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by The Law Offices of Jason S. Coomer, PLLC

Adulterated Drugs from Overseas Are Becoming a Significant Issue as Pharmaceutical Supply Chains Expand to Foreign Manufacturers of Active Pharmaceutical Ingredients (APIs), Pharmaceutical Excipients, and Pharmaceutical Intermediates by Pharmaceutical Drug Safety Lawyer, Contaminated Drug Lawyer, Adulterated Drug Lawyer, Drug Calibration Fraud Lawyer, and Pharmaceutical Quality Assurance Whistleblower Lawyer Jason S. Coomer

Adulterated Drug whistleblowers and Contaminated Pharmaceutical whistleblowers including Pharmaceutical Quality Assurance Whistleblowers, Drug Calibration Whistleblowers, and other Pharmaceutical Drug Safety Whistleblowers are needed to step forward to blow the whistle on adulterated drugs that threaten the health and safety of the people taking medications.  Because of the serious potential danger to the public that can be caused by giving contaminated drugs or improperly calibrated drugs to men, women, and children, it is vitally important that whistleblowers help make sure that drugs are properly calibrated, proper drug ingredients are used in making the drugs, and no contaminants are in the drugs. 

If you are a pharmaceutical quality assurance manager, drug calibration specialist, or other pharmaceutical safety or quality control specialist that is aware of adulterated drug fraud, pharmaceutical supply chain fraud, defective APIs, contaminated pharmaceutical excipients, adulterated pharmaceutical intermediates,  illegal drug kickbacks, or other pharmaceutical manufacturing fraud, feel free to contact Adulterated Drug Lawyer, Drug Calibration Lawyer, and Contaminated Drug Ingredient Whistleblower Lawyer Jason Coomer via e-mail message or our submission form about a potential pharmaceutical quality control whistleblower lawsuit, drug calibration whistleblower lawsuit, or other pharmaceutical drug safety whistleblower lawsuit. 

Pharmaceutical World Sales Increase to Over $880 Billion Per Year Including Large Sales Increases in the "Pharmering Countries"

Every year over $4.1 trillion (US dollars) is spent worldwide on health services including approximately $850 billion (US dollars) that is spent in the pharmaceutical market on drugs and medications.  In 2011, it is estimated that global pharmaceutical sales are expected to grow by 5% to 7% to around $880 billion.  This growth in sales is led by the 17 so-called "pharmerging countries," which include China, Brazil, Russia, India, Venezuela, Poland and the Ukraine.  These "pharmerging countries", are forecast to see their pharmaceutical spending grow at a 15% to 17% rate in 2011, to between $170 billion and $180 billion overall.

Eight pharmerging countries are amongst the top 20 world pharmaceutical markets, and China is one of the “top three” or will be in the near future.  A few high-profile pharmaceutical companies have been successful in gaining a foothold in these pharmering countries.  These footholds include Abbott’s acquisition of Piramal Healthcare in India — a deal that could potentially make the US giant the top player in this country.  Bayer's and Novartis' investments in China including Novartis'  commitment to invest $1 billion USD in R&D in China and its $125 million USD investment to buy 85 percent stake in a privately held vaccine company.  Pfizer has made inroads into the Russian health care system with a discount-card system in Russia  Sanofi Aventis has purchased Medley, Brazil’s third-largest pharmaceutical company.  GSK and Lilly have also announced anticipated doubling their revenue in emerging markets by 2015.

It is estimated that approximately 10 to 25% of public health care procurement spending including drug contracts, medicines, pharmaceuticals, medical equipment, and medical devices is lost to corrupt and fraudulent acts including adulterated drugs.  As such, there is an international movement to reward pharmaceutical professionals and health care professionals that expose fraudulent and corrupt practices that cost hundreds of billions of dollars and cost lives.  This international movement includes SEC Foreign Corrupt Practices Act Whistleblower Reward Lawsuits and traditional Qui Tam False Claims Act Whistleblower Reward Lawsuits.  

Increased Competition and Expansion in the Pharmaceutical Industry Creates Opportunity for Increased Corruption in Pharmaceutical Procement  and Expands the Opportunity for Fraud in Pharmaceutical Drug Supply Chains that can create Dangerous Adulterated Drugs

Through globalization of international trade, there has been a shift in many international manufacturing supply chains.  As such, raw material supplies for pharmaceuticals, medical supplies, and medical equipment that have traditionally come from the United States and Europe are now coming from China and India.  This manufacturing shift has created an environment where adulterated ingredients to pharmaceuticals, medical supplies, and medical devices may be used in the manufacturing of these important products and can create dangerous and defective drugs, medical supplies, and medical devices.  International Whistleblowers along the pharmaceutical supply chain are needed to blow the whistle on adulterated pharmaceutical ingredients that are being put into medicine, drugs, medical supplies, and medical devices. 

