Targeting Phony Pharmaceuticals

'Tim Fagan's Law' Being Proposed To Combat Growing Problem

(CBS)  In Florida, a team of investigators in Florida was pulled together from three different agencies by former prosecutor Stephanie Feldman: "I called them Operation Stone Cold, because the people we were after were stone-cold killers. If you give a cancer patient hemophiliac-strength drugs, you're a killer. …(and) that happens. It happens all the time."

Operation Stone Cold uncovered a trail of counterfeit drugs, including Fagan's Epogen, Murphy points out.

According to investigators, it began as a much lower dose, which typically costs wholesalers about $260 a box. The original labels were washed off vials of medicine and replaced with new labels, made to look nearly identical to the label of a much higher dosage, which would cost $4700 a box. The process is called "up-labeling."

Cesar Arias, a pharmacist and inspector for the state's department of health, was one of the investigators who tracked the Epogen: "They traveled through strip clubs. They traveled through homes. They traveled in the trunks of cars without proper cooling."

And eventually, according to Eban's investigation, the Epogen was sold back to one of the original distributors, AmerisourceBergen, who sold it to CVS.

In the end, 110,000 vials of Epogen and Procrit were relabeled, with a net profit to the counterfeiter of $46 million, Murphy reports.

"Why is our medicine not better looked after?" Murphy put the question to Eban.

"In 1988," came the answer, "a federal law was passed that would have solved that problem, and required an audit trail for every drug that moved through the system. Lobbyists for the wholesalers came in and gutted that legislation. …As a result, the federal government cannot tell you where your medicine has been, who has handled it, or what is in it.

The Fagans are suing both CVS and AmerisourceBergen.

CVS declined Murphy's request for an interview, but issued a statement: "After receiving an alert from the manufacturer, our pharmacist quickly alerted the Fagan family about the counterfeit medication."

CVS has filed legal action against AmerisourceBergen and says it has taken steps to ensure its suppliers get medication only from reputable sources.

AmerisourceBergen also sent a statement to CBS News: "AmerisourceBergen is deeply concerned about the reckless activities of drug counterfeiters. …As a result of greatly enhanced tracking, monitoring and security controls since the period covered in Ms. Eban's book, we have had no incidents of counterfeit drugs in our distribution centers."

It's not enough for the Fagans. They hope new legislation will fill the gaps that exist in the system.

Says Kevin Fagan: "You can't do this to people and get away with it. Someone has to be held accountable."

For Tim, the experience has been devastating: "I'm frightened every morning and every night that I take a pill, or a shot, or whatever it is, because I'm not sure whether it's counterfeit or not."

Fifty people have been arrested so far as a result of the Florida investigation. Florida is one of three states to have tightened pharmaceutical laws. Manufacturers and many wholesalers have increased security measures.

In spite of this, the U.S. had 32 incidents of counterfeit medicine just last year, according to the Pharmaceutical Security Institute.