CAMBRIDGE — As litigation in federal court continues between Cambridge-based pharmaceutical distributor Safe Chain Solutions and pharmaceutical manufacturer Gilead Sciences, Safe Chain maintains its denial of all allegations.
Safe Chain Solutions and co-founders Charlie and Patrick Boyd are three of the defendants named in a massive federal complaint accusing dozens of other distributors, suppliers and pharmacies of being involved with an elaborate counterfeit HIV drug scheme.
Safe Chain and the Boyds, who are brothers, are accused of selling authentic-looking bottles of Biktarvy and Descovy HIV medications to pharmacies across the country, according to an unsealed federal complaint filed in October 2021 by attorneys for Gilead Sciences Inc., a biopharmaceutical company that develops and markets a variety of medications, including drugs that treat or prevent HIV.
Gilead filed the original federal complaint against Safe Chain and the Boyd brothers, among 75 total defendants across the country, on July 22, 2021, and filed two amended complaints on Aug. 19, 2021 and Oct. 14, 2021.
Gilead’s deeper investigation into the alleged scheme revealed that some of the bottles contained completely different drugs not used to treat HIV. Some of the bottles reportedly contained quetiapine, or Seroquel XR — an antipsychotic used to treat schizophrenia, bipolar disorder and major depressive disorder.
The complaint also alleges that some of the counterfeit bottles purchased from Safe Chain, which were received by pharmacies and later reported to the pharmacies by customers, came with falsified pedigrees, or documentation, that claimed to trace the drugs back to an authentic source.
Following the Feb. 25 story detailing the allegations in the complaint, the Boyd brothers sent a letter to the editor and took part in multiple interviews with The Star Democrat to affirm their strong denial of the allegations in an effort to move forward from the lawsuit’s impacts and continue to grow their business.
In a March 2022 interview, the Boyds compared Gilead’s lawsuit against Safe Chain to the story of David and Goliath — a Biblical story about a young boy finding courage and faith to defeat a giant.
The Boyds stated that Gilead has employed “aggressive” litigation tactics to attempt to get documentation from them in order to find out what occurred further up the pharmaceutical supply chain. They also voiced frustration with Gilead for wanting the documentation.
In their letter to the editor, which was published in The Star Democrat on March 13, the Boyd brothers wrote:
“Lastly, we have, throughout this process, considered ourselves partners with Gilead. SafeChain cooperated with Gilead and provided dozens of documents surrounding our suppliers and purchases. We were trying in good faith to work with Gilead to resolve any issues with the products we sold. We requested information from Gilead to help us better assess the situation, but Gilead would not provide or answer any questions we had.”
Since the first complaint the company received regarding counterfeit medications, Safe Chain has also done “everything possible” to increase its due diligence in the pharmaceutical shipment receiving process at the facility in Cambridge.
According to Safe Chain’s new standard operating procedures for receiving, which were reissued on March 15, 2021, once the boxes are received from daily deliveries, the company’s warehouse staff will visually examine each shipping container for damage or tampering.
If any damage or evidence of tampering is found, the sender will be notified and a return authorization will be requested. Products are quarantined until a disposition of their status is determined.
If products are shipped without any visual defects, a Safe Chain employee will then verify the expiration dates and lot numbers match the shipping information included with the original package. If there are any discrepancies, the product will be quarantined until the sender is notified and the situation resolved.
Additional safety measures are taken with controlled substances and temperature-controlled products.
If any discrepancies with amounts of product are noticed after receiving the product, the warehouse team is to notify the purchasing team, which will then notify the vendor to make arrangements to correct the discrepancy.
Once the product has been received and inspected, the warehouse manager or supervisor will update the company’s inventory management system with the day’s receipts and turn in all hard copies of receipt of goods to the purchasing team for filing.
Throughout the whole receiving and inventory allocation process, at least four individuals inspect the product to ensure safety, the Boyds said.
In response to the July 2021 seizure of their facilities, Safe Chain founder and CEO Charlie Boyd said there was nothing abnormal about the medications taken, and there were no red flags.
As of October 2021, Gilead was still reviewing the products and documentation seized in July 2021, but had confirmed counterfeit bottles of Biktarvy and Descovy, among several other non-HIV Gilead medications.
