Pharmaceutical Distributor Pleads Guilty to Selling Counterfeit Drugs
DOJ Seal
October 18, 2006
Bradley J. Schlozman
United States Attorney
400 East Ninth Street, Room 5510
Kansas City, MO 64106
Contact Don Ledford, Public Affairs
(816) 426-4220

Pharmaceutical Distributor Pleads Guilty to Selling Counterfeit Drugs

Kansas City, Mo. -- Bradley J. Schlozman, United States Attorney for the Western District of Missouri, announced that the owner of a Kansas City, Mo., pharmaceutical distribution company pleaded guilty in federal court today to selling counterfeit and misbranded drugs.

Douglas C. Albers, 55, of Leawood, Kan., pleaded guilty before U.S. District Judge Ortrie D. Smith this afternoon to the charges contained in a Dec. 14, 2005, superseding indictment. Albers the owner of Albers Medical Distributors, Inc., a Kansas City firm engaged in the distribution of pharmaceuticals in the secondary wholesale market also agreed to pay a $500,000 civil forfeiture and to surrender his pharmacy licenses in Missouri and Kansas. Albers also agreed that no action will be taken by himself or Albers Medical Distributors to discharge or extinguish in bankruptcy any judgment entered or settlement agreement reached in numerous civil actions that have been filed in various state and federal courts related to this matter.

By pleading guilty today, Albers admitted that he sold counterfeit and misbranded Neupogen to a California firm in September 2001, despite warnings and notices from the Food and Drug Administration and his own knowledge of counterfeit Neupogen that earlier had been purchased and distributed by his firm. Neupogen is an injectable human growth hormone used to decrease the incidence of infections in persons with lowered immune systems, such as cancer and AIDS patients.

Albers admitted today that this conduct constituted willful blindness on his part, Schlozman said. To continue engaging in this criminal behavior after repeated warnings from both the FDA and industry officials took unmitigated chutzpah, and reflected a heartless disregard for the cancer patients and AIDS patients who may have suffered as a result.

Although Albers specifically pleaded guilty to one count each of selling counterfeit Neupogen and misbranded Neupogen, Schlozman explained, federal prosecutors will argue that all of the conduct charged in the dismissed counts of the superseding indictment as well as any other uncharged related criminal activity should be considered relevant conduct for the purpose of determining an appropriate prison sentence and restitution order.

At the urging of the FDA, Schlozman said, Albers initiated a recall of more than 18 million Lipitor tablets, perhaps the largest recall in the history of criminal investigations of counterfeit medications. Thousands of unsuspecting people received counterfeit and misbranded drugs while millions of dollars were changing hands among unscrupulous businessmen like Albers who profited in a corrupt, shadowy market.

Albers used the services of a pharmaceutical broker, OTS Sales, to identify vendors from which he purchased and sold pharmaceuticals. In May and June 2001, the FDA notified Albers of counterfeit Neupogen purchased and distributed by his firm through OTS Sales. In June 2001, the FDA issued a counterfeit/misbranded drug notice concerning Neupogen. Despite those warnings, Schlozman said, in September 2001 Albers purchased two 10-vial boxes on Neupogen from the same lot cited in the FDA notice from MedRx in a deal that was brokered by OTS Sales. Albers then sold and distributed the counterfeit and misbranded Neupogen to Actsys Medical, Inc., in California, a sale brokered by OTS Sales.

Beginning in 2000, the Missouri Board of Pharmacy had advised Albers that he could not purchase pharmaceuticals from out-of-state distributors unless the distributor was licensed in Missouri. Albers admitted today that, despite those warnings, he had not taken any investigatory or prohibitory steps to confirm OTS Sales was only purchasing from Missouri licensed brokers. MedRx, Albers source for the counterfeit and misbranded Neupogen, is not licensed in Missouri.

Under federal statutes, Albers could be subject to a sentence of up to six years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. A sentencing hearing is scheduled Feb. 27, 2007.

This case is being prosecuted by Senior Litigation Counsel Gene Porter. It was investigated by the Office of Criminal Investigations, U.S. Food and Drug Administration.

This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at