Kevin Xu was indicted in August 2007 for distributing a range of counterfeit drugs, including versions of Tamiflu, Plavix, Zyprexa, Aricept and Casodex.
These were distributed throughout the US via the internet but investigators also discovered Xu’s counterfeits had entered the legitimate supply chain in the UK.
For these crimes Xu has been sentenced in a court in Texas, US for the maximum applicable period of 78 months without parole. In addition Xu has been ordered to pay compensation of $1.15m to Eli Lily and $130,000 to Pfizer.
Xu argued that there was insufficient evidence that he knowingly traded in counterfeit drugs but the court disagreed and he has been in federal custody since his arrest in August 2007.
The arrest followed a joint investigation by the US Immigration and Customs Enforcement (ICE) and US Food and Drug Administration's (FDA’s) Office of Criminal Investigations.
Agents began investigating Xu in November 2006 and established that he was using a company he established in China, Pacific Orient International, to export and distribute counterfeit drugs throughout the US and UK.
During the course of the investigation Xu handed undercover agents a list of 25 branded pharmaceuticals he could manufacture. Investigators followed up on this and received shipments of numerous counterfeit drugs from Xu.
The drugs and their packaging appeared to be identical to authentic counterparts and it was this quality, coupled with the scale of Xu’s operation that led agents to regard the case as significant.
Despite their appearances chemical analysis of the counterfeits revealed unknown impurities and smaller quantities of the active pharmaceutical ingredient (API) than their authentic counterparts.
Sales records obtained by investigators revealed that Xu had achieved global sales of $1.5m in 2007, $230,000 of which was from the US market.