Included in this globalization of the pharmaceutical industry is a shift in many international pharmaceutical manufacturing supply chains where raw material supplies for pharmaceuticals, medical supplies, and medical equipment that were traditionally from the United States and Europe are now produced in from China and India as well as other emerging countries.  This manufacturing shift create has created an environment where adulterated ingredients to pharmaceuticals, medical supplies, and medical devices may be used in the manufacturing of these products and can create dangerous and defective drugs, medical supplies, and medical devices being purchased by governments and given to patients. 

In the fiercely competitive medical device, medical supply, and pharmaceutical markets, there are strong economic incentives to search for the cheapest ingredients and methods to produce products.  Often these cheaper ingredients and manufacturing locations are in countries where standards and regulations are less stringent and corruption is more common.  When large corporations set up subsidiaries and joint venture partners in these countries, good manufacturing practices can often suffer, fraudulent actors can cut corners to reduce costs, and cheaper sometimes toxic materials can be added to the products.

Example of this scenario include the Baxter Heparin Recall in 2008 where Baxter, a US pharmaceutical firm which manufactures approximately 50% of the US heparin products, voluntarily recalled its heparin due to nearly 350 reported adverse events, including 19 deaths. In investigating this case, the USFDA revealed that the recalled heparin products contained a contaminated API. The tainted API, imported from Changzhou SPL China, contained a heparin-like contaminant that was structurally similar to heparin and not recognized in the solution until the FDA developed special testing for it. In March 2008, the FDA announced that they had identified the contaminant to be an altered form of an oversulfated chondroitin sulfate which is not a natural byproduct of the heparin manufacturing process. In April 2008, the US government held hearings and determined the cause to be non-sterile equipment, lack of following proper procedures, and lack of expertise.

Further, supply chains that are bigger and more complex present more opportunities for fraud.  As such, when a large corporation has a supply chain with several international subsidiaries and joint venture partners throughout the world, there are numerous opportunities along the supply chain for fraud to occur including supplier fraud, purchase order fraud, good manufacturing practices fraud, inventory fraud, documentation fraud, export fraud, import fraud, and other pharmaceutical fraud.

International Pharmaceutical Supply Chains Include Active Pharmaceutical Ingredient (API) Manufacturers, Pharmaceutical Intermediate Manufacturers, and Pharmaceutical Excipient Manufacturers All of Which Can Cause Adulterated and Dangerous Pharmaceuticals if Pharmaceutical Supply Chain Fraud Occurs

Pharmaceutical suppliers of raw materials to the pharmaceutical industry include suppliers of active pharmaceutical ingredients (APIs), intermediates, and excipients.   It is the United States Food and Drug Administration's expectation that current good manufacturing practices (CGMP) be used for the manufacturing, processing, packing, or holding (i.e., storage) of active pharmaceutical ingredients (APIs), intermediates, and excipients.  Further, the FDA recommends that laboratory controls should include the establishment of scientifically sound and appropriate specifications, standards, sampling plans, and test procedures to ensure that raw materials, intermediates, APIs, and containers conform to established standards of quality and purity.

Typically, pharmaceutical manufacturing occurs in two general steps. First, firms convert raw materials into APIs. Then, firms create final formulations by mixing APIs and excipients (other non-active ingredients), pressing the mixture into tablets, or filling capsules or preparing solutions, and then packaging the product for the consumer market.

Traditional West European and North American API Manufactures have been Replaced by Indian API Manufacturers and Chinese API Manufacturers

The active pharmaceutical ingredient (API) market is very competitive with many producers with many API manufacturers specializing and targeting their manufacturing based on joint venture contracts, large pharmaceutical company demand, governmental procurement contracts, regional resources and availability of supplies, and other logistical and profit driven factors. Driven by profits and lower costs, API manufacturing has slowly been shifting from the historical leaders in Western countries to newer firms in India and China.  APIs constitute a significant portion of the total cost for a drug. For example, approximately 40-50% of the cost of goods sold for generic oral solids comes from APIs.

