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Utah pharmacy owner charged with receiving illegal hydroxychloroquine shipment from China

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A pharmacist holds a bottle of the drug hydroxychloroquine in Oakland, Calif., on April 6, 2020.

Ben Margot, Associated Press

SALT LAKE CITY — The owner of a Utah pharmacy who made a deal to sell the state thousands of doses of hydroxychloroquine as a treatment for COVID-19 now faces a federal charge for receiving the controversial drug from an unregistered manufacturer in China.

Daniel Kevin Richards, the CEO of Draper-based Meds in Motion, is charged with one misdemeanor count of receipt of misbranded drugs in interstate commerce in U.S. District Court in Salt Lake City.

Richards received 50 kilograms of chloroquine and more than 500 kilograms of hydroxychloroquine around April 8, 2020, according to court documents. Investigators say the product was falsely labeled as boswellia serrata extract, a resin taken from the bark of the boswellia tree grown in India, North Africa and the Middle East used to treat inflammation.

The manufacturer of the hydroxychloroquine, which is not named in the court documents, is not registered with the Food and Drug Administration.

Richards’ attorney, Greg Skordas, said the misdemeanor charge came as the result of months of negotiation with the Department of Justice.

At the time, hydroxychloroquine was being touted as a potential treatment for the coronavirus and many state leaders were understandably anxious to get Utah on top of the issue by trying to obtain enough to help the entire state, Skordas said. Had it been proven effective, he said, it would have been incredibly helpful to Utah.

“A lot of very knowledgeable people wanted the state to be prepared once the drug received approval, but we now know that never came. No one thought they were breaking any laws. These people thought they were saving lives,” Skordas said.

President Donald Trump touted and took hydroxychloroquine as a protection against the coronavirus, despite warnings from his own government that it should only be administered for COVID-19 in a hospital or research setting due to potentially fatal side effects.

Utah bought $800,000 worth of the anti-malarial drug from Med in Motion last April, a deal that soon raised red flags among pharmacists, medical professionals and some state lawmakers. The left-leaning Alliance for a Better Utah filed a price-gouging complaint against the pharmacy over the 20,000 doses it sold to the state.

After an internal review of the deal, the state determined that a supply of chloroquine/hydroxychloroquine was no longer prudent, and sought and received a refund from Meds in Motion.

Richards said at the time that the transaction was done in good faith and that the sale was legal, and accusations of price gouging were unfounded. He said the state would have been given a more than 50% discount in the custom compounded drugs.

Meds in Motion spent close to $1 million stockpiling chloroquine and hydroxychloroquine. Richards said at the time that the pharmacy planned to take a loss and donate the medication to charity to address a worldwide shortage of anti-malarial medications in developing countries, including Africa.