December 26, 2024

BOULDER, Colo. — Not far from the majestic Rocky Mountains, lies a nondescript suburb with a tree-lined street and a modest, light-gray home.

This is not what you would expect from Ozempic’s black market investigation. But it did.

A CNBC investigation into counterfeit diet pills uncovered an international illicit market in which criminals either blatantly alter the drugs or ship genuine products from overseas — known as drug diversion, which violates federal law.

The businesses primarily involve counterfeit or illegal versions of Novo Nordisk’s diabetes drug Ozempic and obesity drug Wegovy, as well as Eli Lilly and Co’s Mounjaro and Zepbound. All four drugs belong to a popular class of weight-loss drugs called GLP-1. The surge in demand for treatment has led to criminal schemes seeking to take advantage of the surge.

CNBC purchased a drug called Ozempic from a company called Laver Beauty, which lists its address on its website and in company documents as being on that quiet residential street in Boulder. The drug costs $219 for a one-month supply, a fraction of the $968 list price for a one-month supply of Ozempic in the United States.

The owners of the Boulder home said they have no connection with the company, although they received mail and a 1099 IRS tax form addressed to Laver Beauty.

The drugs purchased by CNBC were shipped via DHL from an office building in Shijiazhuang, China, about four hours’ drive from Beijing. The package that arrived at CNBC’s headquarters in Englewood Cliffs, New Jersey, was a plain cardboard box with no refrigeration other than two melted ice packs. Ozempic should be kept refrigerated. The drug packaging looks authentic, with Chinese text and the Novo Nordisk logo.

Novo Nordisk said in an email that the drug appears to be a “legitimate product produced for and distributed to the Chinese market in late 2023 and early 2024. Therefore, the drug is not authorized/unavailable for the U.S. market.” approve.

The company added that it “cannot confirm sterility, which may increase the risk of infection for patients using counterfeit products.”

Law enforcement sources told CNBC that the Ozempic received from China is part of a larger federal investigation into Ozempic packages shipped to the United States.

Laver Beauty did not respond to CNBC’s request for comment, but a person claiming to be a company representative told CNBC in a WhatsApp chat, “All of our products are authentic. We don’t sell fakes.” The person acknowledged that the products purchased by CNBC were Targeted at the Chinese market.

The representative also said the Boulder address “is the former address of our U.S. warehouse.” The day after CNBC asked for the Boulder address, the address was removed from the company’s website.

fake medicine

CNBC’s purchase of Ozempic is considered illegal diversion of the drug. A separate but related growing problem is the increase in counterfeit medicines—counterfeit medicines that are passed off as the real thing.

In the UK, authorities last year seized hundreds of fake Ozempic pens that had been rebranded as Ozempic.

“We are seeing an increase in demand and, as is often the case with criminals trying to fill the gap in the imbalance between supply and demand for a particular product, we are starting to see genuine counterfeit versions of Ozempic products on the market”, UK Medicines and Healthcare Products Regulatory Commission said Andy Morling, deputy director of criminal enforcement for the bureau.

Andy Morling, deputy director of criminal enforcement at the Medicines and Healthcare products Regulatory Agency, holds a real and fake ozone pen.

CNBC

Morin spoke to CNBC at a warehouse outside London where fake goods are stored. In 2023, a total of 869 fake Ozempic pens were seized.

Drug companies and federal officials say fake diet pills pose serious health risks. In some cases, they can be fatal to the person who uses them.

Eli Lilly, the maker of Mounjaro and Zepbound, said it was aggressively cracking down on counterfeit products.

“We have a very complex and rigorous system for testing drugs before allowing them to be used in patients,” said Dr. Daniel Skovronsky, Eli Lilly’s chief scientific officer. “But unfortunately (the counterfeit drugs) don’t go through that system at all.” Come study the lab president.

Dr. Daniel Skovronsky, chief scientific officer of Eli Lilly and Company and president of Eli Lilly Research Laboratories, displayed samples of genuine and counterfeit Mounjaro.

CNBC

He showed CNBC a sophisticated counterfeit drug labeled Mounjaro but containing an entirely different drug – a drug used to treat type 2 diabetes that does not cause weight loss.

“To the world, it looks like Mounjaro, in a box with a Mounjaro label,” he said. “And its pen is labeled Mounjaro. But it’s not Mounjaro at all.”

Counterfeiters are already trying to cash in on the company’s unreleased weight loss drug, retatrutide. CNBC found it for sale online.

“We’re testing it today in a phase 3 clinical trial. We don’t know yet, but I’m hoping next year when we get those results, we’ll know,” Skovronksy said.

Asked about websites selling what they claimed were retarglutide, Skovronksy said, “Yeah, that’s crazy…even the real retarglutide is not ready for use by patients outside of clinical trials.”

Port seizures rise

It’s common to find counterfeit or diverted Ozempic and other weight-loss drugs in the sprawling international mail facility at New York City’s John F. Kennedy International Airport. Last year, the facility seized more than 60,000 items of counterfeit and illegal merchandise.

Ozempic, Wegovy and other weight-loss drugs were seized at the Kennedy International Mail Facility.

CNBC

Sal Ingrassia, port director for U.S. Customs and Border Protection (CBP) who oversees JFK Airport, said: “Unfortunately, I’m not surprised by any of the new drugs that we see, whether it’s for weight loss medicine or other drugs “We’re going to see them either being diverted, being counterfeited, or being transported illegally through this facility. “

According to CBP, since January 1, the agency has seized more than 198 drugs bearing the Ozempic label. Nine batches of medicines labeled Wegovy and one batch labeled Mounjaro were also seized.