The overall API market was valued at $101.08 billion in 2010, and is expected to grow at a CAGR of 7.9% from 2011 to 2016.  In 2005, the total world API market was $76B and growing at an average annual rate of 8.2%. In 2005, final formulating firms in North America purchased 42% of APIs sold in the merchant market (75% of whichwere branded), firms in Western Europe purchased 19% (62% of which were branded), and firms in Asia purchased 21% (35% of which were branded).  API manufacturing has slowly been shifting from the historical leaders in Western countries to newer firms in India and China. This trend will continue as the Indian and Chinese API industries are growing at nearly 19.3% and 17.6% annually.

The market share held by Indian API manufacturers in the global API merchant market (generic APIs and branded/innovator APIs) was 6.5% in 2005, 12.0% in 2010, and is expected to increase to 22.0% by 2015. India’s share of the global generic API merchant market has increased from 13.5% in 2005 to 22.1% in 2010 and is expected to increase to 33.3% by 2015. Export sales of generic APIs from India increased at an average of 18.9% between 2005–2010 compared with an annual average of 15.9% to the country’s domestic market.  India is expected to be the fastest growing API supplier during the next five years and will keep its position above China.

The market share held by Chinese companies in the global API merchant market (generic APIs and branded/innovative APIs) has risen from 14.2% in 2005 to 19% in 2010. The market share held by Chinese companies in the global generic API merchant market increased from 31.1% in 2005 to 35.6% in 2010. Although China remains the largest API supplier on a global basis, growth rates from 2005–2010 of Chinese API suppliers were less than those of Indian suppliers. China’s share of the Western European generic API merchant market fell from 39.2% in 2005 to 35% in 2010. China’s share of the US generic API merchant market increased slightly from 11.5% to 12.9% in 2010. From 2010 through 2015, sales of Chinese API manufactures to the global API merchant market (generic and innovator APIs) are projected to increase at an annual average rate of 9.2% compared with an annual average of 18.5% for Indian API manufacturers. For the global generic API merchant market, sales by Chinese API manufacturers are expected to increase at a yearly rate of 8.1% compared with 16.5% for Indian API manufactures between the forecast period of 2010 to 2015.

While Italy still remains the world market leader in APIs destined to sectors such as cardiovascular or the central nervous system, China leads in anti-infective APIs with approximately 43% of world market share.

As a generalization, Chinese firms have tended to focus on the earlier raw materials stage whereas Indian firms have tended to focus more on the final API manufacturing stage. In many cases, a Chinese firm will make the raw material for a pharmaceutical product and then sell it to an Indian firm who will then convert the raw material into an API. Then, either the same firm, another Indian firm, a global Multinational Corporation (MNC) or a final formulator in a developing country will convert the API into a final formulation product ready for the market. However, the situation is rapidly evolving as both China and India gain new manufacturing skills. Not surprisingly, while many Western API firms have been winding down and/or consolidating their manufacturing capacity, many firms in India and China have been increasing capacity to meet the growing demand.

Traditional West European and North American Excipient Manufacturers have been Replaced by Indian Excipient Manufacturers and Chinese Excipient Manufacturers

Pharmaceutical excipients play an important role in pharmaceutical formulations by adding functionality or by facilitating the processing of a drug product.  Recent trends in the pharmaceutical excipient manufacturer industry include: geographic expansion and select investment in emerging markets.

The global market for excipients totaled $4.9 billion in 2011. That value is projected to reach more than $6.7 billion in 2016 after increasing at a five-year compound annual growth rate (CAGR) of 6.5%.   The global excipients market can be broken down by material type into three segments – organic, inorganic, and USP (U.S. pharmaceutical) water.   The segment made up of organic excipients held a value of nearly $4.6 billion in 2011, and is expected to grow at a CAGR of 6.6% to reach a value of nearly $6.3 billion in 2016. The segment made up of inorganic excipients, worth $268 million in 2011, should be worth $350 million in 2016, a CAGR of 5.5%. The USP water excipients segment totaled $92 million in 2011, and in 2016 that value should reach $114 million, a CAGR of 4.4%.

Increased globalization and strategies for securing the supply chain are important issues for excipient producers. The International Pharmaceutical Excipients Council (IPEC) expanded into China in July 2008 with the formation of IPEC–China. IPEC–China consists of manufacturers, distributors, and users of excipients. IPEC–China expects to work with China's State Food and Drug Administration in establishing standards for excipients, according to an IPEC–China 2008 press release. IPEC is also considering a proposal to create a multiregional body, the IPEC Federation, which will provide advocacy and promote quality in excipients globally, according to recent information from IPEC Europe.

