Purchaser of Unapproved Drugs Pleads Guilty

Shortages of certain sterile injectables pushed some practices to source these products from unapproved distributers. Back in February 2012, counterfeit versions of Roche/Genentech’s cancer drug, Avastin, appeared in the US, prompting FDA to send letters to practices that had purchased drugs from several foreign distributers, including Clinical Care, Quality Specialty Products (QSP), Montana Health Care Solutions, and Bridgewater Medical.

As part of its investigation into the distribution of counterfeit drugs, FDA apparently decided that at least one of the physicians who obtained these products was not a naïve victim. According to an FDA press release, William Ralph Kincaid, of Gray, Tenn., pleaded guilty to receiving misbranded drugs with intent to defraud or mislead in violation of the Food, Drug, and Cosmetics Act. Kincaid was formerly physician and managing partner for East Tennessee Hematology-Oncology Associates, but did business under the name McLeod Cancer and Blood Center.

McLeod Cancer purchased products from Canada-based QSP in 2007 but stopped purchasing from them in 2008 after nurses raised concerns over foreign labeling on some of the products, according to the release. Kincaid resumed purchasing drugs from QSP in 2009, but had them shipped to a storage facility in which he owned an interest. After they were received at the storage business, the drugs were transported to McLeod Cancer, and then placed by a pharmacy technician into the clinic’s drug storage and control system, where the misbranded drugs were mingled with FDA-approved drugs from legitimate sources. Drugs obtained from legitimate US drug manufacturers and distributors were shipped directly to McLeod Cancer and not to the storage business.

In addition, FDA alleges that Kincaid overcharged government payers for his discount purchases. FDA says that McLeod Cancer purchased more than $2 million in misbranded unapproved drugs and billed Medicare, TennCare, and other government health benefits programs approximately $2.5 million for the unapproved drugs.

Kincaid faces a term of up to three years in prison and fines of up to $250,000. He was released pending sentencing, which is scheduled for June, 2013. I’ve said before that if something (such as a really cheap drug) looks too good to be true, it probably isn’t. But this is a case where the purchaser knew exactly what he was getting.