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U.S. Department of Health and Human Services

Inspections, Compliance, Enforcement, and Criminal Investigations

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July 31, 2013: Pleasant Grove Man Sentenced to Prison After Pleading Guilty to Unlicensed Wholesale Distribution of Prescription Drugs

 

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Food and Drug Administration 
Office of Criminal Investigations

 


 

 

             U.S. Department of Justice Press Release

 

 

For Immediate Release
July 31, 2013

United States Attorney

District of Utah

Contact: Melodie Rydalch

(801) 325-3206

 

            SALT LAKE CITY – Michael Lawrence O’Donnell, age 63, of Pleasant Grove, Utah, who distributed prescription pharmaceutical drugs he obtained in Europe to healthcare professionals around the United States without a license, will serve a year in federal prison. U.S. District Judge David Nuffer imposed the sentence Wednesday.

 

            In a plea agreement reached with federal prosecutors, O’Donnell admitted that between October 2005 and March 2007 he engaged in the wholesale distribution of prescription drugs, including Botox, Zometa, Gemzar, and Aranesp.  At the time he was distributing the drugs around the United States, O’Donnell admitted that he did not possess a license from the State of Utah to engage in the wholesale distribution of the drugs.

 

            According to the indictment in the case, prescription drug manufacturers generally distribute their products to doctors, pharmacists, and hospitals through licensed wholesale distributors. A prescription drug may have been purchased and distributed by several licensed wholesale distributors before it is delivered to a doctor, pharmacy, or hospital.  Some wholesale distributors obtained prescription drugs from questionable, and often unlicensed, sources that sell the drug for prices significantly below the average wholesale price of the drug.  Those sources may also have purchased stolen, counterfeit, sub-potent, unapproved, expired, or otherwise unlawful drugs.

 

            To prevent the distribution of stolen, counterfeit, sub-potent, unapproved, expired or otherwise unlawful drugs, Congress enacted the Prescription Drug Marketing Act (PDMA).  The Act prohibits individuals from engaging in the wholesale distribution of prescription drugs in a particular state unless the individual is licensed by the state to do so.

 

            “The defendant’s efforts to obtain foreign, unapproved prescription drugs from the United Kingdom and distribute them from Utah to health care practitioners throughout the United States defrauds the health care practitioners who purchased and administered the drugs, the end-user patients who were given the drugs, and the government and private insurance companies who reimbursed the health care professionals for the drugs, which were not what they were purported to be – that is, drugs distributed under federal law that met or exceeded U.S. pharmacy standards,” U.S. Attorney David B. Barlow said today.

 

“Unlicensed wholesalers, who import prescription drugs into the United States and further distribute them, introduce potentially substandard treatments into the stream of commerce, which, in turn, create potential health risks to the ultimate consumers of those drugs,” said Patrick Holland, Special Agent in Charge of FDA’s Office of Criminal Investigations Kansas City Office.  “Protection of the pharmaceutical supply chain remains among our highest priorities, and we at FDA’s Office of Criminal Investigations will continue to partner with the Department of Justice and our law enforcement counterparts to vigorously investigate supply-chain issues.”

 

            The indictment alleged that O’Donnell owned and operated several businesses that represented themselves as medicine wholesalers. As a part of his business, O’Donnell secured wholesale quantities of prescription pharmaceutical drugs from his related company, GHRX, located in the United Kingdom.  GHRX obtained these pharmaceuticals from unknown sources throughout the world.  O’Donnell received orders for prescription pharmaceutical drugs that had been placed through Clinical Care Pharmacy and Concord Drug Store, internet web sites that held themselves out to be and functioned as internet-based pharmacies.

 

            The internet pharmacy web sites represented that their prices were competitive or lower than prices for comparable drugs available through other pharmacies and that their products were approved by United States and Canadian regulators and that their purported brand-name and generic prescription pharmaceutical drugs were equivalent to, or exceeded, North American standards.

 

            Contrary to those representations, the indictment alleged, the prescription drugs offered through these internet pharmacy web sites were not, in fact, approved by the FDA for introduction and use in the United States. The pharmaceutical drugs were shipped by employees of O’Donnell to health care providers throughout the United States using nondescript boxes and false return addresses to conceal the actual originating shipping location.

 

            He pleaded guilty to a count in the indictment that charged him with shipping Botox from Utah to a health care provider in New York in July 2006.

 

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