The Other Drug Problem: The Black Market For Non-Addictive Drugs

New York is stepping up its efforts to crack down on fraud and abuse of prescription painkillers—but that’s not the state’s only drug problem.

Even when prescription drugs aren’t addictive or ripe for abuse, they can still be tempting targets for criminal networks, which obtain expensive medications like treatments for HIV/AIDS and resell them for a profit on the black market.

And because the drugs aren’t addictive, the state is even less well-equipped to handle it.

“The regulatory structure is basically set up to prevent the unauthorized distribution of the drugs that are subject to abuse,” said Bridget Brennan, New York City’s special narcotics prosecutor. “There wasn’t really a concept in mind that these kinds of drugs would have a real inherent value. So we’ve seen criminal organizations kind of play with that a lot.”

In one high-profile case, prosecutors this summer charged 48 people in Manhattan federal court in a $100 million scheme to obtain HIV medications and other drugs from Medicaid recipients, who received them cheaply or for free.

Middlemen then repackaged the drugs and resold them at a profit to pharmacists, who could also make a tidy profit, according to prosecutors.

But due to a gap in state law, these kinds of cases sometimes fall through the cracks, say lawmakers and law enforcement officials

In June of 2010, Brennan’s office was investigating what it thought was going to be a large amount of cocaine. Instead it turned out to be a huge supply of AIDS medications stockpiled in an apartment in Yonkers, with a value of over $4.2 million.

“Very likely it was destined for the black market,” said Brennan, who had to refer the case to federal prosecutors—who have few tools to combat such schemes. “But we had no state law under which we could prosecute it. We were very much hampered in our efforts to get to the bottom of it, and if you don’t have any means of prosecuting somebody, obviously you lose all leverage over it. And then you’re not going to find out where the drugs were coming from or where they were going—and it was a huge amount of drugs.”

In response lawmakers introduced legislation in Albany that would criminalize possession and misuse of HIV and AIDS drugs and other medications that aren’t addictive and designated as controlled substances.

State Senators Kemp Hannon and Stephen Saland have championed the bill, saying its passage would fight Medicaid fraud as well as protect patients from taking the black-market drugs, which could be mishandled and tainted.

The two lawmakers held a hearing in 2011 on the legislation. But with the state’s new I-STOP legislation taking center stage this year, the bill was overlooked in the 2012 session.

Brennan, who said the legislation would be a game changer, said she’s hopeful the bill will pass next year.

“It would provide an important tool for us to be able to follow up on these cases,” she said. “It really is a miscarriage of justice if you seize $4.25 million worth of prescription drugs and you can’t do anything about it.”