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How Good Are Your Drugs? (Part 3)

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Part 1 of this series revealed that there are gaps in the regulation of drug wholesalers. Prescription medications were and may still be sold as arbitrage. They can be stockpiled and warehoused to reduce supply and raise prices. The unbridled buying and selling of these medications has allowed for the infiltration of unfit, adulterated pharmaceuticals into regulated distribution chains.

Part 2 focused on the implications of a substantial part of the FDA’s budget being financed by user fees paid by the pharmaceutical industry. This could explain why the amount of time that a medication is approved has been cut in half, and the oversight of approved pharmaceuticals may not be adequate.

The Case of PIN Rx

The State of Maine Board of Pharmacy issued a license to dispense pharmaceuticals to the Penobscot Indian Nation (PIN) in early 2005. PIN Rx, a partnership between the State of Maine and the Penobscots, began dispensing mail order medications in October 2005.

PIN Rx was originally conceived to fill Maine Medicaid beneficiary prescriptions. The company soon began to realize significant losses and, as early as March 2006, began looking at “alternative ways to generate revenue.”  According to the Maine Board of Pharmacy Notice of Hearing on Complaint nos. 2006 PHA 2508, 2006 PHA 3214, and 2006 PHA 3215, PIN Rx then turned to “internet facilitation centers" (IFCs) to dispense pharmaceuticals.

According to the record, the Board alleges “…from February 1, 2006, through October 23, 2006, (265 days), PIN Rx filled and dispensed a total of approximately 183,704 orders (an average of 693 per day) for controlled substances generated by 61 different physicians for 65,211 consumers located throughout the United States pursuant to drug orders PIN Rx obtained over the Internet without a written prescription and without PIN Rx contacting the prescribing providers to obtain oral prescriptions…”

The prescriptions were dispensed by two pharmacists, Reginald Gracie Jr. and Susan Tringale. These two pharmacists are also parties to this case. As noted above, assuming a 50 hour work week for each pharmacist, each would have filled prescriptions at an average 46 prescriptions per hour.

In October 2006, Cardinal Health, one of the major U.S. pharmaceutical wholesalers, discontinued all shipments to PIN Rx due to Cardinal’s concern over the “inordinate amounts of controlled substances that PIN Rx was ordering.” Although Cardinal Health acted appropriately, it is questionable why, given previous cash flow issues followed by a sudden surge in their orders, a red flag did not appear sooner than October 2006.

In testimony on this matter before the Board of Pharmacy on May 2, 2007, Tom Gallant, director of the Eastern Maine Development Corporation (EMDC), stated “…the words that were thrown around was that Governor Baldacci, because he vetoed the Indian casinos, was trying to help the Indians get into another type of business…”

At the time PIN Rx was formed, the governor promoted the partnership as a low cost prescription alternative that would create jobs for the Indian tribe. In fact, as late as February 7, 2007, Governor Baldacci continued to endorse PIN Rx, telling WMTV News Channel 8 in Portland that PIN Rx was a successful mail order prescription program.

There were also allegations made that Trish Riley and Jude Walsh of the Governor’s Office of Health Policy and Finance knew of the problems with PIN Rx as early as May 2006.  Yet, PIN Rx was able to continue these sales until October 2006. The PIN Rx issues were not made public until February of 2007, when a local TV station reported it to members of the public and Maine State Legislature.


As you can see, the proliferation of prescription medications on the internet has led to significant opportunities for increased profit. When you add politics at the federal, state, and local levels, there is reason to fear that, at some point, the purity of all prescription pharmaceuticals will be called into question.

If a company, partnered with a state government, can access taxpayer-assisted funding to dispense pharmaceuticals without prescriptions right under the noses of state and federal regulators, and do it for more than a year, imagine what else is going on out there.

The sad part is that you and I cannot know the purity of our pharmaceuticals without testing them ourselves, since the manufacturing, sales, distribution, and regulatory systems appear to be flawed.

And that’s not our job.

Read Part 1, Part 2, and Part 4.

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