Victor Lustic Would Be Proud
“Here’s how drug diversion works: A patient fills a prescription for a medication that is worth several thousand dollars but is paid for by Medicare, Medicaid or insurance. The patient then sells it for a fraction of the list price in cash. The buyer, known as an aggregator, removes the patient information, alters the bottle and sells it to the wholesale distributor, who sells it back to the pharmacy.”
Fraud in a bottle: How Big Pharma takes on criminals who make millions off counterfeit drugs
PUBLISHED MON, DEC 11 2023
By Contessa Brewer@CONTESSABREWER & Scott Zamost@SCOTTZAMOST
Criminals make millions by counterfeiting drugs—here’s how Big Pharma fights it
KEY POINTS
- Counterfeiting lifesaving medications is a lucrative criminal enterprise, part of a $431 billion worldwide fraud, according to an estimate from the World Health Organization.
- Gilead Sciences and Johnson & Johnson sued pharmacies, wholesale pharmaceutical distributors and others over a counterfeiting operation that targeted the companies’ HIV drugs. The suits are pending.
- Criminals are targeting other lifesaving drugs, as well, and law enforcement officials say investigations are ongoing.
In Las Vegas, Lazaro Hernandez was a flamboyant, jet-setting poker player shown in televised tournaments with stacks of colorful chips. But the casually dressed gambler spotted on security cameras with wads of cash at the casino cage was hiding a secret life.
And federal investigators say he was gambling with people’s lives. Hernandez, they say, oversaw a nationwide $230 million scheme to counterfeit prescription medications, particularly lifesaving HIV drugs, in which pill bottles were altered and sold back to pharmacies at a huge discount.
Hernandez’s operation altered bottles for Biktarvy, the No. 1 prescribed drug for HIV, as well as Descovy, another HIV medication,and other pharmaceuticals, according to court records. In some cases, the records show, the pills in the bottles were swapped for Seroquel, an antipsychotic drug.
Hernandez, based in south Florida, gambled with proceeds from the counterfeiting operation, taking private jets to Las Vegas and appearing in numerous poker tournaments, authorities say.
The drug counterfeiting scheme was part of what the World Health Organization estimates is up to $431 billion in drugs counterfeited worldwide annually. In the U.S., there were 2,121 incidents of counterfeiting in 2022, up 17% from the prior year, according to the Pharmaceutical Security Institute, which tracks industry trends.
