Company At Center Of Utah's Abandoned Hydroxychloroquine Purchase Has A History Of Violations | KUER 90.1

Company At Center Of Utah's Abandoned Hydroxychloroquine Purchase Has A History Of Violations

May 7, 2020

The pharmacy that Utah contracted with to buy controversial malaria medications to treat COVID-19 has a history of problems identified by state investigators and inspectors, according to interviews and records obtained by KUER. 

The most recent issue has locally-based Meds in Motion at risk of losing one of its state licenses following a 2019 inspection that found serious violations at the company’s Draper operation. That facility went on to produce 20,000 drug treatments targeted at COVID-19 for which the state paid $800,000. 

In a letter dated Jan. 7, state officials notified Meds in Motion that the company had nine months to correct the violations.

“If you are not able to demonstrate competence in the practice of pharmacy, the Division will decide whether to provide you additional time to get in compliance or to deny your application,” the letter stated. “If your application is denied, you will be required to immediately cease the practice of pharmacy.”

Instead of approving the license, the state Division of Occupational and Professional Licensing, which oversees pharmacies in Utah, issued Meds in Motion a conditional license for its compounding pharmacy, which makes medications tailored to individual patients with prescriptions.

The license functions as a temporary approval for a pharmacy to operate until it demonstrates its practices follow state law. By policy, the licensing division issues a conditional license to a new pharmacy or an existing one operating at a new location. In some cases, a conditional license is issued to a pharmacy that has not fully passed inspection, as with Meds in Motion’s Draper facility, according to the Division of Occupational and Professional Licensing. 

In June 2019, inspectors documented a range of violations, including a lack of written standard operating procedures, improper cleaning and hygiene, poor recordkeeping and other issues around quality assurance.

But inspectors’ concerns about the company weren’t isolated to that inspection, state records and interviews show. 

Launched in 2013, Meds in Motion now has multiple locations in the Salt Lake Area and in Utah County, including its headquarters in Draper. The company has received at least four citations in the last two years –most recently February 2020 — for unlawful or unprofessional conduct, according to a state Department of Commerce database. 

Those citations, which include a medication error, pharmacy violations and unauthorized practice, resulted in fines of more than $4,000. The medication error, for instance, involved sending the wrong prescription to a patient, who didn’t end up taking the drug, interviews show. 

The state fined Meds in Motion more than $4,000 because of unlawful or unprofessional conduct.
Credit Screenshot | Department of Commerce website

Due Diligence

It appears none of this was taken into consideration when the Governor’s Office of Management and Budget paid $800,000 in early April for 20,000 treatments of hydroxychloroquine and chloroquine for COVID-19 patients. The state Department of Health officials also did not appear to flag that concern when they were negotiating the purchase of 200,000 more treatments. Both of the deals have been spiked and the company has returned the state’s money. 

“To our knowledge, the Utah Department of Health was not aware of the conditional license,” department spokesperson Charla Haley wrote in an email. 

Anna Lehnardt, a spokesperson for Gov. Gary Herbert, said the governor’s office was also unaware of the company’s citations, fines or conditional license before the purchase. Once the office learned of the licensure issue, it started inquiring about a refund, Lehnhardt said, but she could not immediately provide a specific date or documentation of when that happened.

According to internal emails obtained through a public records request, the Division of Occupational and Professional Licensing, or DOPL, doesn’t appear to have been consulted until after state officials and lawmakers announced on March 20 a plan to acquire the medication through Meds in Motion. 

"In the discussions about the state's procurement of pharmaceutical products during the COVID-19 pandemic in which the Department of Commerce and DOPL have been involved, we have consistently sought to ensure the safety of any supplies the state was to purchase," Department of Commerce spokesperson Brian Maxwell wrote in an email.

According to emails obtained by the Salt Lake Tribune, a pharmacy regulator reviewing Meds in Motion’s plan to sell the medication to the state warned the company that it would be in “violation” and cited. The company’s CEO reached out to powerful lawmakers and, in turn, high-ranking officials with the Department of Commerce stepped in.

In text messages to KUER, Meds in Motion CEO Dan Richards said his company has no citations as those were for a now-closed Meds in Motion pharmacy location. He pointed to a different state database that shows no pending disciplinary action.

“So there is conflicting data,” he texted.

As for the conditional license, Richards said he’s addressed the issues and is preparing to respond to the state. 

“Meds in Motion is compliant with all the topics addressed,” he texted. 

Richards also downplayed the citations and blamed three of them on a former employee who did not properly close the pharmacy when it moved locations. Richards declined to name the employee, but said the person was “in charge of regulatory.” 

Jacob Corsi, a former state pharmacy investigator, worked as the company’s director of regulatory affairs from May 2017 until December 2018. He said he was one of several mid to upper-level managers — including both the company’s first CEO and chief financial officer — who left Meds in Motion because of Richards’ business practices. 

Corsi said that under Richards, Meds in Motion was regularly at odds with different vendors, among other issues, which six other former employees confirmed in interviews with KUER.

For instance, the company commonly mailed prescriptions to the wrong patients, he said. For that, the state had sent multiple warnings, known as a letter of concern. The Division of Occupational and Professional Licensing denied a public records request by KUER for those letters, saying they are “protected” under state law.

For Corsi, the continued issuance of a conditional license in this case raises red flags that state officials should have known about before doing business with Meds in Motion.

“They obviously didn’t do their due diligence at all in this case,” he said, adding that acontinued conditional license is “basically saying ‘We don’t think you’re suited to be trusted yet.’ That’s bad.”

But Duce Stoddard, a former staff pharmacist who worked for Meds in Motion from 2015 to 2019, said he never saw any problems when he was employed there. 

“It was a good company,” he said.

It’s rare for a licensed pharmacy to be at risk of having its application denied, said Trip Hoffman, owner of Alpine Apothecary in Park City and a member of the state Board of Pharmacy. 

When asked if it was concerning that the state entered into a contract with a pharmacy that has a conditional license, he replied, “Absolutely.”

“We don’t typically see things like this occur and wouldn’t want to see [the Utah Department of Health] go around [the Division of Occupational and Professional Licensing],” he said. “It all seems very political.”