Johnson & Johnson tracks down maker of phony diabetes test

By Allan Dodds Frank and Lisa Rapaport Bloomberg News

Published: August 16, 2007

Potentially dangerous copies of the OneTouch Test Strip sold by Johnson & Johnson’s LifeScan unit surfaced in U.S. and Canadian pharmacies last year, according to federal court documents unsealed in June but only recently discovered by Bloomberg News.

Court filings disclose, for the first time, that China is the source of about one million phony test strips, which have turned up in at least 35 states and in Canada, Greece, India, Pakistan, the Philippines, Saudi Arabia and Turkey.

Johnson & Johnson, the world’s largest consumer-health products maker, learned of the counterfeit tests after 15 patients complained of faulty results last September.

Tipped off by Johnson & Johnson, which is based in New Brunswick, New Jersey, the U.S. Food and Drug Administration issued a nationwide consumer alert in October without disclosing the link to China. While no injuries were reported, inaccurate test readings may lead a diabetic to inject the wrong amount of insulin, causing harm or death, the agency said.

Fake medicines are a $32 billion global business, said the World Health Organization, and the Food and Drug agency said it had run 54 counterfeit investigations in 2006, almost twice as many as in the year before.

“Growth in counterfeit medicines and devices is probably the biggest health threat besides infectious disease,” said Peter Pitts, director of the Center for Medicines in the Public Interest in New York and formerly an agency official investigating fake drugs.

“The source was from China, through Canada, to the United States,” said Steven Gutman, director of the Office of In Vitro Diagnostic Devices and Evaluation at the agency in Rockville, Maryland, referring to the phony test strips. “As far as we can tell, the counterfeiter has been put out of business in the U.S.”

The court documents show, also for the first time, a worldwide distribution chain discovered in the past year by investigators hired by Johnson & Johnson. The trail, initiated by consumer complaints to a LifeScan hotline, first led detectives to 700 pharmacies where the products were sold, then to eight U.S. wholesalers and then to two importers, one in the United States, who was tracked down in a hotel room in Las Vegas, and another in Canada.

Records seized from the importers show the counterfeit strips were bought from Henry Fu and his company, Halson Pharmaceutical, which, according to its Internet site, is based in Shanghai.

Halson’s Web site says that the company distributes and manufactures medical supplies like syringes, and is run by Fu, who, according to a court order, is also known as Su Zhi Yong. Fu was arrested by the Chinese authorities and remains in prison in China, awaiting resolution of his case in the People’s Court of Shanghai.

LifeScan sells a variety of strips under the OneTouch Ultra and OneTouch Basic Profile names. The test sells in the United States without prescription for about $1 per strip.

Johnson & Johnson officials first learned that corrupted strips were being sold “between Sept. 18 and Sept. 28, 2006, when LifeScan received complaints from 15 customers from various states, including Wisconsin, New Jersey and New York, concerning the same lot,” Johnson & Johnson said in court papers.

On Oct. 5, investigators hired by LifeScan visited three pharmacies in Wisconsin and found OneTouch packages with a lot number not created by the company’s plants in Inverness, Scotland and Cabo Rojo, Puerto Rico, the papers say. On the same day, another investigator, following a call to LifeScan’s toll-free hotline, found a package with the same phony lot number in a Brooklyn, New York drugstore.

“The first box we found, in fact, had a unique lot number,” Potter said at a hearing held July 13 by Judge Sandra Townes at U.S. District Court in Brooklyn. “The counterfeiters counterfeited every element from the original box, except they put a fake lot number. They really did us a favor and we were able to advance this case quite rapidly because of that.”

On Oct. 13, the U.S. Food and Drug agency published its consumer alert and LifeScan issued a press release and notified pharmacists, distributors and wholesalers to watch for packages with four separate lot numbers.

Pharmacists told investigators they had bought the strips from wholesalers who, in turn, said they had purchased the product from Royal Global Wholesale, of Boynton Beach, Florida. That company is run by Jacques Duplessis from his home.

A Johnson & Johnson team raided the Duplessis Boynton Beach home and discovered he was vacationing in Las Vegas. A seizure order from a federal court allowed Johnson & Johnson to take possession of business records from his Las Vegas hotel room.

“My client is very distraught that he was distributing test strips that were alleged to be counterfeit,” said Steven Horowitz, an attorney for Duplessis.

The other importer from China, court documents show, is a Montreal company known as Zoe Diagnostics, owned by Alexander Vega. He worked for LifeScan for nine years and owns another Canadian company called Blue Sky World with Duplessis.

“Our clients reiterate their denial that they ever engaged in the sale of counterfeit product and expect that their position will eventually be vindicated before the courts,” said George Pollack, Vega’s attorney in Montreal.

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