Drug seller sued over distributing phony pills

LARGO - Serving as an example of an alarming trend, a unit of Largo drug wholesaler DrugMax Inc. is being sued, accused of distributing counterfeit doses of the popular cholesterol drug Lipitor.

DrugMax denies the allegations, saying the batch of phony Lipitor tablets apparently originated somewhere else in the supply chain.

Nevertheless, the suit, filed in U.S. District Court in New York, underscores a growing concern that fake pills are making their way to consumers, in part because medication often passes through multiple distributors before it is sold.

Mark McClellan, the head of the Food and Drug Administration, urged drug manufacturers and distributors Wednesday to come up with new ways to keep the drug supply secure and combat "a real health threat."

Lipitor maker Pfizer Inc. echoed the concern. "The more hands (a drug) goes through, the easier it gets for counterfeiting," spokesman Bryant Haskins said.

Lipitor has proved particularly susceptible to counterfeiters. Nearly 200,000 bottles of counterfeit medicine were recalled last summer. The latest recall involving DrugMax is on a much smaller scale but is believed to come from the same batch.

The case involves a Lipitor shipment sold by New York distributor QK Healthcare Inc. to a mail-order arm of WellPoint Health Networks Inc., which then shipped the medicine to customers. The shipment included 20 bottles containing 5,000 tablets apiece - or 100,000 pills altogether - that were purportedly Lipitor.

WellPoint spokesman Ken Ferber said the FDA contacted his company in mid September, citing consumer complaints and alleging the medication was actually a low-potency substitute. It triggered a recall.

Ferber said the pills were not identified during the huge recall this year because they had been repackaged.

The FDA did not clarify how consumers identified the fake medication. But WellPoint and Pfizer said the phony pills are identifiable by a bitter taste.

WellPoint sent a letter warning patients and severed relations with its supplier, QK Healthcare. QK, in turn, on Oct. 2 sued its supplier for the allegedly tainted shipment: Valley Drug Co. of Youngstown, Ohio, a unit of DrugMax.

In its suit, QK said that Valley Drug claimed to have bought the pills directly from Pfizer. But DrugMax president Bill LaGamba disputed that account.

LaGamba said he has paperwork proving that Valley Drug received the disputed drugs from Alliance Wholesale in Chicago and there was no indication of a problem. "Had we known, we certainly would not have bought it," he said Wednesday.

DrugMax said Alliance had received the drugs from the Indiana office of yet another major distributor, AmerisourceBergen, but it's unclear whether even more distributors were part of the chain.

DrugMax is waiting to see where the audit trail leads before determining whom it might sue or other legal steps to take.

Despite the lengthy string of distributors, LaGamba insisted the problem was "a few bad apples" rather than a breakdown of the nation's drug supply chain. "The bulk of us are reputable wholesalers. When we buy from another wholesaler, we require them to sign an indemnity clause that says in a nutshell that the stuff you're selling me is good," he said. "It's very heavily regulated."

DrugMax grew quickly in 2000 and 2001 through acquiring other small drug wholesale companies. But revenues have fallen this year, and it has struggled to move out of the red.

This week, the company said revenues slipped 4 percent to $60.7-million for the quarter ended June 30. It narrowed its net loss to $35,728, or 1 cent a share, compared to a loss of $571,690, or 8 cents a share, in the year-ago period.

- Information from Times wires was used in this report. Jeff Harrington can be reached at harrington@sptimes.com or 813 226-3407.