Counterfeit Avastin, A Guilty Plea And A $6M Forfeiture

In the latest fallout from the counterfeit Avastin episode last year, a former salesman for a Canadian pharmacy yesterday pleaded guilty to a felony for selling misbranded and unapproved cancer drugs. Paul Bottomley faces up to three years in prison, a $250,000 fine and one year of supervised release; sentencing is scheduled for July (here is the plea agreement).

The feds became interested in him early last year after the FDA came across a supplier known as Montana Health Care Solutions. At one point, Bottomley owned MHCS and later sold the company to Canada Drugs, although he remained an advisor and was paid $10,000 a month. He was listed as business development director on contact sheets distributed to medical practices.

At the time, at least 19 medical practices had purchased counterfeit Avastin. Although he had no involvement in importing or distributing counterfeit Avastin, the feds alleged that he was aware that the medicines being distributed were misbranded and unapproved. Moreover, Bottomley had been identified as sales contact by various medical practices (back story).

The FDA had received information from the UK’s Medicines and Healthcare Products Regulatory Agency about counterfeit Avastin after a wholesaler purchased 167 packs from a supplier in the
European Union and later shipped 41 packs to Volunteer Distribution in Gainesboro, Tennessee.
Volunteer Distribution had a distribution contract with QSP, a subsidiary of Canada Drugs.
Meanwhile, back in the US, some physicians and practice managers admitted they knew they were buying foreign versions of Avastin and other drugs based on pricing and packaging. For example, MHCS charged $1,700 per vial for Avastin when the drug would normally cost nearly $2,300 per vial. Some physicians admitted they billed insurers for the prices they would bill for approved drugs. Avastin, of course, is sold by Roche.

In a separate civil proceeding, Bottomley agreed to forfeit nearly $1.1 million, a 2011 Aston Martin/Vantage V-12 and 10 parcels of real estate in Gallatin County, Montana. The property was forfeited because the government established the property was the proceeds of the illegal activity outlined in the criminal case. The total forfeiture is valued at approximately $6 million (read more here in the court documents).

“The defendant’s conduct in this case was motivated by greed. Bottomley utilized the grey market and sold potentially dangerous unapproved and misbranded pharmaceuticals at discounted prices to American physicians all for a healthy profit,” US Attorney in Montana Michael Cotter said in a statement. Bottomley’s attorney did not respond to a request for comment. Separately, Canada Drugs laid off hundreds of employees last week, according to The Winnipeg Sun.