Stolen Prescription Drugs: How Common Are Heists?

In a widely reported incident, thieves broke into Eli Lilly and Co.'s Enfield, Conn., warehouse last Sunday and made away with about $75 million worth of antidepressant pills and other prescription drugs. The thieves waged a high-tech assault on the warehouse, cutting a hole in the roof and rappelling inside, where they disabled the alarms and removed enough drugs to fill at least one tractor-trailer—tactics more reminiscent of Hollywood action-adventure movies than newspaper headlines. The incident, believed to be one of the largest prescription-drug heists ever, is currently being investigated by the FBI and local law enforcement, although no suspects have yet been identified. The case captured national attention in part due to its audacity and scope, but also due to the unlikely target. Since when have prescription drugs been the target of master criminals?

NEWSWEEK's Ian Yarett spoke to Dan Burges, the director of intelligence at FreightWatch International, a security firm that tracks cargo theft, to get more context on these kinds of crimes.

How frequently do prescription-drug heists occur?
In the early part of the last decade, there was some pharmaceutical theft going on, but there wasn't a lot of attention placed on it. But in 2005 and 2006, it really took off. We reported 35 pharmaceutical thefts in 2007, and 46 each in 2008 and 2009. Thefts from trucks are most common; only three of the 2009 incidents were warehouse thefts. There have been 10 pharmaceutical thefts thus far in 2010, including the most recent Eli Lilly one.

What does this amount to in the grand scheme of things?
Well, 46 total pharmaceutical cargo thefts aren't a huge number compared to, say, electronics thefts, which might occur 150 times over the course of a year. In our database, pharmaceutical thefts made up only about 5 percent of the total volume of theft incidents in 2009. But in terms of monetary value, pharmaceutical theft is astronomical. Cargo theft in the pharmaceutical industry in 2009 amounted to an average of $4 million per loss. The only thing that even comes close to that is the cell-phone industry, which averaged just over $2 million per loss.

Where do the stolen drugs generally end up?
In the United States, the most common route is down to South Florida, the Miami-Dade area. Then, drugs are shipped to Latin America, or sometimes Asia, often for sale on the black market and/or for counterfeiting purposes. There have also been reports of product being repackaged and reintroduced into the U.S. market or into other areas. In other cases, drugs are sold directly in the U.S. market, typically through nefarious online retailers. But I think it's pretty unlikely that a U.S. hospital or pharmacy would acquire stolen pharmaceuticals.

Does this kind of prescription-drug theft happen as frequently in other countries, especially ones with cheaper prescription drugs?
Drug-cargo thefts are common in Latin America, Brazil, Argentina, and Mexico, maybe not quite to the extent we see in the U.S., but still quite common. In Europe, historically, this is far less common, especially since so many prescription drugs are very cheap or free, although we have been beginning to hear more reports of drug theft in Western Europe, primarily with stolen goods being moved east.

Which places have the biggest black markets?
I think the default answer to that is Latin America, looking at Brazil, Colombia, Central America, Argentina, etc. Costa Rica is actually pretty notorious for black-market products, [including but not limited to] pharmaceuticals.

How do thieves decide which drugs to steal? What's worth the most on the black market?
Cargo theft in the United States is by and large a theft-to-order type scenario. There are people who make their living brokering loads of stolen goods—often we see that thieves have a buyer lined up, or potentially have even sold pharmaceuticals or other goods before they've even been stolen. These cargo-theft gangs do research, find out where a particular product is being manufactured or distributed from, dispatch a team to that location to conduct surveillance, and then either steal the goods on the road from trucks or, as in this recent case, from the warehouse. A few years ago, it was a bit more potluck—thieves would kind of hang out at truck stops, steal whatever they could, and then determine whether or not they could sell it. Whereas now, they steal what's popular, because then they're going to be able to sell it to the consumer for a cheaper price and ultimately make money off it.

Historically, are stolen drugs ever recovered by the manufacturers?
Last year, of the 15 or so pharmaceutical thefts that were over a certain [monetary] benchmark ... some of the drugs were ultimately recovered in more than 80 percent of the cases, through various law-enforcement techniques.

What happens to recovered drugs? Are they considered safe for distribution, given that they could have been tampered with?
Almost exclusively they are destroyed. And that magnifies the economic impact of pharmaceutical theft—if a pharmaceutical company produces a particular product of a particular lot number, often the FDA requires that they recall and destroy all of that lot number, even from shipments that weren't stolen.