Questions are surfacing about whether Utah officials budgeted $8 million and spent weeks brainstorming for a plan to mass distribute malaria drugs in violation of state and federal law.
Gov. Gary Herbert last week said officials are scrapping plans to stockpile the medication — an unproven treatment for COVID-19 — and might seek a refund of the $800,000 they had already shelled out for 20,000 doses of the drug from the pharmacy chain, Meds in Motion. It was an abrupt about-face, coming after high-ranking state officials had consistently defended the proposal to amass enough of the hydroxychloroquine drugs for 200,000 coronavirus patients.
But some pharmacists in the state are saying the plan was always fatally flawed, since Meds in Motion does not appear to have the proper approvals to prepare vast amounts of medicine for distribution to the state and other drug stores.
“It’s really surprising how this flew under the radar with nobody else even mentioning that this could be a problem,” Megan Milne, an Ivins pharmacist, said in an interview. “Somehow, Meds in Motion made promises I don’t think they can keep.”
Milne wrote to the state’s Division of Occupational and Professional Licensing (DOPL) alerting them to the potential legal problems and imploring them to “halt this potential violation of state and federal law being funded by precious taxpayer money.”
Her objections just add to the cloud of concerns surrounding the fraught pharmaceutical deal — which is also the subject of a price gouging complaint and internal state legal review.
The Utah Board of Pharmacy alluded to the deal’s potential conflicts with federal law during a Tuesday meeting, as they confirmed that the state would abandon its hydroxychloroquine stockpiling plan. Jeff Burton, who was named last month to head the coronavirus response at the Utah Department of Health, said he’d gotten good advice from the pharmacy board after he began consulting them on the potential purchase. But he acknowledged that getting up to speed in the middle of a pandemic was a challenge.
“I chalk it up to fog of war,” the former adjutant general of the Utah National Guard said about some of the missteps around the state’s hydroxychloroquine proposal. “It’s easy to judge it from an easy chair.”
Federal laws on compounding, or preparing a pharmaceutical treatment for a patient, divides pharmacies into two types. Many traditional pharmacies fall into the first category, 503A, and are only allowed to compound medication for individual patients with a prescription, said Scott Brunner, CEO of the Alliance for Pharmacy Compounding. They are not generally permitted to sell it for other hospitals or pharmacies to use, he said.
On the other hand, a pharmacy that holds a 503B designation can compound medication for other health facilities and are subject to greater federal oversight and an array of manufacturing standards.
There are no 503B pharmacies in Utah, according to a list maintained by the U.S. Food and Drug Administration.
This bifurcated federal system was meant to protect consumers, emerging after a 2012 outbreak of fungal meningitis linked to injections prepared by a Massachusetts compounding pharmacy. More than 700 people fell ill after receiving the injections and 64 died, The New York Times reported.
“People can die is the underlying message, if the current federal and state laws are not followed,” Milne said. “People have died and could die again. Especially when there’s a drug that has been proven to kill people, like hydroxychloroquine.”
Milne said the Utah’s DOPL responded to her complaint with a two-word response — “thank you.” She hasn’t heard from the agency since.
Adam Jones, executive director of the Utah Pharmacy Association, said the state’s professional licensing officials are looking into the issue, but he’s not sure what they’ve found.
"It obviously does raise some concerns as to whether or not [Meds in Motion] is authorized to do that," he said of the state's deal.
Herbert last week declared that the state would be ditching plans to buy 200,000 doses of hydroxychloroquine prepared by Meds in Motion, the same day the Food and Drug Administration warned the drug should only be administered to COVID-19 patients inside a clinical trial or hospital. He also said the state’s initial purchase of $800,000 of hydroxychloroquine happened unbeknownst to him and explained that his legal counsel would be reviewing the entire situation. On Tuesday, he said this review is ongoing.
Speaking to the state’s pharmacy board, Dr. Angela Dunn, state epidemiologist, suggested she was pleased that health officials are no longer pursuing the hydroxychloroquine deal.
"That was my recommendation from the beginning, so I appreciate your support with that," she told the board, adding that there is a "lot of politics" around the malaria drug.
