Wednesday, Oct. 15, 2003 | 11:24 a.m.
An official of a company that makes a key drug for AIDS patients testified Tuesday the company isn't sure how a fake version of the drug -- tied to two Las Vegas companies -- ended up on pharmacy shelves.
And an AIDS patient testified he was distraught about his health after he injected a fake version of the drug.
The testimony came during the first day of hearings before the Nevada State Board of Pharmacy, which is seeking to discipline two Las Vegas drug distribution companies, Dutchess Business Services Inc. and Legend Pharmaceuticals Inc. The companies face numerous allegations and could be fined or lose their licenses.
The hearing got under way after some legal fireworks in which the Las Vegas companies sued the board on Friday and convinced Clark County District Court Judge Jessie Walsh to remove the board's executive secretary and the board's attorney from the disciplinary hearing. The companies claim those officials are biased against them and the secondary drug wholesaling industry.
But the Pharmacy Board brought in a replacement attorney, who launched the prosecution Tuesday.
Serono Inc., based in Rockland, Mass., manufactures Serostim, a drug used to treat AIDS patients who experience excessive weight loss.
Dutchess is accused of buying and selling counterfeit Serostim.
Two batches of Serostim were determined by the manufacturer to be counterfeit, but the batches surfaced a few months apart. The first counterfeit batch had the same lot number as a batch from the manufacturer, but the expiration date had been changed by a year.
Dutchess conducted a voluntary recall of several vials of Serostim that were potentially counterfeit once it was aware of the problem.
The Pharmacy Board complaint alleges Dutchess sold some of the counterfeit drug to another company that in turn sold it to major wholesaler McKesson Corp. In turn, the drug was then sold to retail pharmacies and some patients used the counterfeit drug.
Officials debated Tuesday whether Dutchess knew it was dealing in counterfeit drugs.
"In order to be guilty, you have to do that and you have to know about it," said Ryan Schultz, one of the attorneys for both companies.
Jeffrey Hart, a vice president of sales and marketing with Serono, said the companies that Dutchess and Legend purchased Serostim from were not the manufacturer's customers.
The companies -- Cactus Rx in Phoenix and Florida wholesalers Crystal Coast Inc., Genendo Inc. and Xenigen Inc. -- were not authorized to sell Serostim, he said.
The Pharmacy Board complaint alleges Dutchess purchased Serostim from these companies.
Though none of the companies are Serono's customers, records show Crystal Coast and Genendo have possessed Serostim and have falsely said they were authorized distributors in their "pedigrees," Hart said.
Pedigrees list the origin of a drug and, in some cases, track it through each wholesaler until it reaches the pharmacy or medical operation where it's administered.
He said neither Dutchess nor Legend was ever a customer of Serono.
About 90 percent of Serono's business is with the large wholesalers: McKesson, Cardinal Health Inc. and AmerisourceBergen Corp. The other 10 percent is with regional wholesalers.
After the two counterfeit batches surfaced, Serono tightened its distribution in October 2002 by reducing the number of customers authorized to buy and sell Serostim.
"We don't know how Serostim gets into the secondary (wholesale) market," he said.
Pamela Williamson Joyce, vice president of regulatory affairs and quality assurance for Serono, said the company started receiving calls at the end of 2000 from patients and pharmacists about unusual looking Serostim vials. Some patients complained of a lasting stinging sensation when they injected the drug.
Months later, Serono learned the counterfeit vials didn't contain Serostim or any other growth hormone, Williamson Joyce said.
In the spring of 2001, the companies received calls about a suspicious lot number. Serono had never issued that lot number, Williamson Joyce said.
The fact that counterfeit drugs were ending up on retail shelves sent "significant alarm" to Serono, she said.
The counterfeiting problem is troubling since consumers typically trust their pharmacies, she said.
But patients who have been exposed to counterfeits have become afraid to take prescriptions even when they have access to legitimate products, she said.
Pharmacy Board officials say they don't know whether any of the counterfeit drugs were sold or used in Nevada.
In a cross-examination by Steven Gibson, an attorney for Dutchess and Legend, Williamson Joyce said it was possible for lot numbers to be changed once they left Serono, but not legitimately.
She also said she did not know the source of any of the counterfeit Serostim.
San Francisco resident Rick Roberts, who said he has AIDS, testified he injected some of the counterfeit Serostim and experienced a lasting stinging sensation at the injection site in November or December 2000. When Roberts went to pick up his next supply in January 2001, he said he asked to talk to a pharmacist and told him about the stinging and differences in the vials. "'You should go home and check, you may have gotten some of the fake stuff,' " Roberts said the pharmacist told him. Roberts said he didn't inject the supply he picked up in January.
"I didn't know what to think and I was afraid to take it," he said. "I felt pretty desperate not knowing if I was going to have consequences from whatever it was." The rest of Roberts' testimony was postponed until later this week to allow witnesses from Serono to speak because the hearing was running behind.
Dutchess and Legend are also accused of selling and buying Lupron and Zoladex in deals with wholesalers not licensed in Nevada, and, in some cases, not authorized to sell the drugs. Lupron and Zoladex are competing products used to treat prostate cancer.
Schultz said Nevada wholesalers could legally sell to companies licensed in other states.
Attorneys for Dutchess and Legend say the complaint was filed in retaliation to a federal lawsuit Dutchess and other companies have pending against Pharmacy Board executive secretary Keith Macdonald and general counsel Louis Ling. The lawsuit was filed in U.S. District court in Las Vegas in March and resulted in a gag order being issued against both men. They are accused of business slander and intentional interference of an economic advantage. Macdonald and Ling, citing the gag order, have declined comment on those allegations.
The Nevada Pharmacy Board complaint said Florida officials in May and June arrested three people allegedly involved in illegal pharmaceutical dealing. They were Per Oddmund Loyning, his wife, Elenore Walker and company partner Guy Sarapo. Loyning was using the name of William Walker, Walker's late husband, the Pharmacy Board complaint said.
The Walkers and Kresler were said to be associated with Crystal Coast, Genendo, Xenigen and Rekcus, from which Dutchess and Legend purchased and sold drugs, the complaint said.
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