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Thursday, November 17,2011

Local supplier under fire

By Jefferson Dodge and Joel Dyer

The following is an excerpt from an Oct. 5 letter from U.S. Rep. Elijah E. Cummings, ranking member of the Congressional Committee on Oversight and Government Reform, to Mark C. Snyder, chief executive officer of Superior Medical Supply, Inc., which has a P.O. Box in Superior.

Dear Mr. Snyder:

I am writing to request documents relating to your company’s purchases and sales of the drug paclitaxel, which is used to treat breast and ovarian cancer and is in critically short supply, according to the Food and Drug Administration (FDA).

The Committee is investigating “key areas related to drug safety.” Pursuant to this investigation, I have been working with a network of hospital, pharmacy, and government representatives to investigate the extent to which “gray market” middleman companies are making substantial profits by engaging in a form of drug speculation.

And so the scrutiny begins for Superior Medical Supply, Inc., a local company described as a gray market distributor.

Superior’s facility is not in Superior, actually. It operates out of a Westminster office that has a rear loading dock, and Snyder is listing as having a residence in Erie.

The company is one of five gray marketers in the nation currently being asked to provide information as part of Cummings’ investigation.

In his letter to Snyder, Rep. Cummings outlined reports on the nation’s drug shortages, and notes that paclitaxel in particular was in such short supply that one cancer center was not able to enroll patients into clinical trials because it could not guarantee the drug would be available.

“During the course of our investigation, we have obtained internal documents indicating that your company may be charging prices that are many times higher than normal contract prices for critical drugs,” Cummings wrote to Snyder. “According to information obtained by my staff, a typical price for paclitaaxel is approximately $65 per vial. … In contrast, however, documents we have obtained also indicate that an account representative from your company offered to sell paclitaxel for over $500 per vial, more than 7 times a typical sales price.”

This is not the first time Superior has found itself the target of regulators.

In June 2009, Superior Medical Supply was fined $51,750 by the Colorado Department of Regulatory Agencies for receiving prescription drugs from nine entities that were not registered by the state Board of Pharmacy.

And in December 2009, the California attorney general filed legal action against Snyder and his company through that state’s Board of Pharmacy, accusing them of misbranding drugs with false or misleading labels, disseminating deceptive and misleading information to purchasers, and selling controlled substances in 2008 without being registered with the Drug Enforcement Agency to do so.

In his letter, Cummings has asked Snyder for all documents related to:

• the identity of all companies and individuals from which Superior purchased paclitaxel, the date of each purchase, the quantity of each purchase and the price paid for each purchase;

• the identity of all companies and individuals to which Superior sold paclitaxel, the date of each sale, the quantity of each sale and the price paid in each sale;

• the company’s handling, storage and record-keeping procedures for the drug; • the company’s gross revenues, net profits and compensation of company executives;

• the company’s costs for labor, equipment, handling, storage and delivery; and, • the case filed against Superior by the California attorney general.

Snyder, the CEO, did not return calls from Boulder Weekly and had not provided the requested documents to Cummings and his committee as of press time, even though his deadline to do so was originally Oct. 19 and had been extended to Nov. 14.

“Superior failed to submit any of the requested documentation, even though they originally promised to do so, and even though many of the documents are required to be retained by state and federal law,” committee spokesperson Ashley Etienne told Boulder Weekly. “Superior has also failed to explain why they changed course from their initial statements of cooperation.

“In terms of next steps, we are considering those now, but in the majority of cases the Committee has investigated, we have not had to resort to a subpoena,” she says. “Typically, companies that have nothing to hide are forthcoming and provide the requested documents without compulsory process."

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