The vision of the IPEC Federation would be to promote quality, safety, and functionality of excipients and to ensure that new excipients introduced into the market meet global standards. The federation would also seek to harmonize drug approval, technical, and pharmacopoeial standards and ensure that safe and effective dosage forms are circulated in the global supply chain. To meet these goals, the proposed federation would develop, implement, and promote voluntary, harmonized guidance and other programs for the pharmaceutical industry to ensure that excipients used in finished drug products meet appropriate standards for quality, safety, and functionality throughout the manufacturing and distribution process.

Pharmaceutical Quality Assurance Fraud Whistleblower Lawsuits, Drug Safety Fraud Whistleblower Lawsuits, Adulterated Drug Whistleblower Lawsuits, Contaminated Drug Whistleblower Lawsuits, and Pharmaceutical Drug Calibration Fraud Whistleblower Lawsuits

It is extremely important that pharmaceutical whistleblowers including Drug Quality Assurance Whistleblowers, Drug Calibration Whistleblowers, and other Drug Safety Whistleblowers continue to step forward to blow the whistle on adulterated drugs that threaten the health and safety of the people taking medications.  Because of the serious potential danger to the public including men, women, and children that can be caused by giving contaminated drugs or improperly calibrated drugs, it is vitally important that whistleblowers help make sure that drugs are properly calibrated and not contaminated.  Further, it is clear that the government will not tolerate any lapses in safety standards from pharmaceutical manufacturers. 

Increased enforcement by FDA and the offer of large economic incentives to contaminated adulterated drug whistleblowers will expose pharmaceutical fraud that attempts to hide drug safety and quality violations. As such, it is important for pharmaceutical drug safety whistleblowers to not delay in coming forward with a False Claim Act Qui Tam Action as the first whistleblower to file is eligible to be a relator and may make a large recovery for exposing the drug safety fraud.  Additionally, when the fraudulent scheme is exposed, the people that kept the fraud secret can sometimes be found liable for criminal activity for not exposing the drug safety fraud that was being committed and be held liable for continuing criminal activity.

There are several keys to a successful False Claims Act Qui Tam Whistleblower action including 1) obtaining original and specialized information of the fraud, 2) being the first to file regarding the specific fraud, and 3) protecting the whistleblower for retaliation.  Pharmaceutical whistleblowers including Drug Quality Assurance Whistleblowers, Drug Calibration Whistleblowers, and other Drug Safety Whistleblowers that timely and properly blow the whistle on defective and dangerous drugs, may receive a large amount of money for being the first to properly report fraudulent disregard for safety standards and pharmaceutical policies that hide adulterated drugs.   

Pharmaceutical Quality Assurance Whistleblower Lawsuit Information, Drug Safety Fraud Whistleblower Lawsuit Information, Adulterated Drug Whistleblower Lawsuit Information, Contaminated Drug Whistleblower Lawsuit Information, and Drug Calibration Fraud Whistleblower Lawsuit Information

The Department of Justice is cracking down on Fraud and False Claims including Medicare Fraud, Tricare Fraud, Nursing Home Fraud, Hospice Fraud, and other Health Care Fraud.  This crackdown includes adulterated drug fraud that threatens the health and lives of men, women, and children.  

GlaxoSmithKline to Plead Guilty & Pay $750 Million to Resolve Criminal and Civil Liability Regarding Manufacturing Deficiencies at Puerto Rico Plant

BOSTON – SB Pharmco Puerto Rico Inc., a subsidiary of GlaxoSmithKline, PLC (GSK), has agreed to plead guilty to charges relating to the manufacture and distribution of certain adulterated drugs made at GSK’s now-closed Cidra, Puerto Rico, manufacturing facility, the Justice Department announced today. The resolution includes a criminal fine and forfeiture totaling $150 million and a civil settlement under the False Claims Act and related state claims for $600 million.

The drugs, manufactured at the plant between 2001and 2005, are Kytril, Bactroban, Paxil CR and Avandamet. Kytril is a sterile anti-nausea medication. Bactroban is a topical anti-infection ointment commonly used to treat skin infections. Paxil CR is the controlled release formulation of the popular anti-depressant drug, Paxil, and Avandamet is a combination Type II diabetes drug.

The Food, Drug and Cosmetic Act (FDCA) prohibits the introduction or delivery for introduction into interstate commerce of any drug that is adulterated. Under the FDCA, a drug is deemed adulterated if the methods used in, or the facilities or controls used for, its manufacturing, processing, packing or holding did not conform to or were not operated or administered in conformity with current good manufacturing practice to assure that such drug met the requirements as to safety and had the identity and strength, and met the quality and purity characteristics, which it purported or was represented to possess.