U.S. Customs and Border Protection seizure data does not specify how many of the drugs are genuine and being diverted to the United States or are counterfeit.

Sal Ingrassia is the port director for U.S. Customs and Border Protection at Kennedy Airport.

CNBC

CNBC showed Ingrassia the Ozempic the product the company purchased from Laver Beauty in packaging that lacked the required refrigeration, and he said it was clear the shipment “disrupted the legitimate supply chain.”

“To me, if we saw something like this, we would intercept it and take action. It’s a dangerous product,” he said.

Ingrassia said he expects the number of weight-loss products intercepted this year to double last year.

What happens to seized items? Ingrassia said U.S. Customs is not allowed to destroy them unless they are part of an active FDA investigation because injection pens are classified as medical devices. They are then sent back to the foreign supplier.

Fight against illegal websites

Ingrassia said that in most cases, the transferred products are ordered online or through social media.

“Most of these people are ordering products individually and looking for deals online. There’s obviously a lot of risk involved in doing that. But we’re also seeing doctors’ offices ordering these products,” he said.

To track down sellers of counterfeit or illegally diverted medicines, the pharmaceutical industry has partnered with cybersecurity company BrandShield.

BrandShield CEO Yoav Keren showed CNBC multiple websites that the company flagged and ultimately shut down, including a Facebook account and a TikTok account that impersonated the manufacturer of GLP-1 and sold versions of the drug.

Spokespersons for Meta, the parent company of Facebook and Instagram, and TikTok said their platforms do not allow the sale of prescription drugs and that the companies would take action to remove the listings.

“This is a challenge that cuts across platforms, industries and communities, which is why we are working with law enforcement, regulators and private industry to address this issue,” a Meta spokesperson said in an email to CNBC. “We will continue to invest resources. and further improve our enforcement of such content.

Last year, 250 websites identified by BrandShield as related to counterfeit weight loss products were removed, Keren said, a number eight times higher than in 2022.

“It’s a little bit like whack-a-mole, but we’re chasing them. We’re chasing them, it’s our technology, we’re going to find them pretty quickly,” he said.

Connections with Turkey

Counterfeit Ozempic has been reported in 15 countries, according to the World Health Organization, which issued a global alert in June warning of the health risks of buying counterfeit products.

This is a big problem for the U.S. government.

“We are seeing a lot of diversion of pharmaceuticals coming from Europe and South America,” said Nicole Johnson, national program manager for the IP Coordinating Center to Combat Counterfeiting. “But with the fakes, a lot of the fakes we’re seeing in the U.S. right now are just reused old Ozempic pens — so people can actually just take the original packaging and fill it with saline.”

Nicole Johnson is the National Project Manager for the Intellectual Property Coordination Center.

CNBC

Johnson said the main countries of origin of counterfeit and diverted medicines are India, China, the United Kingdom, Mexico and Türkiye. In Türkiye, government-subsidized medicines fuel the counterfeit drug market, she said.

Istanbul is probably best known for its beautiful Bosporus, surrounded by stunning palaces and mosques. But it’s also one of the centers of the lucrative counterfeit drug trade, according to U.S. authorities who track counterfeit drugs.

“Criminals often find something they can exploit to make more money,” Johnson said. “So these drugs are bought and then sold around the world — something that’s supposed to be helping people, but is being exploited.”

Last fall, Turkish state police conducted raids across Istanbul as part of an internationally coordinated crackdown.

Maziar Mike Doustdar, executive vice president of international operations at Novo Nordisk, also believes that Türkiye has become a hot spot for drug crimes.

Maziar Mike Doustdar is Executive Vice President, International Business, Novo Nordisk, based in Zurich.

CNBC

Dustdahl said the counterfeiters had obtained advanced packaging equipment “comparable to the company’s original equipment.”

“They source their equipment from pretty much the same place that we or our competitors buy their equipment. So they make the packaging look very, very similar to the original product,” he said.

Direnc Bada, an Istanbul-based lawyer representing Turkey’s major pharmaceutical companies, noted that “an increasing number of online channels are promoting these products… and the sale of these products through online channels is effectively prohibited in Turkey.”

Direnc Bada is a lawyer representing Turkish pharmaceutical companies.

CNBC

FDA Alerts, Complaints

In the United States, the FDA announced in a December alert that it had seized “thousands of counterfeit” units of Ozempic in the “legitimate U.S. supply chain.”

When asked about the status of the investigation into counterfeit Ozempic, an FDA spokesman said the initial alert had not been updated.

The risk of purchasing counterfeit medicines can be high. Given the fragility of the formula and the drug’s specific shipping requirements, consuming illegal versions could be dangerous to a person’s health.

“Counterfeit luxury bags are one thing. Counterfeit medicines are another,” said Dustdahl.

Since 2019, there has been a sharp increase in reports of problems with weight loss medications containing semaglutide (the active ingredient in Ozempic) or tezeparatide (the active ingredient in Mounjaro).

“This is a very serious problem for us as a pharmaceutical company and as an industry because patient safety is our license to operate. And you are making fun of people’s safety,” Dustdahl said.

“There are no good fakes,” he said.

—CNBC’s Eunice Yoon and Paige Tortorelli contributed to this report.

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