October 3, 2002
Nearly $18 million worth of reduced-price HIV drugs intended for impoverished Africans have been intercepted by profiteers and shipped back to Europe to be sold at marked-up prices, according to a current investigation. As a result of the scheme, nearly a quarter of the supply of the antiretroviral drug Combivir that was intended for African patients has not reached them in the last year, said the drug's manufacturer, GlaxoSmithKline.
Instead, it and two other Glaxo HIV drugs were sold in Germany, the Netherlands, Britain and Switzerland by European wholesalers that now are under investigation. At least some of the drugs were shipped from a Glaxo factory in France and arrived in Africa, but the shipment "never made it out of the airport before it was turned back around by these wholesalers to Europe," said Raymond Salet, spokesman for the Dutch health care inspector's office.
The apparent thievery and fraud was described in an internal Glaxo document obtained by The Washington Post; it was confirmed yesterday by Glaxo and several European officials. The diversion appears to have worked this way, according to Dutch and Glaxo officials:
Glaxo used air freight companies to transport the medicine to Africa. Once on the ground, the shipments were moved from one company that handles customs clearances on imports to another that performs the same task. They were then sent to an air freight service employed by the profiteers and flown to Europe.
Delivered to wholesalers there, the drugs made their way into the regular chain of commerce. Because the drugs were identical to European versions, "the pharmacists who bought them could innocently have thought they were their usual orders," Salet said.
The diversion of pharmaceuticals "is very shadowy," said Chris Viehbacher, president of pharmaceuticals for Europe for Glaxo, one of six international drug makers participating in an HIV drug discount program for developing countries. Glaxo is "not sure" about all the facts at this point, he said.
After persistent agitation by AIDS activists to improve access to treatment in developing countries, Glaxo had discounted Combivir, which costs between $4 and $6 a pill in Western Europe, to 80 cents a pill in sub-Saharan Africa, where an estimated 28.5 million people are infected with HIV, the virus that causes AIDS. The diverted medicines were intended for use in Congo Republic, Senegal, Ivory Coast, Togo and Guinea-Bissau, according to European sources.
"We've been fighting so hard to get these medicines, and for someone to take them from the hands of people who are dying, to make money for themselves, it's terrible, a scandal," said Sarata Ottro Zirignon-Toure, deputy chief of staff to Ivory Coast's president.
The scheme involving Glaxo's products has been going on since at least July 2001 but was undetected by the giant drug maker and European regulators until this past July, when customs inspectors in Belgium noticed irregularities in a shipment sent from Senegal by a Dutch wholesaler that was passing the medicine along to another Dutch wholesaler.
That discovery prompted authorities to search and seize a variety of shipping records and computer files that exposed the wider scope of the problem. Neither Glaxo nor Dutch officials would disclose the identity of the European companies under scrutiny in the diversion, but Viehbacher described the Dutch company that received the shipment from Senegal as "a mom and pop shop with not more than a few employees."
Yesterday, Dutch health officials announced a recall of the batches of Glaxo HIV medicines it said were illegally imported by the Dutch wholesaler. The announcement said the products were safe but should not have been allowed into the country. Viehbacher said Glaxo did not yet know how middlemen infiltrated the drug distribution system or how the volume of diverted drugs went unnoticed.
Glaxo estimates that 28 shipments of Combivir, Epivir and Trizivir were diverted through July of this year, totaling close to 3 million doses. Those shipments, worth $18 million retail, moved from the five African countries through Paris and Brussels, then into Antwerp, the Belgian city where inspectors noticed discrepancies in July. None of Glaxo's African customers in the discount program -- which include public health services and workplace clinics -- complained that they had not received their products, a lapse that might be explained by problems with inventory control or delays between shipping and billing, Viehbacher said.
"The part of the distribution chain we control we are very comfortable with," he said, but "from the moment it leaves our gates you have trucking and air freight and firms that handle the customs work." The drugs intended for Africa did not have special packaging or markings to differentiate them from the medicines offered for sale in Europe, which would make it easier for the drugs to be sent back and sold at the higher price without notice by unsuspecting pharmacists or patients.
Glaxo plans to change its packaging and pill designs for the reduced-price HIV products it sells to developing countries, Viehbacher said. He said Glaxo "is seriously concerned" about the illegal shipments, "but is this going to shake our commitment to the program? Not at this time. The human need is too big." His company will press for stricter border controls and adherence to existing trade regulations, he said.
Drug makers and advocates for AIDS patients have in the past expressed fears that specialty pricing would be a great temptation for criminals and opportunists. But while there have been scattered reports in the last year of localized black-market activity in some African countries, Glaxo's troubles mark an escalation into international commercial channels.
Jon Liden, a spokesman for the World Health Organization, said the profiteering and diversion are "very upsetting. It prevents pills from getting to people who are dying and need them, and secondly, we worry this could be used to undermine the hard-won and revolutionary idea of the special pricing for countries in desperate need."
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