Gilead Sciences (NASDAQ: GILD) says it uncovered a dangerous drug-counterfeiting operation in which its HIV medications were tampered with and improperly resold before reaching patients.
The scheme, allegedly run out of two New York City pharmacies, identified Peter Khaim, a twice-convicted medical fraudster, as the mastermind, according to court documents unsealed this month. The company described Khaim as one of the most brazen and largest manufacturers and sellers of counterfeit Gilead medications in the country.
Gilead sued Khaim along with the pharmacies, 71st RX and Best Scripts, both located in Queens, and others it claims were connected to the counterfeiting scheme. Gilead’s complaint said Khaim controlled the two pharmacies.
“The defendants and their co-conspirators manufactured and trafficked these counterfeit Gilead-branded HIV medications to pharmacies and patients in at least New York and New Jersey, putting untold numbers of patients’ health and safety at risk,” the lawsuit, filed by attorney Geoffrey Potter of Patterson Belknap Webb & Tyler, said.
Gilead says in its complaint that counterfeiters used its authentic prescription bottles, but tampered with the actual medication or associated documentation.
GILD shares skidded $1.08, or 1.5%, to $73.26.
