Two owners of a pharmaceutical wholesale company were sentenced last week to a combined 38 years in prison for orchestrating a complex, nationwide drug diversion scheme that harmed vulnerable HIV-positive patients, placed countless others at risk and corrupted the supply chain for prescription drugs.
"Patrick and Charles Boyd did not just commit fraud and cost taxpayers millions of dollars," said Assistant Attorney General A. Tysen Duva of the U.S. Justice Department's Criminal Division. "They preyed upon some of the most vulnerable members of our society -- HIV patients who depend on lifesaving treatments to manage their disease."
The brothers founded and owned Safe Chain Solutions, a wholesale distributor of pharmaceutical medications in Maryland. Charles Boyd was CEO, and Patrick Boyd served as a managing partner who oversaw the company's sales division. The evidence presented at trial showed that the two men conspired with at least five black-market suppliers to purchase HIV drugs obtained at steep discounts through patient buyback schemes.
One supplier testified that he purchased HIV drugs from patients on the street, removed the original prescription labels and packaged the bottles in cardboard boxes before shipping them to the defendants. On one occasion, this supplier used a diaper box he found on the street to ship the drugs. Many of these bottles were dirty, unsealed and showed obvious signs they previously had been dispensed.
Pharmacies complained to the wholesaler about their illicit conduct, such as receiving bottles with entirely different drugs in them, as early as August 2020. Despite these early complaints, the Boyds continued buying cheap, diverted HIV drugs from the same black-market suppliers for many months. They also continued selling the drugs to pharmacies, along with falsified paperwork designed to fool their customers and regulatory agencies. Trial evidence established that missing even a single dose of HIV medication can increase a patient's viral load and heighten community transmission risk in areas with high infection rates.
Between April 2020 and September 2021, the brothers bought and resold more than 28,000 bottles of these black-market HIV drugs. They paid more than $92.8 million for the drugs, which they sold to pharmacies for a profit. Medicare, Medicaid and commercial insurers were billed and paid for these illicit drugs. Last October, the Boyds were convicted of conspiracy to introduce misbranded drugs into interstate commerce; conspiracy to traffic in medical products with false documentation; conspiracy to commit wire fraud; two counts of introducing misbranded drugs into interstate commerce; and two counts of wire fraud.
"Their criminal scheme endangered vulnerable patients, put entire communities at risk and undermined the integrity of Medicare and Medicaid," said Scott J. Lambert, acting inspector general for investigations for the U.S. Department of Health and Human Services, Office of Inspector General. "HHS‑OIG will continue working with our law enforcement partners -- and using every tool in our arsenal -- to pursue and dismantle illegal black‑market rings that seek to corrupt the nation's drug supply and exploit taxpayer‑funded health care programs."
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