An Upstate pharmaceutical company will pay $2 million in fines after admitting that it bought drugs from unlicensed suppliers who had gotten them illegally. Easley-based Altec Medical will also have to forfeit $1 million after pleading guilty last week to purchasing and distributing pharmaceuticals from what’s known as a “gray-market” supplier.
The U.S. Justice Department said a judge ordered Altec to a year of probation for defrauding the Food & Drug Administration. Federal prosecutors say the company paid its supplier William Rodriguez $55 million from 2007 to 2009 for prescription drugs he acquired illegally, although the announcement does not say how.
Rodriguez and Altec diverted the drugs from FDA-regulated supply lines, then falsified the company’s records before reselling those drugs to area pharmacies, the Justice Department said. In particular, prosecutors say Altec and Rodriguez falsified documents known as “drug pedigrees.” These are statements required by the FDA from those who sell wholesale quantities of prescription drugs. The drug pedigrees are supposed to accurately identify all prior sales and transactions to show the drugs have been acquired lawfully, and properly stored and held along the way.
“Drug diversion undermines the safety and effectiveness of our prescription drug system,” said Stuart Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “When individuals divert drugs from lawful channels, we cannot be sure that the drugs are properly handled and stored. As a result, diverted drugs could be expired, become contaminated, or have their mechanisms of action altered.”
Rodriguez has already pleaded guilty to conspiracy and money laundering in June in a separate case.
Matt Long contributed to this report