Court Unseals Documents in Gilead Lawsuit Alleging Massive Counterfeit HIV Drug Scheme

Gilead counterfeits

Source: Gilead complaint

The U.S. District Court for the Eastern District of New York yesterday unsealed documents in an anticounterfeiting suit filed last year by Gilead Sciences, Inc. against a slew of defendants who Gilead alleges sold, marketed, and distributed counterfeits of its HIV medications. Gilead’s complaint seeks immediate monetary and injunctive relief, including seizure at certain of the defendants’ premises, as well as relief for trademark and trade dress infringement and trademark dilution, among other alleged violations.

Gilead warned in an August, 2021, press release that it had become aware of counterfeit HIV drugs and explained how to verify the authenticity of dispensed pills. “Distributors not authorized by Gilead to sell Gilead-branded medicine have sold these counterfeits to pharmacies where genuine Gilead bottles have been tampered with a counterfeit foil induction seal or label and contain incorrect tablets,” said the release.

According to the unsealed complaint and memorandum of law, the accused companies sold “authentic-looking bottles of Gilead HIV and other medication to distributors and pharmacies throughout the United States, including in New York City, who in turn dispensed them to patients.” The counterfeiters specifically targeted Gilead’s well-known HIV treatments, BIKTARVY® and DESCOVY®.  Some of the bottles actually contained Gilead’s HIV pills, while others did not. Certain fake bottles included an antipsychotic drug with “potentially serious side effects that require vigilant medical supervision,” and which put unsuspecting patients at “dire” risk, said the complaint. “[A]ll of the purported Gilead HIV medications sold by Defendants were sold with counterfeit documentation that misrepresented the provenance of the medications,” the complaint added.

The majority of the fake medications can be traced to an organized counterfeiting ring led by three individuals: Druhv Ralha, Paul Rosell and Venkata Srinivas Mannava (the “Leader Defendants”). The defendants operated via shell companies and with the help of licensed pharmaceutical distributors who were also part of the scheme. A number of “Marketer Defendants” helped to advertise and sell the fake drugs to pharmacies.

According to the Second Amended Complaint, the district court issued ex parte seizure orders on July 23, 2021, and August 20, 2021. On July 26, 2021, Gilead conducted seizures at two Safe Chain Solutions LLC locations, during which over 1,000 bottles of “purported Gilead product” was recovered from Safe Chain shelves. On August 23, 2021, seizures were conducted at various other locations, including the headquarters and satellite distribution center of Pro Pharma Distribution LLC and a number of residences, where “thousands of bottles of counterfeit Gilead HIV medications” were seized. In all, about $250 million worth of fake pills were sold over the course of about two years. Gilead is seeking punitive damages of no less than $25 million from each defendant.

Gilead counterfeits

Source: Gilead complaint

“This case remains first and foremost about patient safety. Defendants are engaged in a massive scheme to sell counterfeit HIV drugs that pose a serious and ongoing physical danger to the American public,” says the unsealed memorandum of law.

Geoffrey Potter of Patterson Belknap Webb & Tyler LLP is representing Gilead in the case.  According to reports, the defendants deny Gilead’s claims and at least one has said they did not know the drugs were fake.

Some estimates put lost U.S. federal and state tax revenue attributable to counterfeit drugs at $9 billion.



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