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Stolen Advair Shows How Pharmacies Are the Crime-Infested Ghettos of the Drug Business

GlaxoSmithKline (GSK)'s report that that 25,600 Advair Diskus inhalers worth $5 million, stolen from one of its warehouses in August 2009, have started showing up on pharmacy store shelves illustrates that pharmacies are often the crime-ridden ghettos of the drug business.

When the inhalers were stolen, few people asked why someone would go to such an effort to obtain asthma medicine illegally. There was a similar lack of curiosity when $75 million of drugs were stolen Mission: Impossible-style from Eli Lilly (LLY).

Now we know the answer to the question no one asked: Although some stolen drugs may be sold on the street or by dubious internet operations, much of it is resold back to the original pharmacies they were intended for.

While you may regard your friendly neighborhood pharmacist as the kindly person who hands over sweet chemical relief when you're sick or in pain, underneath the white coat is a cutthroat business riddled with crooks. About 34 percent of pharmacies have rogue employees who steal merchandise or cash, according to this survey, and 44 percent of chains reported employee theft.

RSF Pharmaceuticals just lost its license after it was linked to a prescription scam involving the Chargers NFL team. This wasn't some back alley operation -- RSF was run by the former president of the San Diego County pharmacists association.

Worse, the large pharmacy wholesalers are continually tempted to augment their legitimate, expensive supplies from manufacturers with illegitimate, cheap supplies from criminals, according to this enlightening article in CIO magazine:

Dozens of smaller pharmaceutical wholesale companies were calling, desperate to buy his drugs. These secondary or "grey market" wholesalers scour the country and the world for low-price drugs they can sell back to major wholesalers for a profit. In addition to trawling for institutional pharmacies, some secondary wholesalers have been known to purchase counterfeit drugs from criminal organizations in places such as China, Thailand or Colombia.

... large and small wholesalers were taking advantage of multitiered pricing in the industry. ... These multiple steps, in which a drug can bounce back and forth from distributor to distributor, create a supply chain that is complex, convoluted and, at times, vulnerable. The more frequently a drug changes hands, the greater the chance that counterfeit or diverted drugs can enter the legitimate supply chain.

That's probably what happened with Advair. Presumably, there's a paper trail that will lead the DEA from the pharmacies where the stolen Advair was being sold to the underground operation that obtained it. With a bit of luck, they'll find Eli Lilly's loot in there too.


Image by Flickr user katutaide, CC.