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Major pharmaceutical distributor probed over illegal drug exports

Alliance Healthcare at center of inquiry into ring that sold state-subsidized drugs abroad

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F. S. M., who has been implicated in the fraud, arrives to make his statement to the Teruel court.

A Spanish provincial court has released details of a five-month-long police investigation into allegations that one of the country’s leading pharmaceutical distributors has been illegally exporting state-subsidized medicines.

Described by the Civil Guard as the largest case of its kind in Spain, Operation Convector is targeting around 38 people, seven small wholesalers and more than 200 pharmacies alleged to be part of a network led by Alliance Healthcare, the country’s second-largest pharmaceuticals distributor, that has systematically “diverted” medicines subsidized by Spanish Social Security and then sold them abroad at black-market prices.

“If the charges are proved, they will have caused serious damage to pharmaceutical laboratories, the national health service, and at the end of the day, patients, because what has been going on could have meant that certain medicines will not have been available,” reads the summary by the investigating Teruel judge, who has recently lifted a gag order on part of its content.

What has been going on could have meant that certain medicines will not have been available”

The investigating judge’s summary

The key to the investigation is Gonzalo Julve de la Iglesia, a 52-year-old pharmaceuticals distributor who works for Alliance Healthcare, who has been speaking on phones tapped by the authorities. He is thought to be a mid-level boss in a mafia-style network that the investigators believes involves a higher level of leadership, whose members have yet to be identified.

In the investigating judge’s summary, Julve de la Iglesia allegedly reveals how the scheme worked, “boasting” to a pharmacy employee in Tarragona of the existence of a “department” within Alliance Healthcare responsible for creating a network of wholesalers used for storing medicines to be sold abroad. Alliance Healthcare has refused to comment on the case.

One of the wholesalers alleged to be involved is Mateprix-Farma, along with two pharmacies, one of which had turned over around €2.3 million in sales with Alliance Healthcare between 2011 and 2013.

Investigators are looking into whether Alliance Healthcare sold subsidized medicines to Mateprix, which in turn sold them back in an attempt to create a paper trail before selling them abroad on the black market.

The Spanish Health and Medicinal Products Agency has called on the Justice Ministry to make the illegal export of medicines a criminal offense

The investigation is also trying to establish whether Cofares, one of Spain’s largest pharmaceuticals distributors, is also involved. A spokesman for Cofares denies the company’s involvement in any wrongdoing, noting: “We are sure that neither Cofares, nor any other major distributor, is involved in these activities; it is impossible.”

Operation Convector continues, with arrests and searches of pharmacies also carried out in Seville, Cuenca and Alicante.

The Spanish Health and Medicinal Products Agency, which is overseen by the Health Ministry, has called on the Justice Ministry to make the illegal export of medicines a criminal offense, on the basis that removing them from the Spanish market could endanger the health of patients dependent on certain pharmaceutical products.

“As it stands, the penal code makes it very difficult to prove that somebody’s health has been damaged. The problem we face is that there could be medicines that do not reach people who are ill, but we cannot prove that this damage has taken place,” says Belén Crespo, the agency’s head.

Last year, the Catalan regional government fined 40 pharmacies for selling drugs subsidized by Social Security to wholesalers in return for lucrative commissions.