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FDA alleges 3 made millions off scam wholesaler

Drugs bought off street, repackaged, given fake pedigrees
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Drugmakers and the FDA are scrambling to discover and foil all the ways drugs may get diverted and then funneled back into the legitimate U.S. supply chain. Sometimes drugs are stolen. Sometimes drugs that are manufactured for other countries and not approved in the U.S. have shown up being sold directly to physician practices. Now federal authorities say they have broken up a sophisticated $60 million operation involving drugs bought off street dealers, repackaged and then resold to pharmacies through a sham wholesale operation.

According to the U.S. Attorney's Office for the Middle District of Tennessee, federal indictments have been handed up for Charles Edwards, 51; Brenda Edwards, 42; and Jerrod Smith, 43; who ran the scam for three years, the office alleged. The three, all from the Houston area, were charged with buying drugs from dealers in New York and Miami, who in turn were getting them from people with legitimate prescriptions. The three set up Cumberland Distribution, which had offices in the Houston area and warehouses in Nashville, TN. The drugs were shipped to Nashville, where they were repackaged, prepared with fake pedigrees and then sold to pharmacies. Authorities allege that they netted about $14 million off the operation, which was stopped in 2009 although the indictments were revealed this month.

The danger when drugs are diverted is that there is no way of knowing if they have been stored properly or if they have expired and so become unsafe or ineffective. "The FDA Office of Criminal Investigations, along with our law enforcement and regulatory partners work diligently to preserve the integrity of the pharmaceutical supply chain," and protect the public, said FDA Special Agent David W. Bourne.

The FDA and law enforcement agents last year brought down a similar operation out of South Carolina through Altec Medical. Federal authorities say that operation sold about $55 million worth of drugs that had been diverted, then repackaged and given fake pedigrees.

- here's the press release

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