The criminal information filed today alleges that SB Pharmco’s manufacturing operations failed to ensure that Kytril and Bactroban finished products were free of contamination from microorganisms. The criminal information further alleges that SB Pharmco’s manufacturing process caused Paxil CR two-layer tablets to split. The splitting, which the company itself called a "critical defect," caused the potential distribution of tablets that did not have any therapeutic effect and tablets that did not contain any controlled release mechanism.

The criminal information also alleges that Avandamet tablets manufactured by SB Pharmco did not always have the Food and Drug Administration (FDA)-approved mix of active ingredients, and, as a result, potentially contained too much or too little of the ingredient with the therapeutic effect. Finally, the criminal information alleges that SB Pharmco’s Cidra facility suffered from longstanding problems of product mix-ups, which caused tablets of one drug type and strength to be commingled with tablets of another drug type and/or strength in the same bottle.

SB Pharmco has agreed to plead guilty to a criminal felony for releasing into interstate commerce adulterated Kytril, Bactroban, Paxil CR and Avandamet, in violation of the FDCA. Under the plea agreement, the company will pay a criminal fine of $150 million, which includes forfeiting assets of $10 million. The guilty plea and sentence is not final until accepted by the U.S. District Court in Boston.

Under the civil settlement, GSK has agreed to pay an additional $600 million to the federal government and the states to resolve claims that it caused false claims to be submitted to government health care programs for certain quantities of adulterated Kytril, Bactroban, Paxil CR and Avandamet. The United States contends that GSK sold certain batches, lots or portions of lots of drugs, the strength of which differed materially from, or the purity or quality of which fell materially below, the strength, purity or quality specified in the drugs’ FDA applications or related documents. GSK thereby knowingly caused false and/or fraudulent claims to be submitted to, or caused purchases by, Medicaid and the other federal health care programs.

The federal share of the civil settlement amount is $436,440,000, and GSK will pay up to $163,560,000 to states that participate in the agreement.

"Adulterated drugs undermine the integrity of the FDA’s approval process, can introduce substandard or ineffective drugs on to the market and, in the worst cases, can potentially put patients’ health at risk," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will continue to work with our law enforcement partners to hold pharmaceutical companies accountable for this type of conduct and protect taxpayers from fraud, waste, and abuse."

"The industry has an obligation to ensure that all rules, regulations and laws are complied with," said U.S. Attorney Carmen Ortiz. "To do less erodes public confidence and compromises patient safety. As this investigation demonstrates, we will not tolerate corporate attempts to profit at the expense of the ill and needy in our society - or those who cut corners that result in potentially dangerous consequences to consumers."

“In fiscal year 2010, the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) realized nearly $2.3 billion in settlements and judgments against the pharmaceutical industry,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “If all pharmaceutical manufacturers complied with the law, there would be no need for such massive settlements and judgments. But until they stop stealing from taxpayers and threatening the health and lives of Americans – as is alleged here today – HHS-OIG will continue to vigorously pursue these corporations and their executives.”

"FDA’s manufacturing standards are designed to ensure the safety and quality of drugs distributed to American consumers," said Mark Dragonetti, Special Agent in Charge, FDA New York Field Office. "FDA expects pharmaceutical companies to abide by these manufacturing standards and correct deficiencies in an expedited manner. FDA and its law enforcement partners will continue to aggressively pursue those companies that place the public health at risk by distributing products that do not comply with all FDA requirements."

"This settlement demonstrates that the government will not stand for sub-standard drug product. As a result of this extensive investigation, millions of dollars will be returned to the Department of Veterans Affairs’ Pharmaceutical Supply Fund for the direct benefit of our Nation’s veterans," said Jeffrey G. Hughes, Special Agent in Charge, Office of Inspector General for the Department of Veterans Affairs.

"Federal employees deserve health care providers and suppliers, including drug manufacturers, that meet the highest standards of ethical and professional behavior," said Patrick E. McFarland, Inspector General of the U.S. Office of Personnel Management. "Today's settlement reminds the pharmaceutical industry that they must observe those standards and reflects the commitment of Federal law enforcement organizations to pursue improper and illegal conduct that places health care consumers at risk."

