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Brooklyn court fines drug company $260 million for selling misbranded cancer drugs

September 27, 2017 By Rob Abruzzese, Legal Editor Brooklyn Daily Eagle

The U.S. Attorney for the Eastern District of New York Bridget M. Rohde was able to stop a drug company from ripping off cancer patients here in Brooklyn and across the country by selling them dirty and illegally packaged oncology drugs. The company will have to pay a $260 million fine. Eagle file photo by Rob Abruzzese

The U.S. Attorney for the Eastern District of New York Bridget M. Rohde was able to stop a drug company from ripping off cancer patients here in Brooklyn and across the country by selling them dirty and illegally packaged oncology drugs. The company will have to pay a $260 million fine. Eagle file photo by Rob Abruzzese

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One of the nation’s largest wholesale drug companies pled guilty in Brooklyn’s Federal Court Wednesday morning to illegally distributing misbranded drugs and for failing to register with the Food and Drug Administration. It agreed to pay a fine of $260 million.

AmerisourceBergen Specialty Group (ABSG) pled guilty to the charges in front of U.S. District Court Judge Nina Gershon.

According to court documents, two of ABSG’s Alabama-based subsidiaries, Medical Initiatives Inc. and Oncology Supply Company, prepared syringes with pre-filled and mislabeled oncology supportive care drugs. The syringes were then shipped all over the country to oncology centers to cancer patients undergoing chemotherapy. Thirty-seven of those centers are located in the Eastern District of New York, which includes Brooklyn, Queens and Long Island.

“Today’s guilty plea demonstrates our commitment to investigating and holding accountable any pharmaceutical company that fails to ensure the health and safety of the public,” said Acting U.S. Attorney Bridget M. Rohde. “This office will continue to work actively with the FDA to ensure that those responsible for America’s drug supply scrupulously comply with the law and provide safe products that doctors and patients can trust.”

According to prosecutors, to prepare the syringes, the ABSG subsidiary companies removed FDA-approved drugs from their original glass vials and then repackaged them into smaller plastic syringes and sold the excess “overfill.”

This was all allegedly done in unclean and unsterile environments that resulted in particles and foreign matter to contaminate the drugs, prosecutors said. Employees even termed these contaminants “floaters,” according to court documents.

ABSG did not register with FDA to avoid regulatory oversight. As a result, it told customers and state agencies that it was a state-regulated pharmacy and claimed they were in compliance with all state pharmacy laws. This was in an attempt to exploit a loophole provided for legitimate pharmacies, not manufacturers or re-packagers of drugs, according to prosecutors.

ABSG has agreed to pay a criminal fine of $208 million plus it will give up another $52 million in criminal forfeiture. It has also agreed with the Department of Justice’s Consumer Protection Branch to maintain a compliance and ethics program that is designed to increase accountability of corporate board members.

Rohde explained that the Department of Justice Consumer Protection Branch, the FDA Office of the Chief Counsel and the Alabama Board of Pharmacy assisted her to prosecute the drug company.

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