Foreign-Sourced Injectables and the Ever Present Risk of FDA Enforcement
By Andrew S. Ittleman
November 2, 2020
My first interaction with MedEsthetics Magazine was in 2013. That year, I lectured at the annual AACS Scientific Meeting in Las Vegas about a recent case involving counterfeit Avastin, an infused cancer drug, and how it impacted the medaesthetics industry. In that case, a group of Canadian online pharmacies had distributed the counterfeit product to hundreds of physicians in the United States, who then administered it to patients and, in many cases, were reimbursed by Medicare and Medicaid. Some of those doctors were criminally prosecuted, and all of their names were posted on the FDA’s website, even though none of them knew they had done anything wrong. Of course, as I also discussed in that lecture, it was around that same time that I started receiving calls from doctors who were having their own uncomfortable interactions with the U.S. government as a result of their purchase and use of injectable products from the same group of Canadian pharmacies. Many of those doctors were dermatologists and cosmetic surgeons, and Medesthetics Magazine featured my lecture in its April 2013 issue.
There have been ebbs and flows in the story between then and now, but for the most part it has continued unabated. The cases I have handled for dermatologists and cosmetic surgeons have typically begun when the doctor received an unsolicited fax or email from a company claiming to be a pharmacy and offering discounted prices on injectables, including a variety of fillers and, most often, Botox. Intrigued by the lower price, the doctor purchased the products, they were delivered via next day air, an admin at the office unpacked and stored them with the rest of the clinic’s injectables, and the doctor used them on his patients. Unlike the Avastin case, in every case I have seen, the products have worked just fine, the patients were as satisfied as ever, and the doctor naturally reordered, sometimes again and again without a single adverse incident. Nothing to see here, right?
Unfortunately, no, there’s always more to the story, which is why I have to get involved. There are two main problems: the law, and the ease with which these cases rise to the surface.
First, the law. Remember the unsolicited fax the doctor received? Well, it turns out it came from a pharmacy in Canada. But the product was fine, right? Yes, the product itself was fine, but it was intended for a market other than the United States, such as Canada, the UK, Turkey or Pakistan, and if the doctor himself unpacked it he may have seen that the labeling was different than what he was used to, and may have even been in a foreign language. And had the doctor been an FDA lawyer, he may have understood that when FDA approves a product, it also approves the product’s labeling, so the law treats these foreign versions of approved injectables as unapproved when they enter the country and arrive at the practice. The doctor has violated the law without even knowing it.
Second, the facts. These cases have typically risen to the surface in one of two ways. In some instances, sales reps for the injectable manufacturers have noticed a discrepancy between the volume of products sold to the doctor by the sales rep and the total number of products in the doctor’s inventory. From there, the sales reps have reported the discrepancy to the manufacturer, who then reports it to FDA, who then initiates an investigation, in many cases resulting in prosecution. This trend was reported in a 2016 Reuters Special Report called “Botox Police” which described “low morale” at FDA as a result of the volume of these cases involving no criminal intent on the part of the targeted doctors. In more instances though, these cases have risen to the surface when FDA has cracked down on the Canadian pharmacies distributing the unapproved versions of the products in the United States. Most notably, in 2012 FDA and INTERPOL launched “Operation Pangea V” in which FDA seized customer information from one such group of pharmacies and then posted the names of 250 U.S. doctors on fda.gov. There have been six more Operation Pangeas since then, which reached their crescendo with the U.S. government’s criminal conviction of Kristjan Thorkelson, the Canadian citizen who started the Canada Drugs Online Pharmacy Network. Of course, Mr. Thorkelson was prosecuted in Montana, which was where the unapproved versions of the products were smuggled to be shipped by next day air to the unwitting American purchasers.
These cases, which continue to this day, reveal important phenomena. Primarily, even beyond injectable products, there is still a strong incentive to purchase foreign sourced drugs because they are less expensive. Foreign governments can set price controls for drug products, even Botox, but the United States government cannot, so manufacturers make up the difference here. The Trump Administration has sought to create a legal pathway for the sale of certain foreign sourced drugs in the U.S., but faces regulatory hurdles and bipartisan political opposition. For its part, Allergan has announced that “legalizing prescription drug importation is a highly dangerous way to help people afford their medicines…”
Next, the number of these cases, and the duration of this story, reveals the ease with which they can be prosecuted. In short, when a doctor imports unapproved drug products into the United States, he commits a federal misdemeanor, whether he knows it or not. Under the Food, Drug & Cosmetic Act (FDCA), the “Park Doctrine” – which is named after a 1975 Supreme Court case called United States v. Park – allows the government to seek a misdemeanor conviction against individuals for alleged FDCA violations without proving that the individual was even aware of the violation. Instead, the government need only establish that the violation occurred and that the individual could have prevented or corrected it, a far lower burden for a less serious criminal violation, typically resulting in no prison time.
Even though these misdemeanor cases are less serious than felony cases involving intentional conduct, they can still have grave consequences, especially for doctors. Primarily, doctors are required to report these cases to their medical boards, which can lead to separate sanctions related to their licenses and reputation. Additionally, these misdemeanor cases can lead to collateral cases filed by the U.S. Department of Health and Human Services, resulting in restrictions on the doctors’ ability to receive reimbursements from Medicare and Medicaid, and even to work for other companies that do. And finally, these cases tend to settle quickly, because the threat of fraud and money laundering charges looms behind each of them. In short, keeping in mind that the doctors’ patients were likely never told that they would be injected with an unapproved version of a familiar product, it takes little effort for the government to ratchet the unwitting misdemeanor violation up to a felony fraud violation, and to the extent the doctor deposited the proceeds of that fraud into a bank account, money laundering allegations can also follow. For obvious reasons, these cases rarely, if ever, go to trial.
However, the FDCA does recognize a “good faith” defense to the misdemeanor charges, but establishing good faith requires real due diligence on the doctor’s part. For starters, doctors should be aware that all entities that distribute drug products in the United States are required to register with FDA, and in many instances the individual states, so the doctor would be wise to check on those registrations before purchasing from an unfamiliar distributor. Even if the distributor can survive the initial due diligence, the doctor – as opposed to an admin – should inspect the product’s packaging and confirm that it is, in fact, the U.S. version of the familiar product. The packaging itself, the language in which it is written, and dosing recommendations are all critical features. Finally, to the extent there is any lack of familiarity with the seller, the doctor can request a “guaranty,” in which the seller certifies in writing that the product complies with U.S. law. Of course, none of these efforts provides complete protection from enforcement, but they can lower the risk of worst case scenarios.
In sum, doctors are always free to explore new and less expensive injectable options for their practices. However, FDA has pursued these cases against doctors for the past 8 years with no signs of relenting. So long as this trend continues, doctors should keep in mind the ever present risk of enforcement, and conduct thorough due diligence of all new distributors before even considering injecting their products into patients.