BY KEN LITTLE
A Johnson City physician who treated cancer patients with misbranded drugs was sentenced Monday in U.S. District Court in Greeneville to a 24-month federal prison term.
William Ralph Kincaid, 68, was sentenced by U.S. District Court Judge J. Ronnie Greer.
Kincaid pleaded guilty in December 2012 to receiving misbranded drugs with intent to defraud or mislead in violation of the Food, Drug and Cosmetics Act. He faced a maximum term of up to three years in prison and fines of up to $250,000.
MANY LOCAL PATIENTS
Kincaid, who was also placed on one year of supervised probation after release and fined $10,000 by Greer, had many patients from Greene County.
Prosecutors said in court documents that Kincaid was a doctor and managing partner for East Tennessee Hematology-Oncology Associates, P.C., doing business as McLeod Cancer and Blood Center in Johnson City.
The business provided care and treatment for patients with cancer and blood diseases.
Greer allowed Kincaid to remain free on bond pending designation of a facility by the U.S. Bureau of Prisons for him to serve his sentence.
In imposing sentence, Judge Greer told Kincaid his actions were "about greed" and the "motivation was to make more money," according to a news release by the U.S. Attorney's Office.
Greer acknowledged that, while it was impossible to know which patients had received the unapproved drugs, the "emotional harm" to patients from not knowing whether they had received unapproved drugs contributed to the seriousness of the offense, the release said.
McLeod Cancer purchased large amounts of prescription drugs, including chemotherapy drugs.
The drugs were administered through the clinic, and Kincaid sought reimbursement through the Medicare and Medicaid/TennCare programs, along with other health benefits programs, according to court documents.
Beginning in 2007, McLeod Cancer began obtaining drugs from a Canadian business, Quality Specialty Products (QSP).
The drugs had been obtained from foreign sources and had not been approved by the U.S. Food and Drug Administration (FDA) for distribution or use in the U.S.
After nurses at McLeod Cancer raised concerns in late 2007 and early 2008 about chemotherapy drugs with foreign labeling, the clinic stopped ordering drugs from QSP.
In August 2009, Kincaid and Michael Combs, McLeod Cancer's business manager, met with a QSP representative and began ordering misbranded unapproved drugs, court documents state.
SHIPPED TO BUSINESS
Kincaid directed Combs to have the drugs shipped to a storage business in Johnson City which Kincaid owned in part.
The drugs were received at the storage business and then taken to Combs' McLeod Cancer office, court documents state.
The misbranded drugs were then placed by a pharmacy technician into the clinic's drug storage and control system, where they were mingled with FDA-approved drugs from legitimate sources.
FDA-approved drugs obtained from legitimate U.S. drug manufacturers and distributors were still shipped directly to McLeod Cancer and not to the storage business, court documents state.
Combs, 32, of Piney Flats, entered a guilty plea last year to receiving misbranded drugs and was sentenced in March by Greer to three years of probation and 250 hours of community service.
Prosecutors said that McLeod Cancer obtained unapproved drugs from about September 2007 to early 2008, and from August 2009 to February 2012.
More than $2 million worth of misbranded drugs were provided to McLeod Cancer patients.
Medicare, TennCare, and other government health benefits programs were billed about $2.3 million for the unapproved drugs, court documents state.
Attorney Guy Blackwell, representing Kincaid, told Greer that his client entered into an agreement with the government and the State of Tennessee to pay $2.55 million in settlement of civil claims under the False Claims Act for false and fraudulent claims for reimbursement submitted to the Medicare and TennCare programs for unapproved drugs.
Kincaid also made an initial payment of $500,000 as part of the settlement agreement, the news release said.
Assistant U.S. Attorney Neil Smith represented the United States.
Blackwell requested probation for his client.
"This conviction sends a message to all medical providers and practitioners that federal criminal penalties await those who distribute misbranded and potentially unsafe drugs, especially those used in cancer treatment," U.S. Attorney William C. Killian said in the release.
"The FDA's regulatory system is designed to protect patients from substances such as these."