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California Man Pleads Guilty in Cancer Drug Scheme

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ST. LOUIS, Mo. – A California man has pleaded guilty to distributing unapproved chemotherapy drugs to doctors throughout the United States, including to one doctor in St. Louis, Abid Nisar.

In the plea deal James Newcomb of La Jolla, California admitted working with people in Canada and the United Kingdom to get the non U.S. versions of oncology drugs mailed to the United States. Newcomb said he then marketed his discounted drugs to doctor’s offices by sending a “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 Newconb’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 dollars 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.

Sentencing is set for May 25, 2012.

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