How Good Are Your Drugs? - Page 2

You just don’t know.

The Case of Cardinal Health

There are three major pharmaceutical wholesalers, Cardinal Health Inc, McKesson Corp. and AmerisourceBergen Corp. They “touch” between 80 to 90% of the prescriptions dispensed in this country. The State of New York attorney general's office subpoenaed all three major wholesalers in April of 2005.

On December 26, 2006, the Attorney General of the State of New York Medicare Fraud Control Unit and Health Care Bureau entered an agreement, in the matter of Cardinal Health Inc., an Assurance of Discontinuance to Executive Law § 63(15). Cardinal Health paid $11 million dollars, but it is the results of the findings contained in this agreement that are alarming.

In this agreement, the attorney general’s office found a pattern in which Cardinal knew or should have known that adulterated drugs had entered the system, and it did not take the steps to ensure the pharmaceuticals in the distribution chain were safe. The use of Alternative Source Vendors (ASV’s) for increased profit was cited by the attorney general’s office as well.

In the agreement, it states:
• ‘…In March 2004, Cardinal realized it possessed an anabolic steroid product that customers might perceive as high risk… It sought to avoid such customer concerns by transferring this product from its trading company, which was known for buying from ASV’s to its ‘divisions’ which customers perceived as selling pharmaceuticals purchased from manufacturers. A Cardinal employee sent an e-mail to the head of the Trading Company, noting a substantial inventory in ‘an anabolic steroid that is on the restricted list due to potential counterfeit. There is plenty of room to pass this product to the divisions. What are your thoughts on moving this product to the divisions? The reply e-mail instructed simply: ‘Go ahead and move it.’

• From May 2001 through May 2002 ‘Cardinal purchased drugs on the Secondary Market that later turned out to be counterfeit… over 10,000 units of counterfeit Procrit… Cardinal, still unaware that the product was counterfeit, sold some of the counterfeit Procrit to its customers…’

• ‘…Cardinal repeatedly sold pharmaceuticals to customers that it knew or should have known were diverting pharmaceuticals… Cardinal made numerous sales of pharmaceuticals to a Nevada company which purported to be a ‘closed door’ pharmacy that served only nursing homes. In a routine pattern, the Nevada company placed two orders at the same time. One was for products likely to be needed by the stated… nursing home residents… The other was for much higher quantities and included products unlikely to be needed by nursing home residents… Investigation has shown the company dispensed the products on the small-quantity orders to nursing home residents and it transferred the products on the large –quantity orders to an affiliated wholesaler for resale on the Secondary Market.’

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Article Author: Rick Vassar

Rick Vassar CPCU, ARM, AIS, ARM-P is a career commercial risk manager and the author of Hide! Here Comes the Insurance Guy, where he uses humor to explain insurance strategies in language everyone can understand.

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Article comments

  • 1 - gette

    Apr 26, 2007 at 11:34 am

    And when you consider how drugs are railroaded through the FDA approval process...!

  • 2 - sam

    Apr 26, 2007 at 1:15 pm

    The reason pharmacies must now keep all pseudophedrine products behind their counters is federal legislation, it has nothing to do with pharmaceutical companies. The way you wrote your post, you make it sound as though these companies have control over pharmacies. Other than supplying drugs, they have absolutely no control in how things are stored or dealt out.

  • 3 - Rick Vassar

    Apr 26, 2007 at 1:32 pm

    This article does not have to do with either the pharmaceutical manufacturers or the pharmacies.

    It's the lack of control and oversight as to where this drugs are bought and sold by wholesalers. Blurring the lines in the chain of custody allows for spoilage and adulteration to occur.

  • 4 - Ruvy in Jerusalem

    Apr 26, 2007 at 2:22 pm

    Jack,

    When dealing with the Sabbath and what may or may not be done, cutting pills apart (I have to split one of the pills I take) is considered "cutting vegetables or herbs" and therefore permitted.

    I make this point not to bore you all about the rules of the Jewish Sabbath, but to drive home the point that most, if not all, "medicines" are concentrated versions of herbs.

    Foxglove (digitalis) was used centuries ago to ease heart pain, for example.

    All of us need to know what the hell we are ingesting. Just because some guy with an M.D. on his wall says "take this" does not mean we should just go along. Just because some Madison Avenue putz hustles Bromo-Seltzer for heartburn does not mean we should would the stuff down. Bromides can be addictive.

    There are teas and infusions that can help with things like hay fever, Rick, that are a lot healthier than pseudoepinephrine, which raises your blood pressure, among other things.

    This is a well written article. But I suggest that a diet heavy in water, uncooked fruits and veggies and light in meat is a lot healthier than whatever is the common diet in America these days.

    Now to take my own advice...

    "Sweetheart? Can you please pour me a glass of water?"

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