U.S. doctors buying unapproved drugs

Update, December 11, 2012, 5:30 p.m. ET :

Dr. William Kincaid pleaded guilty Tuesday to receiving misbranded drugs with intent to defraud or mislead. According to the U.S. Attorney for the Eastern District of Tennessee, Kincaid was a managing partner for McLeod Cancer and Blood Center in Johnson City, Tenn., which obtained drugs from a Canadian business. The drugs were from foreign sources and had not been approved by the U.S. Food and Drug Administration. (Watch CBS News affiliate WJHL's report above.)

McLeod Cancer stopped ordering drugs from the Canadian business after nurses raised concerns in 2007 and 2008, but the center resumed ordering misbranded and unapproved drugs in 2009. In all, McLeod Cancer purchased over $2 million in misbranded unapproved drugs, provided the drugs to patients and billed Medicare and other government health benefits programs approximately $2.5 million.

Kincaid, 67, faces up to three years in prison and fines of up to $250,000.

(CBS News) A patient in a cancer clinic takes it on faith that he or she is getting the chemotherapy that their doctor prescribed. But it turns out many are injected with dubious concoctions no better than water. The Food and Drug Administration approves drugs sold in the United States, but some clinics are buying drugs from outside the country not approved by the FDA. CBS News, which has been investigating this trend, has this latest development.

This is what cancer drugs that are not approved for use in the U.S. look like: foreign labels with no stamp of approval from the federal Food and Drug Administration. They're illegal for doctors in the U.S. to prescribe.

"It could be deadly. It could be fatal," said one person who asked to be disguised. The person works at a medical clinic that purchased unapproved foreign cancer medications for years.

Read and watch Armen Keteyian's previous reports about counterfeit cancer drugs

The clinic worker was asked when the drugs come through if she sees them with foreign writing on the packages.

"We have," said the person. "Turkey, Germany -- German language on the package. And it was questioned and told that everything was fine, that these were the exact same drugs."

But they weren't the exact same drugs. And we've learned the federal government has now identified at least 79 U.S. medical practices that purchased drugs from foreign or unlicensed suppliers.

The FDA says the medical practices put "patients at risk" by exposing them to drugs that could have been "fake," "contaminated," "ineffective" and "dangerous."

Here's what they are talking about: Last year, vials of the cancer drug Avastin began popping up in U.S. clinics. It turned out the vials were fake and had no Avastin in them at all.

When we investigated, we found the fake Avastin was sold by companies in the Barbados, the U.K., Denmark, Switzerland, and a company in a building in a gritty neighborhood outside Cairo, Egypt. This is exactly why it's against the law to import drugs the FDA has not approved."

Marvin Shepherd, president of the Partnership for Safe Medicines -- the leading national group fighting counterfeit drugs, said: "The doctors should not be buying unapproved foreign medications and they know it too. I mean quite often, in the Avastin case, one side of the label was in French and the other side of the package was in Arabic. That is not an approved label by FDA. It was an unapproved product."

The clinic employee says the motivating factor is money. Foreign drugs are cheaper than U.S. drugs. For example, a European version of Avastin could be as much as $600 less than the average U.S. manufacturer's price.

"People these days will do anything to make a buck," said the clinic employee."They don't care about the people who are sick and dying."

The FDA says one of the clinics that purchased unapproved drugs is in this building in Johnson City, Tennessee. According to court records, FDA investigators found some cancer drugs at the clinic last year were either "misbranded" or "unapproved" for use in the U.S.

The owner of the clinic, Dr. William Kincaid, declined our request for an interview. So we went to his home in Johnson City. The person at the door asked us to leave.

In a written statement, Dr. Kincaid's clinic said it "did nothing wrong," and because the "issue is currently under review by the FDA," the clinic "will defer further comment on the matter."

What's still unknown is how many patients nationwide received unapproved foreign cancer drugs from their doctors. And the FDA won't say if any doctors have been charged.

"I've seen when patients suffer," said the clinic employee. "They suffer enough when they get diagnosed, when they are initially told that they have cancer. This adds a level of anxiety now and I don't think any patient should be forced to deal with that."

As for what's being done to help prevent this problem, both the House and Senate recently passed bills broadly expanding the FDA's power to inspect these foreign manufacturing sites. The bills also sharply increased penalties for counterfeiting drugs from three years to 20 years in prison. These two bills will go into law sometime this fall.