholesalers actually buy stolen drugs and put them back into the supply chain, putting patients at risk.

That is what happened with Altec Medical. The company has been sentenced to pay a $2 million fine and forfeit $1 million after it was found buying $55 million worth of illegally obtained drugs, the FDA reports. Federal authorities say the Easley, SC-based company bought the prescription medications from William D. Rodriguez, who got them from parties that obtained them illegally. Rodriguez reintroduced them through wholesale drug companies he controlled. Rodriguez recently pleaded guilty to charges in connection with the scheme.

The problem is that when drugs leave the legitimate supply chain there is no way of knowing if they have been safely stored and so may pose a risk to consumers, even if they are real medications.

But Congress is focused now on the new area of the gray market that hurts consumers. A congressional report released last month found in one case that a New Jersey distributor bought some cancer drugs for $7 a vial then resold them for $600 a vial to a hospital that was having trouble getting the medication for its patients, a piece in the Huntington, WV, Herald Dispatch reports. And the fake version of a Roche ($RHHBY) drug that made it into the U.S. also had its origins in the gray market. 

- read the press release 
- the Herald Dispatch piece 

Related Articles: 
Sen. Schumer asks FTC to probe gray market mark-ups in drug
Fake of Roche's Avastin shipped from Canadian supplier

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