The civil settlement resolves one lawsuit filed in federal court in the District of Massachusetts under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblower - Cheryl Eckard - will receive approximately $96 million from the federal share of the settlement amount.

The criminal case is being prosecuted by the U.S. Attorney’s Office for the District of Massachusetts and the Department of Justice's Office of Consumer Litigation. The civil settlement was negotiated by the U.S. Attorney's Office for the District of Massachusetts and the Civil Division's Commercial Litigation Branch. The HHS Office of Counsel to the Inspector General, the Center for Medicare and Medicaid Services, FDA's Office of Chief Counsel, and the National Association of Medicaid Control Units provided assistance.

The case was investigated by agents from the FBI, the Department of Veterans Affairs, Office of the Inspector General, HHS-IG, the FDA’s Office of Criminal Investigations, the Defense Criminal Investigative Service and the Office of the Inspector General for the Office of Personnel Management.

This settlement is part of the government's emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $4.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $5.4 billion.

Hi-Tech Pharmaceuticals & 11 Individuals Indicted for "Generic" Pill Fraud Scheme Defendants Allegedly Sold Millions of Pills Over the Internet

ATLANTA - Eleven individuals and an Atlanta-based company have been indicted by a federal grand jury on multiple felony charges relating to a scheme to sell adulterated and unapproved new drugs over the Internet. Four of the defendants are scheduled to appear at a bond hearing before U.S. Magistrate Linda Walker at 1:45 P.M. EDT.

"The indictment’s allegations are disturbing because customers thought they were getting legitimate and safe prescription drugs over the Internet from Canada at cheaper prices, when in reality they received adulterated fakes that were crudely made in an unsanitary house in Belize," said U.S. Attorney David E. Nahmias.

The defendants named in the indictment are Jared Robert Wheat, 34, of Alpharetta, Ga.; David Dalton Johnson, 37, of Pinehurst, N.C.; David Alan Brady, 40, of Pinehurst, N.C.; Stephen Douglas Smith, 38, of Duluth, Ga.; Thomas Holda, 43, of Duluth, Ga.; Sergio Ronaldo Oliveira, 46, of Hoschton, Ga.; Brad Neal Watkins, 38, of Birmingham, Ala.; David Watkins, 40, of Norcross, Ga.; Steven Blinder, 42, of Aberdeen, S.D.; Michelle Young, 38, a citizen of Belize; Guillermo Pech, 28, also a citizen of Belize; and Hi-Tech Pharmaceuticals, a company based in Norcross, Ga.

All of the defendants are charged with two different conspiracies: (1) conspiring to import controlled substances into the U.S.; and (2) conspiring to violate the wire and mail fraud statute and to introduce into interstate commerce adulterated and misbranded prescription drugs. The indictment charges each of the defendants, except David Watkins, Brad Watkins and Steven Blinder, with different substantive violations including mail fraud, distribution of controlled substances and introducing adulterated and misbranded new drugs. The indictment also charges the lead defendant, Jared Wheat, with engaging in a continuing criminal enterprise. The indictment seeks to forfeit numerous properties, automobiles and bank accounts, and seeks a money judgment of not less than $19.8 million.

According to the indictment, Jared Wheat, the principal owner of Hi-Tech Pharmaceuticals, and the other defendants opened a drug manufacturing facility in Belize in approximately 2002. The defendants allegedly used Hi-Tech funds and Jared Wheat’s own funds to cover the costs of operating the Hi-Tech facility in Belize, and would travel to Belize to manufacture various prescription and controlled substances. The defendants allegedly made approximately 24 different drugs that they marketed through so-called "spam" advertisements over the Internet as authentic generic versions of those drugs being imported from Canada. The drugs included steroids such as "Oxymethelone" and "Stanazolol," along with unapproved versions of controlled drugs such as "Ambien," "Valium," and "Xanax." The defendants also manufactured versions of prescription drugs such as "Viagra," "Cialis," "Lipitor" and "Vioxx." From 2002 through 2004, the defendants allegedly ordered enough active ingredients to manufacture millions of pills, many of which were then shipped into the United States to individuals who purchased the drugs after receiving Internet "spam" and also to various wholesalers of drugs.

Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government's burden to prove each defendant's guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the DEA and the Food and Drug Administration’s Office of Criminal Investigations, with the Henry County Police Department. Valuable assistance has been provided by the Bureau of Alcohol, Tobacco and Firearms (ATF), the Customs and Border Protection Foreign Mail Facility in Miami, the Postal Inspection Service, Doraville Police Department, Roswell Police Department, City of Atlanta Police Department, Spalding County Sheriff's Office, Cobb County Sheriff's Office, Clarkston Police Department, East Point Police Department and the Duluth Police Department.

