Sales reps plead guilty in imported drugs caseBy MATTHEW BARAKAT , Associated Press
Nov. 6, 2013 5:04 PM ET
ALEXANDRIA, Va. (AP) — Two sales representatives from a now-defunct pharmaceutical company have pleaded guilty to their roles in a scheme to illegally import millions of dollars' worth in prescription drugs into the U.S.
Patricia Durr, 49, of Hopkinton, Mass., and Lisa Coroniti, 46, of Devon, Pa., entered pleas Wednesday in federal court in Alexandria.
The two are among a dozen individuals charged in connection with the former company, Gallant Pharma International, which was based in Washington suburb of Arlington in northern Virginia.
Authorities say Gallant imported cheap versions of chemotherapy and plastic surgery drugs from other countries into the U.S., circumventing federal rules on the importation and branding of prescription drugs.
Court papers indicate some of the imported drugs were not shipped under proper temperature controls. Other shipments included packaging and instructions written in Turkish or other foreign languages.
Durr's lawyer, John Hundley, declined comment after Wednesday's hearing. Durr faces up to three years in prison.
Plea documents indicate that Durr was responsible for selling drugs to doctors and hospitals in Connecticut and Massachusetts. Many of the drugs were for chemotherapy or plastic surgery, including the anti-wrinkle treatment Botox. Several of the drugs carried what the Food and Drug Administration calls its "black box" warning, meaning the drug carries a significant risk of serious injury if used improperly.
The documents state that Durr asked her employer if the business model was legal when she was hired as a sales representative in 2010, and was assured by the company's owners that it was legal.
But the documents show that Durr was constantly fielding skeptical questions from customers about whether Gallant was a legitimate company. She acknowledged in the court documents that by 2012, she had become "willfully blind" to the evidence that Gallant was operating outside the law.
Coroniti's plea indicated similar circumstances.
"She didn't know what she was doing was illegal" at first, Coroniti's lawyer, John Zwerling, told the judge at Wednesday's hearing. Eventually, though, "there were enough red flags that she should have known."
One of the company's co-owners and founders, Talib Khan, 42, of Montreal, has already entered a guilty plea. He admitted that Gallant had revenue of at least $12.4 million from August 2009 through August 2013, and profits of $3.4 million during that time.
Durr admitted in court papers that she personally sold misbranded drugs to 33 doctors and medical practices, generating more than $2.6 million in revenue.
Court documents indicate that shortly after Gallant began operating in 2009, it received complaints from drug makers. Arizona-based Medicis, which had exclusive U.S. marketing rights for the drugs Restylane and Perlane, injectable anti-wrinkle drugs, sent Gallant a cease-and-desist letter in the fall of 2009.
Price controls imposed on prescription drugs by other countries often make drugs in the U.S. significantly more expensive than in other parts of the world. Some health-care advocates have long championed importation of foreign drugs as a way to help U.S. patients reduce costs, but generally, the Food and Drug Administration does not allow the use of imported drugs, saying their safety can't be guaranteed.
Imported drugs from Canada are popular, nevertheless. In Gallant's case, authorities say it represented itself as a Canadian company but was actually getting its drugs from places such as Switzerland, Turkey and the United Arab Emirates.
Botox was a particularly popular product. The court documents indicate that some shipments included vials that showed signs of contamination, but at least one medical practice used vials from a tampered lot, despite Durr's recommendation against it.
Some Botox shipments, which needed to be kept cool, were found in boxes with melted ice packs and other signs of degradation. At least one Botox sample was tested and found to have only 20 percent of the active ingredient it was supposed to have.
Gallant's other co-founder, Syed "Farhan" Huda of Arlington, has pleaded not guilty and is awaiting trial. Criminal charges also were filed against the company itself.