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California man pleads guilty to importing adulterated cancer drugs and agrees to forfeit $1.4 million

February 21, 2012

St. Louis, MO - The United States Attorney’s Office announced today that James Newcomb of La Jolla, California, pled guilty today to one count of conspiring to distribute adulterated prescription drugs to physicians in the United States, including local doctor Abid Nisar. Sentencing is set for May 25, 2012.

According to his plea agreement, Newcomb admitted that he and others caused the distribution of prescription drugs from foreign countries to physicians located in the United States, with the assistance of persons in Canada and the United Kingdom. These prescription drugs were not the U.S. version of these drugs that the U.S. Food and Drug Administration had approved for use in the United States, and their labeling did not contain NDC codes and other information from the U.S. labeling for these drugs. Newcomb and others marketed these drugs by sending an "actual oncology practice savings summary" suggesting that oncologists could purchase assorted prescription drugs at 14% – 60% off their average wholesale price in the United States, thereby saving practices an average of "40 cents on every dollar spent on oncology medications."

Newcomb admitted that during Fall 2010, he began distributing "cold chain" cancer chemotherapy drugs, namely prescription drugs that require a uniform cold temperature during shipment. Some "cold chain" drugs had high profit margins, for example 30% or 52%. One “cold chain” Neupogen® is a prescription drug that is typically intravenously infused into cancer patients. The U.S. labeling for this drug requires storage of the drug in a refrigerator at 2° to 8°C (36° to 46°F), and cautions that the drug should not be shaken. According to the U.S. labeling for this drug, if it is left at room temperature for longer than 24 hours, it should be discarded and not used with patients. Similarly, the FDA-approved U.S. labeling for the prescription drugs Herceptin® and Rituxan® requires that these drugs be kept at a constant temperature between 36 and 46 degrees Fahrenheit, and not shaken or frozen.

Newcomb learned that some doctor/customers had serious shipping problems with these “cold chain” cancer drugs. On October 13, 2010, Newcomb learned that a Missouri doctor had received a shipment of the prescription drugs marketed in the United States as Rituxan® and Herceptin® through Newcomb’s business and associates. Newcomb was informed that when this drug package arrived at the offices of Dr. Nisar in Missouri after being imported from outside the United States, it contained what a nurse working at the practice described as "a gooey mess." A "gooey substance" covered two prescription drug boxes from this package, as one of the "cold packs" included in the box leaked or was damaged during shipment, making the boxes of the prescription drugs in the package wet and disintegrated. Newcomb and others authorized a credit for this shipment, recognizing these drugs could not be used on patients because of the lack of temperature control during shipment of these drugs.

Later that year, Newcomb admitted to sending another shipment of the “cold chain” drugs marketed in the United States as Neupogen® and Rituxan® to Dr. Nisar in Missouri on January 7, 2011. In his plea agreement, Newcomb admitted that that drugs were “adulterated” under federal law in that the methods of their storage and shipment were not appropriate and did not provide adequate protection against foreseeable external factors in storage and use that can cause deterioration or contamination of these prescription drugs.

Newcomb further agreed to forfeit his interest in approximately $1.4 million seized or restrained during the investigation and a Land Rover automobile.

The conspiracy count carries a maximum penalty of five years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

This case was investigated by the Office of Criminal Investigation for the United States Food and Drug Administration and the Office of Inspector General for the United States Department of Health and Human Services, with assistance from the Defense Criminal Investigative Service of the U.S. Department of Defense.

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