Assistant U.S. Attorneys Aaron M. Danzig, Randy S. Chartash and J. Russell Phillips are prosecuting the case.

Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government's burden to prove each defendant's guilt beyond a reasonable doubt at trial.

Economic Incentives for Whistleblowers Lawsuits, Government Fraud Lawsuits, and Qui Tam Lawsuits

When a government imposes a penalty, for the doing or not doing an act, and gives that penalty in part to whistleblowers that will sue for the same, and the other part of the recovery goes to the government, and makes it recoverable by action, such actions are called "qui tam actions", the plaintiff is suing on their own behalf as well for the government and taxpayers.

Qui tam provisions of the False Claims Act are based on the theory that one of the least expensive and most effective means of preventing frauds on taxpayers and the government is to make the perpetrators of government fraud liable to actions by private persons acting under the strong stimulus of personal ill will or the hope of gain.

The strong public policy behind creating an economic gain for whistleblowers is that  the government would be significantly less likely to learn of the allegations of fraud, but for persons in certain positions with specialized knowledge of fraud that has been committed. Congress has made it clear that creating this economic incentive is beneficial not only for the government, taxpayers, and the realtor, but is an efficient method of regulating government to prevent fraud and fraudulent schemes.

The central purpose of the qui tam provisions of the False Claims Act is to set up incentives to supplement government regulation and enforcement by encouraging whistleblowers with specialized knowledge of fraud going on in the government to blow the whistle on the crime.

The whistleblower's share of recovery is a maximum of 30 percent and the government's prior knowledge of fraud now does not necessarily bar a whistleblower from collecting lost revenue. If the government takes over the lawsuit, the relator can "continue as a party to the action." The defendant is also required to pay for the relator's attorney fees. The whistleblower is also protected from retaliatory actions by his or her employer. As a result a 1986 amendment to the False Claims Act, qui tam lawsuits have increased dramatically.   Though the amendment was first made for corrupt defense contractors, the amendment has uncovered billions of dollars in health care fraud and will probably apply to fraudulently obtained TARP and Bail Out Funds.

Regulations for Pharmaceutical Ingredients and Raw Materials

Regulation for pharmaceutical ingredients and raw materials can be complicated and can change depending on where the pharmaceutical ingredients are coming from and where they are being sold.  As such, an international producer from China or India that manufactures an API or excipient that sells it to a final formulator in the United States can be subject to the regulatory authorities in China and the United States.  The API or excipient manufacturer should be required to produce the product to the quality standards enforced by the Chinese authorities as well as will be required to meet USFDA standards as well.

The USFDA uses Drug Master Files (DMFs) to regulate APIs by stipulating that a final formulator manufacturing according to USFDA guidelines can only buy APIs from firms with an approved US Drug Master File (US-DMF). An API manufacturer submits a US-DMF to the USFDA with complete information on an API, including information on facilities, processes, and articles used in manufacturing. The USFDA, however, will not review the DMF until the final formulator files a New Drug Application (NDA), Abbreviated New Drug Application (ANDA) or ANDA supplement with the USFDA which requests use of this API in a finished formulation. Once a final formulator files, the USFDA schedules a Pre Approval Inspection of the API manufacturer and reviews the API manufacturer’s DMF. If a final formulator does not file to use the API, the USFDA assigns the DMF a number when it receives the DMF but does not review it. The USFDA does not approve DMFs, just ANDAs/NDAs that contain a DMF.

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International Whistleblowers along the pharmaceutical supply chain and other health care professionals are being offered large potential rewards to blow the whistle on adulterated pharmaceutical ingredients, adulterated medicine, adulterated drugs, contaminated medical supplies, and defective medical devices.  These whistleblower rewards can come from SEC Whistleblower Reward Lawsuits and traditional Qui Tam False Claims Act Whistleblower Reward Lawsuits.  For more information on these potential whistleblower rewards, it is helpful to contact an  International Adulterated Drug Supply Chain Whistleblower Reward Lawyer, International Pharmaceutical Supply Chain Fraud Whistleblower Lawyer, Medical Device Supply Chain Illegal Kickback Lawyer, Medicine Supply Chain Whistleblower Reward Lawyer, Medicine Supply Chain Fraud Lawyer, or Pharmaceutical Supply Chain Foreign Corrupt Practices Act Lawyer that understands these potential whistleblower reward lawsuits as well as whistleblower protections that can help protect professionals in the medical, health care, and pharmaceutical industries.

