Two weeks ago, confessed pharma supply chain criminal William Rodriguez of South Florida was sentenced to 10 years of prison time, and then two years of supervised release. He was also required to hand over $55 million, which represents the proceeds from his crimes.
What was his crime? He was the person who ran the licensed wholesale drug distribution company formerly in South Carolina, Ocean Pharmed, that bought the Novo Nordisk insulin that was stolen in a cargo theft back in 2009. In his plea, Rodriguez admitted that all of the drugs that Ocean had sold into the supply chain had been obtained from unlicensed or otherwise illegitimate sources, like the stolen insulin.
This is the story that was so well documented by Katherine Eban in her excellent March 2011 article, “Drug Theft Goes Big” in Fortune Magazine online, and which I discussed in my essay “Lessons from ‘Drug Theft Goes Big’” and further dissected in my follow-up essay “Reliance on Trust in the U.S. Pharma Supply Chain”. The Eban article is particularly worth re-reading to get the full story. Then read the DoJ press release to get the final chapter.
Rodriquez conspired with Altec Medical, another South Carolina licensed drug wholesaler (who also plead guilty), to hide the fact that the drugs had previously been stolen by forging a pedigree, of all things. They made it look like the insulin had been supplied by one of the big 3 wholesalers. It turns out that South Carolina doesn’t have a drug pedigree requirement. But a legitimate wholesaler in Maryland was interested in buying a large quantity of the insulin as long as they came with a pedigree as required by Maryland law (and the federal PDMA). So the only way Altec and Rodriguez could unload their booty was to create a fake paper pedigree.
And it worked…for a while. They completed the sale and the Maryland wholesaler filed away the pedigree they had been given, and then sold a large portion of the stock to a chain pharmacy, passing on part of the big savings they had made.
Unfortunately, after the cargo thieves stole the insulin they failed to keep it refrigerated and so it had all gone bad by the time Altec sold it to the Maryland wholesaler. Very soon after the chain pharmacy distributed the insulin to their stores, reports of adverse reactions came in to the FDA. At some point, the investigators came across the fake pedigree in the files of the Maryland wholesaler and the chase was on. Checking with the big 3 wholesaler apparently proved that they had not supplied the drugs, so Altec Medical and Rodriguez had a lot of explaining to do.
I don’t know how much of this case and its successful conclusion revolved around that forged paper pedigree, but my bet is that the forged pedigree left them no room to point the finger at anyone else, and so the only thing they could do was plead guilty and throw themselves at the mercy of the Court. In any case, this case has come to this conclusion in near-record time (for pharma supply chain crimes) because of the guilty pleas.
BUT PATIENTS WERE HARMED, YOU SAY?
“Yeah, the criminals were nailed, but patients were harmed! Doesn’t that prove that pedigrees are the wrong approach? Point of Dispense (POD) Authentication would have blocked the patients from receiving the stolen medicine.”
In this case, yes. But this was not a full electronic pedigree system. It was a single paper pedigree that the criminals were forced to provide before they could collect payment, and which pointed the finger right back at them in the end, despite being forged. The reason the drugs were not identified as stolen and therefore tainted before patients received them was that the Maryland wholesaler was not required to inspect and authenticate the pedigree they received. They just needed to hold it in case an inspector asked to see it later (which they did in this case).
Wide scale authentication of paper pedigrees is effectively impossible. But wide scale authentication of electronic pedigrees, under a carefully selected electronic pedigree model that includes automated authentication capabilities is possible without bringing our drug distribution network to its knees. That would have blocked the tainted insulin from being given to patients and, unlike POD authentication, it still would have pointed the finger back at the criminal so fast that they wouldn’t have been paid yet. They might not have gotten out of their swivel chair before they were fingered.
So which outcome is better? Stop the bad drug from reaching the patient but let the criminals move on so they can do it again (as in POD authentication), or stop the bad drug AND find the criminal who did it fast enough and solid enough to put them away so they can’t do it again (as in ePedigrees). If you have a criminal problem in your pharma supply chain, I think the latter. What do you think?