A Conspiracy of Warm Boxes: The Story of Canadian Drug Wholesaler SB Medical and their Disregard for Patient Safety

The case against Canadian drug importer SB Medical/TC Medical Group is one of the largest prosecutions of its kind. In 2015, the company and four of its employees were sentenced after pleading guilty to conspiracy and misbranded prescription pharmaceutical charges, according to the U.S. Department of Justice (DOJ). The DOJ press release at the time of sentencing reported that the Toronto, Canada business was fined $45 million, and required to pay an additional $30 million for selling their misbranded medications to over 1,000 U.S. doctors and medical clinics between 2011 and 2014.

The DOJ describes how, “from at least 2011 through 2014, the companies smuggled orthopedic injections, rheumatology infusions, cosmetic devices, ophthalmology products, and oncology drugs into the United States. The non-FDA approved prescription pharmaceuticals were sourced from other foreign countries, including India, Turkey, France, Italy, and other countries. The pharmaceuticals included Lucentis, Mabthera, Botox, Dysport, Euflexxa, Remicade, Restylane, Synvisc, Prolia, Orencia, Orthovisc, and other products.”

According to the DOJ, SB Medical employees regularly used false customs forms, counterfeit labels, reshipment practices that made imported medication appear to be from the United States, and stored sensitive, cold-chain injectable medications in their drop-shippers’ homes and basements.

In April 2015, the U.S. Food and Drug Administration (FDA) published an alert about counterfeit versions of Botox distributed to U.S. doctors’ offices and medical clinics.  Subsequent warning letters sent to doctors and clinics in March 2016 identified SB Medical as the source of the counterfeit Botox.

Thus far 1,227 doctors and clinics in every state except Rhode Island have been sent warnings from the FDA about purchases they may have made from SB Medical.  Doctors and medical offices that received warning letters included plastic surgeons, dentists, orthopedic/sports medicine specialists, gynecologists, ophthalmologists, and heart/circulatory specialists.

Gigi Goddard, a nurse in California, pleaded guilty in November 2016 to receipt and delivery of a misbranded drug. Even after having already received warning letters, Ms. Goddard admitted to purchasing Botox over the Internet for years from Canadian suppliers, including SB Medical.

SB Medical’s cavalier business practices concerning the shipment and storage of highly sensitive cold-chain injectable medications were made clear in their indictment (all quotes taken from indictment):

Email to a drop shipper concerning a shipment of Prolia, a temperature-sensitive injectable treatment for osteoporosis: “This customer claims that the 3 Prolia they received came warm from the U.K. so they want to return it. Can you please schedule UPS to pick it up TOMORROW…? … Do the pickup in the morning between 11 and 2pm-whatever it doesn’t really matter. And it will go back to you, and we will ship it out as soon as it is cold again.”

Email from sales rep concerning a shipment of Orencia, a highly temperature-sensitive injectable treatment used for autoimmune diseases: “Jill ordered 35 orencia last week and only 7 came today and they were warm and all the ice packs melted. She had to cancel a lot of her patients, so as you can imagine she is very upset!”

Instructions to a drop-shipper concerning cold-chain orthopedic treatments like Prolia, Orencia, and Orthovisc: “We should be repackaging all the meds especially the orthopedics because some of the boxes might say that they are coming from the UK or a location that the customer doesn’t know its coming from.”

Email exchange between two SB Medical employees on how to deal with damaged cold-chain autoimmune disease treatment: “Don’t know if this is a problem but one of the boxes of orencia was wet when I took it out of the cooler yesterday.”  Response: “please Refrigerate the damaged box of Orencia, but put it separately from the other Orencia. We have one client or two that doesn’t mind damaged boxes. When we receive an order from them we will send the damaged Orencia.”

Email exchange describing a bait and switch technique used with Orthovisc, an injectable treatment for osteoarthritis knee pain: “U want 125Orthovisc fast? Well let me tell u a trick that might work but doesn’t always. I would have 125 Orthovisc Parcel Forced to your client from Europe. Then tell the client, oopps, for some reason a wrong warehouse shipped you instead of our American branch. The client returns the 125 to NJ by UPS overnight. And u go ahead and ship the SAME 125 Orthovisc back to your client on an overnight basis. Tzvi and [a co-conspirator] refuse to Parcel Force anything EXCEPT the client themselves. This is probably the fastest way for you to get all 125 Orthovisc Fast to your client. Your other option is to wait and wait until there are enough and have to ship 3 times to the client until you fill the FULL order. This is crazy enough to just might work! 🙂 … AND you want to hear a more devious way of getting it there? Well, let’s say your client DOESN’T ACCEPT stuff from Europe and it would be heat out to ship to them so…. Well, let’s say you have a client who DOES accept Orthovisc from Europe so u send it to them, then apologize to them and say ‘Accidently’ the WRONG order was shipped to you I will have UPS pick this up from you… you with me so far???? Then u ship it via NJ to the REAL client on UPS.

KABOOM!!@! Am I devious or am I devious mr. Darius?!?!?!”

Response: “hahahahaha. I just read this whole thing. Genius!”

Email from employee to SB Medical owner, Tzvi Lexier about severe patient reactions to a batch of Botox they had sold: “Hi Tzvi, attached is an image I received from [a doctor] with the reaction from the Botox injections from her 2.18.13 order – SO2087 (we spoke over the phone. She said 5 out of 10 gave clients side effects.  Some clients went to the emergency room because of side effects were too strong.”

Tzvi Lexier, the alleged owner and mastermind of the SB Medical importation scam, is currently in Canada, fighting extradition to the United States, the Toronto Star reports.