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As an International Pharmaceutical Ingredient Supply Chain Fraud Whistleblower Reward Lawyer, he works with other powerful international whistleblower lawyers that handle large whistleblower reward cases.  He works with Los Angeles International Whistleblower Reward Lawyers, San Antonio Health Care Procurement Fraud Lawyers, New York International Whistleblower Reward Lawyers, Dallas Health Care Fraud Whistleblower Lawyers, San Francisco International Import Export Fraud Lawyers, Houston International Medicine Supply Chain Fraud Whistleblower Lawyers, and other International Public Health Procurement Fraud Whistleblowers  throughout the United States and the world to blow the whistle on corruption and fraud. 

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If you are an international pharmaceutical company professional, international pharmaceutical company executive, international medical device professional, international medical device executive, public health administrator, medical doctor, or other professional with original source knowledge of a potential International Pharmaceutical Supply Chain Whistleblower Reward Lawsuit, International Adulterated Drug Whistleblower Reward Lawsuit, Counterfeit Drug Ingredient Whistleblower Lawsuit, Toxic Medication Illegal Kickback Lawsuit, Pharmaceutical Supply Chain Whistleblower Reward Lawsuit, or Drug Company Foreign Corrupt Practices Act Lawsuit or Foreign Corrupt Practices Act violation that could lead to an International Whistleblower Reward Lawsuit, please contact an international foreign corrupt practice act whistleblower reward lawyer to help expose the wrongdoing and protect yourself.

International Whistleblowers along the pharmaceutical supply chain and medical device supply chain are needed to blow the whistle on adulterated pharmaceutical ingredients that are being put into medicine, drugs, medical supplies, and medical devices.  For information on reporting adulterated pharmaceutical ingredients or illegal bribes along the pharmaceutical supply chain, please feel free to send an e-mail message to International Supply Chain Whistleblower Reward Lawyer, International Adulterated Pharmaceutical Supply Chain Whistleblower Lawyer, and International Pharmaceutical Executive Whistleblower Reward Lawyer Jason Coomer or use our submission form to discuss a potential International Medical Device Supply Chain Whistleblower Reward Lawsuit, International Adulterated Drug Whistleblower Reward Lawsuit, Adulterated Drug Contract Bribe Whistleblower Lawsuit, International Pharmaceutical Whistleblower Reward Lawsuit, and International Drug Supply Chain Foreign Corrupt Practices Act Lawsuit. 

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In the past few years, pharmaceutical whistleblowers have exposed fraud where drug companies have defrauded the United States Government out of Billions of dollars.   The pharmaceutical whistleblowers have received rewards of hundreds of millions of dollars for exposing drug company fraud.   Pharmaceutical Quality Assurance Whistleblower Lawyers, Drug Safety Whistleblower Lawyers, Contaminated Drug Whistleblower Lawyers, Adulterated Drugs Whistleblower Lawyers, and Pharmaceutical Drug Calibration Whistleblower  Qui Tam Lawyers are working with Pharmaceutical Quality Assurance Whistleblowers, Drug Safety Whistleblowers, Contaminated Drug Whistleblowers, Adulterated Drugs Whistleblowers, Pharmaceutical Drug Calibration Whistleblowers, and other drug company whistleblowers to blow the whistle on pharmaceutical fraud that hurts the United States. 

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If you are aware of a large health care company, financial institute, drug company, defense contractor, government contractor, or individual that is defrauding the United States Government out of millions or billions of dollars, it is important that you are the first to step forward with evidence of the fraud to report the fraud.  It is also important to understand potential whistleblower protections under the False Claims Act and to discuss with an attorney how to prepare for potential retaliation or aggressive attacks by the employer or contractor.  For more information on this topic please go to the following web page on False Claims Act Lawsuit Whistleblower Protections

If you are a pharmaceutical quality assurance manager, drug calibration specialist, or other pharmaceutical safety or quality control specialist that is aware of adulterated drug fraud, illegal drug kickbacks, or other pharmaceutical manufacturing fraud, feel free to contact Adulterated Drug Whistleblower, Drug Calibration Whistleblower, and Contaminated Drug Whistleblower Lawyer Jason Coomer via e-mail message or our submission form about a potential pharmaceutical quality control whistleblower lawsuit, drug calibration whistleblower lawsuit, or other pharmaceutical drug safety whistleblower lawsuit. 

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