The Boyds said that out of the 1,000 or more bottles seized from their facility, over 850 of those bottles were already quarantined, based on the complaints they had received. The brothers said they did “above and beyond” what they were supposed to do with reporting the quarantined items to the FDA.
In the complaint, Gilead also stated a “large number” of the seized medications were missing the FDA-mandated instructions for use, which are attached to every authentic bottle. Other bottles showed signs that the instructions for use had been re-glued to the bottles, and some were the wrong instructions. Some instructions for use were counterfeits, identified by spelling errors.
In response to the allegations of missing FDA-mandated instructions or inserts that had been tampered with, the brothers said they didn’t recall any incorrect instructions and that missing inserts “happen all the time.”
The brothers also asserted that if there was any wrongdoing, it was further up the supply chain with other suppliers or the “leader” defendants, and that the lawsuit was a situation they found themselves in the middle of.
‘Part of the problem’
However, Gilead sees Safe Chain’s role in the alleged scheme as something more.
“No, we find them to be part of the problem, and to be a big part of the problem,” said Lori Mayall, the head of anti-counterfeiting and brand protection at Gilead.
“Without (Safe Chain), the really bad guys would not have a channel to get the counterfeits to patients,” she continued. “They’re critical cogs in the game.”
The federal complaint also asserted that Safe Chain was purchasing from unauthorized suppliers of Gilead’s product — all of which became licensed in their respective states just months before selling and distributing the drugs to Safe Chain.
While purchasing drugs from state-licensed wholesalers isn’t technically illegal, a significant concern comes to light: the transactions go against Gilead’s desired supply chain of manufacturer to authorized distributor to pharmacy, and because of that, the likelihood for potential counterfeits increases as the drugs pass through more hands. That likelihood appeared more possible when Gilead began investigating the alleged “shady, fly-by-night counterfeiters” that Safe Chain purchased from.
Pedigrees and statements from the complaint indicated drugs Safe Chain had purchased had passed through two slightly different supply chains.
According to one pedigree, the drugs were said to have originated from Gilead, then were sold to an unnamed drug co-op, then to a licensed wholesale distributor, then to Safe Chain, which sold the drugs to a pharmacy. Another pedigree indicated that the drugs originated from Gilead, then were sold to a Gilead-authorized distributor, then to a licensed wholesaler, then to Safe Chain, then to a pharmacy.
“…from an economics perspective, the more it changes hands, how is anybody making money in that system?” Mayall said. “Just from a business/economics perspective in the supply chain, if you sell something to somebody, they’re going to mark it up and sell it down to another chain …These guys were getting products that were so cheap, but there’s no way they (could) get it from a legitimate source.”
Additional investigation by Gilead revealed that some sales either didn’t occur or that their true journey through the supply chain wasn’t documented. All of the licensed wholesale distributors Safe Chain purchased from were not licensed to sell drugs in Maryland, were not registered with the FDA and were not licensed suppliers under the Drug Supply Chain Security Act.
“There are licensed wholesalers such as Safe Chain that operate, and they have probably a legitimate business selling certain products, but there are certain products that make absolutely no economic sense to be able to exchange hands two or three times before it gets to a pharmacy when that manufacturer sells that product for one price to their authorized distributor,” Mayall said.
The following timeline displays several of the counterfeit complaints from pharmacies that purchased from Safe Chain.
The White Cross Pharmacy in California reported to Gilead and Safe Chain that a patient returned a bottle of Biktarvy that contained foreign medication inside. The pharmacy had purchased the bottle from Safe Chain.
Gilead asked Safe Chain to identify who had supplied the counterfeit to them, but Safe Chain refused to do so, according to the federal complaint.
In a March 2022 interview, the Boyds explained their reasoning behind not giving Gilead the name of this supplier initially. The Boyds said they were advised by legal counsel to not provide those details to Gilead, and that they had no obligation to provide those details to the manufacturer because Gilead is not a regulatory body.
Additionally, the Boyds said Gilead had not told them the products were illegitimate; they thought Gilead was trying to cut off their suppliers, and Safe Chain wanted to protect the supply chain. However, if Gilead had told them the full specifics, Safe Chain would have disclosed their suppliers, the Boyds said.
