The alleged fraudsters include five Germans, two Belgians, a South African, and a Dane from Serbia. One of the Germans is reportedly a pharmacist from the Munich region. The group is said to have earned 17.6 million euro in only 19 months with its illegal gray market dealings.
Within this period of time, the South African suspect purchased large amounts of common medicines from German manufacturers – more than 1,850 Euro-pallets in total. As no price fixing applies to medications outside of the EU, the products were sold at much lower prices than would have been the case within the EU.
In the next step, the medications, which were allegedly destined for police hospitals in Zambia and so-called “health shops” for the poor rural population, were properly exported to Cape Town. Yet only about a third of the pharmaceuticals actually remained in Africa. The fraudsters then re-imported the rest to Belgium via Switzerland using faked papers and labels, allegedly for further transport to Mauritius. Once back in the EU, however, the medications were reportedly re-sold at a high price.
While it is not necessarily illegal to re-import and sell medications in the EU, it is only possible to do so after fulfilling stringent regulations and passing the relevant inspections. The suspects are now facing prosecution by the Hamburg city court for violations of the pharmaceutical and brand rights laws, as well as for organized commercial fraud.
Altogether, 16 criminal charges have been filed. Each of the alleged fraudsters faces a prison sentence of at least one year for each of the charges. Out of a total of more than 1,850 Euro-pallets of gray-market pharmaceuticals, the 240 that the investigators were still able to track and confiscate are to be destroyed.