FOX News and friends
President Donald Trump and an array of FOX News personalities were early and vociferous promoters of the drug as a possible treatment for COVID-19, after several small studies suggested it might have promise in fighting the new disease. However, medical experts warned that there was no solid scientific evidence showing the drugs were effective and cautioned against overhyping them.
Still, there was a surge of excitement about the drugs among select state leaders and business representatives, including Meds in Motion’s Dan Richards. He, Senate President Stuart Adams, R-Layton, and other officials convened a March news conference where one occupational health doctor declared the medicine had pulled some coronavirus patients back from the brink of death like Lazarus of the Bible.
Then, earlier this month, the health department confirmed they were in talks with Meds in Motion about buying 200,000 hydroxychloroquine packets and sharing them with pharmacies around the state. The idea was to provide them for free to COVID-19 patients who had a doctor’s prescription certifying they had the illness.
Infectious disease experts discouraged state officials from trying to stockpile the medication and recommended reserving the treatment for patients inside a clinical trial, where researchers could watch for dangerous side effects.
David Pore, government affairs counsel for the Alliance for Pharmacy Compounding, said he’s never before heard of a state acquiring a massive amount of medication from a business like Meds in Motion.
But until Friday, the state seemed undeterred by warnings from health expects. Lawmakers last week carved out $8 million for the state to stockpile drugs, and Burton said he expected to proceed with the medicine purchase even after a Veterans Affairs study found no benefit to hydroxychloroquine.
Richards, founder of Meds in Motion, did not respond to an interview request Tuesday. The state’s health department declined to comment about whether the planned deal to distribute Richards’ medicine would’ve run afoul of federal law, citing the ongoing internal review.
Utah House Democrats are calling for more information about how Meds in Motion received the contract in the first place.
“Utahns were right to be concerned that state leaders would give millions of public dollars to a private company for an unproven treatment during a crisis," they wrote in a letter published by The Salt Lake Tribune. "We still have some questions: What was the bidding process? Why was this particular company selected over others?”
Also on Tuesday, a watchdog group filed a price gouging complaint related to the $800,000 Meds in Motion sale to the state. The Alliance for a Better Utah, a government accountability organization that advocates on progressive issues, asked state consumer protection officials to investigate the purchase.
“Price gouging is an exploitative and unethical practice, especially during a time of crisis or emergency. This is even more true when the goods in question are medications,” wrote Chase Thomas, the alliance’s executive director. “We believe that this attempt to take advantage of a crisis to exploit the use of taxpayer funds should be investigated so that this does not occur again in the future.”
The pharmacy billed the state $40 per drug packet, which each contained capsules of 400 mg of hydroxychloroquine or 500 mg of chloroquine. The resulting cost appears to be well in excess of what most customers pay for these drugs, the alliance’s complaint letter stated.
According to the drug pricing website GoodRx, the nondiscounted price for 200 mg hydroxychloroquine tablets is about $2.95 per tablet, while some discounted prices are as low as 25 cents per tablet.
Erin Fox, senior director of drug information and support services at University of Utah Health, said generic 200 mg tablets of hydroxychloroquine cost between 10 cents and 50 cents at a wholesale level.
The Utah Division of Consumer Protection has received hundreds of complaints for price gouging since the coronavirus outbreak came to Utah, with allegations of higher-than-normal prices for everything from toilet paper and grocery staples to gaming systems and medical supplies.
Utah’s price gouging law applies only in an emergency and only to goods or services that are deemed “necessary for consumption or use as a direct result of events giving rise to a state of emergency.” The statute doesn’t define what’s “necessary,” however, leaving that up to a judge to decide. Each violation carries a maximum potential fine of up to $1,000 and up to $10,000 a day.
In determining whether someone engaged in price gouging, investigators look for baseline costs to compare prices with — including whether the seller sold the good or service in the 30 days before the emergency and at what cost and whether there were wholesale price increases in the cost of obtaining the good or providing the service.
The division has so far filed two citations for price gouging: one against an Ogden resident who allegedly sold N95 masks at a price of $20 each and another against a Nevada company that allegedly price gouged two Utah law enforcement agencies that purchased personal protective equipment amid the coronavirus outbreak.
— Salt Lake Tribune reporter Taylor Stevens contributed to this article