Safe Chain contacted Gilead with a request to verify an expiration date on a bottle of Biktarvy. According to the complaint, Safe Chain did not explain what prompted the inquiry, but did send a pedigree for the bottle in question. That pedigree claimed an initial sale from Gilead to an unnamed drug co-op, then to Boulevard 9229 LLC, a New York-based pharmaceutical wholesaler, then to Safe Chain.
Boulevard 9229 was licensed as a pharmacy in New York from November 25, 2019, to March 30, 2021. The company’s status is listed as discontinued, according to the New York Office of the Professions.
The Maryland Board of Pharmacy licensing database shows no results for a license for Boulevard 9229.
Safe Chain received another report of counterfeit Biktarvy from The Medicine Shoppe, a Maryland pharmacy chain also implicated in the lawsuit. According to the federal complaint, the counterfeit bottle of Biktarvy was actually filled with 300 milligram tablets of Seroquel XR, an antipsychotic used to treat schizophrenia, bipolar disorder and major depressive disorder.
The complaint also stated that in an email to The Medicine Shoppe, Safe Chain’s director of compliance suggested the pharmacy return the counterfeit bottle to Safe Chain and let them send it back. Safe Chain never reported the counterfeit to Gilead, according to the complaint.
The Medicine Shoppe received another report of counterfeit Bikarvy that had been purchased from Safe Chain.
Following the third report of a counterfeit purchased from Safe Chain, the company provided Gilead with pedigrees for all three of the counterfeit Biktarvy bottles. The pedigrees indicated that all three of the bottles Safe Chain had sold to the pharmacies were purchased from Gentek LLC, a Connecticut-based pharmaceutical wholesaler.
Gentek was licensed in Connecticut as a drug wholesaler from July 1, 2020, to June 30, 2021. Their license has since lapsed, according to the Connecticut Department of Consumer Protection.
The Maryland Board of Pharmacy licensing database shows no results for a license for Gentek.
The pedigrees also indicated that Gentek had purchased the counterfeits from Drogueria Betances, a Gilead-authorized distributor in Puerto Rico. Gilead later determined they had not sold the lot numbers listed on those pedigrees to Drogueria Betances and confirmed with the company that Gentek was not one of its customers.
Later in its investigation, Gilead also learned that Safe Chain had altered those pedigrees by adding false information before sending them to Gilead. Gilead obtained the pedigree that Safe Chain sent to The Medicine Shoppe in the normal course of business, and found that the pedigree Safe Chain had provided differed from the one The Medicine Shoppe provided.
The pedigree Safe Chain originally sent to The Medicine Shoppe, which was dated for early January 2021, listed an initial sale from Gilead to Gentek — which is not a Gilead-authorized distributor, and was also missing the manufacturer’s address, date purchased from Gilead and the reference number for the alleged sale.
The pedigree that Safe Chain sent to Gilead listed the initial sale from Gilead to Drogueria Betances and the missing information from the other pedigree.
According to the complaint, Safe Chain sent both sets of pedigrees to Gilead as PDF files showing metadata indicating the date they were created. However, the second pedigree that Safe Chain sent to Gilead listing the purported original and authentic sale indicated that the pedigree had actually been created on Feb. 19, 2021 — days before Safe Chain sent it to Gilead, and over a month after it should have been created during the normal course of business.
From August 2020 to February 2021, Safe Chain purchased over 8,000 bottles of Gilead HIV medications from Gentek — including over 3,000 bottles of Biktarvy — for over $20 million.
Gilead received two new complaints from pharmacies in New York City and Washington, D.C., about counterfeit bottles of Biktarvy and Descovy purchased from Safe Chain. The pharmacy in Washington provided the pedigree for the counterfeit bottle of Descovy, which indicated that Safe Chain had purchased the bottle from Boulevard 9229.
In late March, legal counsel for Gilead demanded that Safe Chain quarantine all Gilead products in its inventory and provide all documentation, including pedigrees, of all Gilead-branded medication it had purchased since 2020. According to the complaint, Safe Chain responded three days later refusing to quarantine Gilead products or provide documentation. The complaint also alleged that Safe Chain attempted to blame the counterfeiting on Gentek and claimed it had ceased purchasing from Gentek.
