Kansas City grand jury indicts 11 in Lipitor scam

A federal grand jury on Wednesday indicted three Midwestern businesses and 11 individuals in a conspiracy to sell illegal counterfeit drugs, including Lipitor, Pfizer's popular cholesterol-lowering medicine.

"Today's indictment has significant national public health ramifications," U.S. Attorney Todd Graves said in a statement. "Tens of millions of dollars in counterfeit, illegally imported and stolen drugs were bought and sold and, ultimately, prescribed to consumers."

According to the indictment, the co-conspirators purchased genuine Lipitor and Celebrex, an arthritis drug also made by Pfizer, intended for distribution in South America and illegally imported them into the United States, repackaging them with altered labels.

They also made counterfeit versions of those popular drugs and Procrit, a drug made by Amgen used to treat anemia, along with other drugs.

The investigation began in 2002 and played a role in the 2003 recall of more than 18 million Lipitor tablets.

Counterfeit medicines may contain the incorrect dose, the wrong ingredients or no active ingredients at all, making a potentially serious threat to patient health.

Graves said the scheme involved secondary wholesalers, who buy and sell drugs to and from each other and also sell drugs to hospitals, clinics, doctors and pharmacies.

The defendants include Douglas Albers of Leawood, Kansas, owner of Albers Medical Distributors Inc., H.D. Smith Wholesale Drug Company, an Illinois corporation, and Richard K. Rounsborg of Kearney, Nebraska, and his company Med-Pro Inc.

The nine other individuals indicted are from California, Florida, Pennsylvania, Alabama and New York.

From May 2002 to April 2003, more than $42 million changed hands as part of the scheme, prosecutors said.

None of the defendants or their attorneys, could be reached for comment.