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$45 Million Fine for Smuggling Misbranded Pharmaceuticals into U.S.

Friday, August 28, 2015
Sandler, Travis & Rosenberg Trade Report

Two foreign companies have been fined $45 million and required to forfeit another $30 million for orchestrating a multi-year conspiracy to smuggle misbranded prescription pharmaceuticals into the U.S., according to a press release from the Office of the U.S. Attorney for the Eastern District of Virginia. During the conspiracy the two companies received more than $33 million in proceeds from sales of these non-FDA approved drugs, which included orthopedic injections, rheumatology infusions, cosmetic devices, optomology products and oncology drugs sourced from countries such as India, Turkey, France and Italy.

The press release states that to smuggle the drugs across the U.S. border, large shipments were broken down into multiple small shipments accompanied by customs forms falsely stating the contents and value of the shipments. The small shipments were sent to various locations under different false names over several days. Drop shippers at those locations received the packages, removed indicia that they were from abroad, and re-shipped them to doctors and clinics in the U.S. so they would have a U.S.-based return address. These drop shippers stored the products in the basements of their private residences, often in violation of safety regulations requiring storage at cool temperatures.

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