During an April 20 phone call between Safe Chain’s counsel and Gilead’s counsel, Safe Chain stated it had a new source for Gilead products, and that their source was buying directly from Cesar Castillo LLC, a Gilead-authorized distributor. According to the complaint, Gilead asked Safe Chain to produce those pedigrees, but Safe Chain did not.
On May 3, Gilead served subpoenas on Safe Chain and two of their suppliers as part of ongoing litigation in Florida federal court concerning fraudulent diversion of Gilead medications.
A letter from Safe Chain’s counsel reinforced the April assertion of a new legitimate source for the Gilead product.
In the letter, counsel for Safe Chain stated it had contacted Cesar Castillo to verify its newest supplier. The letter added Safe Chain was willing to provide the lot numbers and expiration dates for the products from the new supplier if Gilead would provide an acknowledgement that Safe Chain had not falsified any pedigrees provided to Gilead and provide a release to Safe Chain regarding its sales of Gilead-branded medications. The letter also stated the “most important requirement” was that Gilead follow the request if it would like for Safe Chain to continue voluntarily providing additional information to Gilead.
Gilead did not agree to acknowledge that Safe Chain had never falsified a pedigree, to withdraw the subpoena related to the Florida litigation or to give a blanket release of all its legal claims against Safe Chain.
On May 28, The Medicine Shoppe — the Maryland pharmacy customer that had received multiple counterfeits from their Safe Chain purchase — provided Gilead with copies of their communications with Safe Chain, which included pedigrees for the Gilead HIV medications received in April.
The pedigrees did show an initial sale to Cesar Castillo, but also identified Safe Chain’s new supplier: Synergy Group Wholesalers LLC, a New Jersey-based drug wholesaler.
Synergy was first licensed in New Jersey as a drug wholesaler on Sept. 4, 2020. The company’s state registration expired on Jan. 31, 2022, according to the New Jersey Department of Health.
The Maryland Board of Pharmacy licensing database shows no results for a license for Synergy.
The pedigrees The Medicine Shoppe shared with Gilead indicated that Synergy purchased the Gilead HIV medications from Cesar Castillo and immediately sold them to Safe Chain.
According to the complaint, Gilead investigated the pedigrees and found they were fraudulent and that Safe Chain’s claim of verifying the purchases from Cesar Castillo was a lie. Gilead never sold the lot numbers listed on the pedigrees to Cesar Castillo.
Cesar Castillo also had never sold Gilead products or any other products to Synergy, had never heard of Synergy or Safe Chain and was never contacted by Safe Chain.
An additional pedigree dated from early March 2021 provided to Gilead by The Medicine Shoppe indicated that Synergy had purchased the HIV drugs directly from Gilead — a false statement, according to Gilead, as Synergy is not a Gilead-authorized distributor and had never purchased directly from Gilead.
Despite Safe Chain’s denial of the allegations, litigation continues.
In an attempt to settle the matter, a conference was held on Friday, March 18, before Magistrate Judge Ramon E. Reyes, Jr. between counsel for Gilead Sciences and the Safe Chain defendants and their counsel.
According to a federal docket entry, the case was not settled then because the parties were “too far apart.” Both may request another settlement conference with the court at a later date.
Safe Chain and Gilead declined to comment on the settlement conference due to its confidential nature. The confidential information discussed generally includes the parties’ demands and settlement offers.
However, if a settlement is reached, it’s likely to be a significant amount.
The burden of that significant amount is what the Boyds described as a David vs. Goliath situation, with Gilead attempting to “grind” their small business “into the dust,” Charlie Boyd said. While Gilead is a billion-dollar pharmaceutical manufacturer with primary concerns for ensuring patient safety, according to Mayall, the possibility for a significant settlement amount is likely in order to deter future counterfeiting.
“What we’ve done is to signal that this type of behavior is unacceptable,” Mayall said. “You should not put patients in this type of danger, and so an aspect of our litigation is to have a deterrent impact. We don’t want this to be a slap on the wrist.”
Natalie Jones is a reporter at The Star Democrat in Easton covering crime, health, education and Talbot County Council. You can reach her with questions, comments or tips at [email protected].
