Counterfeit GLP-1 drugs including Ozempic have become a national problem and pose health risks, experts say.
An Iowa phone company faces allegations in a civil lawsuit that it sold counterfeit Ozempic, the popular weight-loss drug, to a Michigan company.
The lawsuit appears to be one of the first of its kind accusing a licensed Iowa pharmacy of selling counterfeit semaglutide to consumers. It’s a rare but growing problem nationally, according to the US Food and Drug Administration and the National Association of Boards of Pharmacy.
Filed in Washington County, Iowa, by Central Pharmacy Management LLC of Dearborn, a suburb of Detroit, the suit accuses SmartScripts and Iowa City CEO Todd Thompson of violating the contract, fair comment, fraudulent inducement, fraudulent comment, unjust enrichment, consumer fraud and fraud.
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It is alleged that in late 2023, Central Pharmacy Management, which owns and operates pharmacies throughout Michigan, purchased and paid for 168 1-milligram doses of Ozempic for $132,250, then learned from a special agent of the Food and Drug Administration visited one of them. pharmacy that these medicines are fake.
Thompson, a graduate of the University of Iowa College of Pharmacy and a former long-term care administrator, did not return phone calls seeking comment.
It is not clear whether the alleged fake Ozempic was sick. Substandard or counterfeit semaglutide has reportedly led to hospitalization and even death in some cases worldwide.
A spokeswoman for the Iowa Department of Control and Appeals said Tuesday that the department is not aware of any licensed pharmacies in Iowa being penalized for selling counterfeit Ozempic or similar drugs.
Created by Novo Nordisk, Ozempic is one of the many GLP-1 agonists taking the world by storm due to its benefits. Often used to treat type 2 diabetes and obesity, GLP-1 agonists increase insulin production and satiety, according to the National Association of Boards of Pharmacy. Ozempic is one of many such drugs that are sometimes in short supply in the United States because of increased demand.
In a report released this year, the National Association of Boards of Pharmacy warned that dozens of websites are illegally selling counterfeit drugs like Ozempic. But counterfeit versions have also appeared in licensed facilities, the association said.
In late December, the FDA announced that it had seized thousands of counterfeit Ozempic products from the legal drug supply chain. The needles in these products were also fake. The announcement comes a week before the FDA visited a CPM pharmacy and reportedly found fake Ozempic being sold by SmartScripts.
SmartScripts accused of altering drug trade history
Opened in 2017, SmartScripts is one of the first telepharmacy companies in Iowa. Similar to Amazon’s Pillpack, the company offers maintenance medications through pre-packaged SmartPacks to customers across the country. In 2018, it introduced an insurance product that gave it the opportunity to offer discounts to customers.
By 2021, Thompson told the Business Record he employed 120 employees and served 8,000 to 10,000 customers nationwide. The company has locations in Iowa City; Washington, Iowa; and Fort Worth, Texas.
CPM said in its lawsuit that it obtained a transaction history and chain of ownership of Ozempic it purchased from SmartScripts, which it said showed a series of transactions for legal drugs. The lawsuit alleges that SmartScripts, through Thompson, falsely represented that the drugs were legal, provided false marketing information and knowingly altered marketing history.
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The company discovered that Ozempic was counterfeit when FDA agents visited one of its stores, Farmington Drugs in Livonia, Michigan, on Dec. 27, 2023, the lawsuit said.
"The FDA has ordered CPM to immediately stop selling the counterfeit drug, maintain a list of patients who received the counterfeit drug, and post nutritional and drug information," the lawsuit states. "CPM followed all FDA requirements and turned in all counterfeit drugs."
The company reportedly notified SmartScripts that the FDA had withdrawn the drugs, but SmartScripts did not return calls. Later, the company received an email saying that SmartScripts was working to fix the problem. It has not yet received a refund for the purchase, the lawsuit said.
Through CPM’s Des Moines attorney, Alison Kanne, the Watchdog asked CPM officials to investigate the FDA investigation and whether any patients were exposed to counterfeit Ozempic. Kanne did not answer.
The FDA said it could not confirm or deny the existence of the investigation "and the FDA generally does not discuss compliance issues, except with the companies involved."
The World Health Organization warned in June that fake Ozempic was found in the United States, United Kingdom and Brazil.
In its report this year, the National Association of Boards of Pharmacy said the FDA’s Adverse Event Reporting System found 42 people worldwide were hospitalized after being injected with semaglutide. standard or fake. Of the reports, 28 are classified as "serious," with fatal outcomes. Three of the hospitalizations occurred in the United States
SmartScripts faces lawsuits in other cases
The lawsuit, filed on July 8, is not the first against SmartScripts.
Last week, an Omaha, Nebraska, accounting firm called CFO Systems LLC filed a motion to foreclose on SmartScripts after it failed to pay the company $29,615.16. The move comes after the CFO filed a lawsuit, alleging breach of contract and unjust enrichment, after providing financial management services and obtaining a court order.
A jury trial in another lawsuit filed by McKesson Corp. is scheduled for August. in Texas in February by SmartScripts.
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The lawsuit alleges that in 2015, SmartScripts sought credit from McKesson to purchase pharmaceutical products from the Texas company. McKesson said he sold and delivered drug products purchased by SmartScripts, and that Thompson and his other company, Thompson Long-Term Care, owed McKesson $2.1 million.
In 2023, the company was also the target of a class-action lawsuit for calling people whose names were on the National Do Not Call Registry. SmartScripts accepted the use of phone numbers purchased from data brokers but refused to call people on the registry. Within months the case was settled out of court.
Companies including online vendors offering fake or counterfeit drugs or both should be reported to the FDA. Suspected counterfeit products may be reported to the FDA by calling the FDA’s Consumer Complaint Coordinator.
Lee Rood’s Reader’s Watchdog column helps Iowans get answers and action from government officials, the justice system, businesses and nonprofits. Reach him at lrood@registermedia.com, at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.
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