By The Star Staff
A federal grand jury on Wednesday filed an indictment against 25 individuals for alleged conspiracy to introduce misbranded drugs in Puerto Rico and defraud the United States.
In a separate indictment, another individual was charged with unauthorized wholesale distribution of prescription drugs. In an additional separate indictment, another individual was charged with and pleaded guilty to unauthorized wholesale distribution of prescription drugs.
According to court documents, from 2018 to the present, the defendants engaged in the unauthorized wholesale distribution of misbranded and diverted prescription drugs for financial gain. The unauthorized wholesale distribution included the sale of misbranded and diverted prescription drugs to employees and owners of local pharmacies for onward sale to pharmacy customers, without the customers knowing that the products were misbranded and diverted.
Diversion refers to the processes by which prescription drugs are taken out of the legitimate distribution channel and then reintroduced into it. Once a prescription drug is diverted outside of regulated distribution channels, it becomes difficult, if not impossible, for regulators such as the U.S. Food and Drug Administration, law enforcement, or end users to know whether the drug package actually contains the correct drug or the correct dosage.
A drug is considered misbranded under the Federal Food, Drug, and Cosmetic Act if its labeling: 1) lacks “adequate directions for use” or 2) does not contain “adequate warnings against use under pathological conditions or by children where its use might be hazardous to health, or against unsafe doses or methods or duration of administration or application, in such manner or mode as is necessary for the protection of users.”
Additionally, a drug is misbranded if it is a prescription drug and was dispensed without a valid written or oral order from a licensed practitioner.
The defendants are alleged to have purchased and sold prescription drugs in resealable plastic bags without proper labels, markings, lot numbers, expiration dates or instructions as required by law, creating a significant risk of harm. The prescription drugs were often stored in personal residences and/or transported via U.S. mail. The co-conspirators and other participants in the scheme unlawfully generated revenue in excess of $13 million through the sale and distribution of misbranded and diverted prescription drugs.
In addition to the unauthorized wholesale distribution of prescription drugs, 11 pharmacy owners and employees of five separate pharmacies were also charged with conspiracy to commit health care fraud.
These defendants caused materially false and fraudulent claims to be submitted to health care benefit plans, representing that the products sold to customers were authentic and obtained through authorized pharmaceutical distribution channels. By selling diverted prescription drugs and billing health care benefit plans for authentic drugs, these defendants financially enriched the pharmacy owners and defrauded both the health care benefit plans and the pharmacies’ unsuspecting retail customers.
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