The Philadelphia Inquirer has the first in a series of articles about an illegal prescription drug network that was busted in 2005, as part of “Operation Cyber Chase.” The ringleaders of the network were the Bansals, a family based in India, though part of the business was run out of a warehouse in Queens.
Here’s how the business worked:
Akhil [Bansal] oversaw the family’s North American operations, shipping roughly 75,000 pills a day via UPS. In a little more than a year, the network had smuggled 11 million prescription tablets to more than 60,000 American addresses, an operation that grossed at least $8 million. These numbers did not include the steroids or the kilo shipments of the tranquilizer ketamine, a club drug called “Special K.”
The family’s Internet business represented a dark slice of the global economy so new, and so widespread, that national governments were still struggling to understand it, let alone police it.
Laws were vague, outdated, inconsistent. Technology – new medicines and ways to deliver them – was outpacing regulation. (link)
Unlike Operation Meth Merchant, where a number of the defendants pleaded guilty because they were going to be deported anyway, these guys clearly knew exactly what they were doing, and what they were doing was definitely illegal. In contrast to Operation Meth Merchant, which disproportionately targeted Indian immigrant store clerks, I’m not at all bothered at the take-down of the Bansals — they deserve to be in jail. Rather, it’s an intriguing case study that shows yet again how India’s entry into the globalized, internet-based economy goes well beyond the rosy picture suggested by talk of outsourcing and call centers.
At the same time, I don’t think the Bansals are especially “evil” for smuggling imitation prescription drugs, though it’s definitely dangerous for these drugs to be floating around. (According to NPR, at least one person died after purchasing drugs from a website based in Mexico.) If anything, the Bansals were evil because their business was based on spam, which wreaks havoc with email and is the bane of many a blogger’s existence.At its peak, the drug network was a multimillion dollar business. Akhil Bansal, who was 26 at the time he was arrested, was doing an MBA at Temple. According to the Inquirer, he had about $400,000 in his checking account. The DEA had been investigating the case for five months, and cooperated extensively with Indian police in Delhi and Agra (where the Bansals have a second house) to bring down the family.
The Inquirer has created a special website for the series, go.philly.com/drugnet. You might want to check back to the site over the next few days to see what happens to Akhil Bansal and family after the DEA gets ahold of them. [Update: See part 2 of the story here.]
More info: USDOJ press release (PDF)
DEA Article summarizing the drug ring and the arrests made, all around the world.
I agree with most of your points except this one; “Rather, I find it to be an intriguing case study that shows yet again how IndiaÂ’s entry into the globalized, internet-based economy goes well beyond the rosy picture suggested by talk of outsourcing and call centers.”
Imho, India’s entry into the globalized economy is orthogonal to this issue, since crime by Indians has thrived whenever there are barriers – immigration, export or arbitrage-profits. Historically, criminals from India have thrived from regulation. I do realise that you are trying to make a point on the dark side of internet-based trade, but this particular crime would’ve taken place even in the absence of India’s participation in the global economy. Ironically, one could argue that if the barriers to entry for pharma in the US were not so high, such smuggling would reduce. As long as the costs of drugs in the US remain high, consumers will seek alternatives and bootleggers (can’t think of another term) will always be in business.
Profiteering drug corporations drive customers underground. Guy on a student visa runs this underground network across timezones to exploit their helplessness. I smell a movie!
The barrier is not just the price of the drugs but also that the drugs should be prescribed by a doctor. US govt controls (through FDA and medical profession) who can take what drugs. This has benefits but it also make smuggling possible. Allowing cheap imports alone would not eliminate smuggling.
Quizman, one of the interesting things about this case is the fact that these guys were actually charging above market rates for things like Viagra. The idea being, of course, that there are lots of people out there who want Viagra who don’t want the hassle of proving impotence to a doctor to get a prescription. Interestingly, it was the higher prices that made the DEA investigator guys suspect something fishy was about.
It is, as you say, a crime driven by the regulations — only not price regulations in this case.
What makes it different is the internet factor.
Prateek, I agree about the movie idea. Only I think they will have to make the guys much more stylish and hip. And furniture! This guy had $400K in his bank account, and didn’t even seem to own a couch, judging by the picture…
Amardeep –
“I find it to be an intriguing case study that shows yet again how IndiaÂ’s entry into the globalized, internet-based economy goes well beyond the rosy picture suggested by talk of outsourcing and call centers.
I would not pass judgment on the entire Indian tech (not the “internet based economy”) industry, based on one isolated incident, where an Indian citizen fulfilled a demand (most consumers of internet pharmacies tend to be people sans health insurance), albeit illegally.
p.s. by doing a quick check on the web, I found out that for the most part, the DEA has managed to shut down or strongly curb the illegal internet prescription drug trade.
well, they’re definitely creative, aren’t they?
i’m not sure that the scenario painted by outsourcing and call centres is actually all that rosy, though. while globalization is helping women gain an active role in the workforce, call centres are working their employees to the bone. oprah recently did a show (ok, she may not be the most reliable source) about mothers around the world, and she showcased a mother of a young son in delhi who worked throughout the night. she was only able to spend about one hour a day with her son. perhaps outsourcing and all its hoopla is contributing to the decline of the family unit in india?
i spent last summer in bangalore and was able to wander around koramangala. i spotted a sign near one of the indus campuses reading “work harder. greed is good.” i’ll let you draw your own conclusions.
Amardeep: Of course, if Bollywood chooses to take up the project it would be necessary to throw in several new elements. The officer in India would be a poor, honest hardworking man with a blind mom. His dad was killed 20 years ago when he refused a bribe from the villain’s dad (but he doesn’t know that yet). You’d also need to add a love interest for the officer, plus a vamp/item-girl who works for Akhil’s gang.
Getting back on topic – Kritic: the latter half of the article indicates the DEA doesn’t have much experience with such drug stores.
Kritic, I’m not passing judgment on the Indian IT industry, which I actually strongly support. Anyway, this is really more medicine/pharma than IT (Akhil Bansal’s father is a physician in Agra, and undoubtedly his own proximity to this industry must have been a factor in the idea’s inception).
Rather, I would simply argue that stories like this should be included when we think about the “big picture” of growing transnational trade in light of the currency/buying power gap. There are people who are coming up with brilliant ideas for how to make a buck using the accessibility afforded by the internet and ultra-efficient services like UPS. In some cases the ideas are so brilliant they aren’t even legal.
One other point: it seems that most of the drugs people are buying this way are either “lifestyle” drugs like Viagra, Levitra, Cialis, etc., “party” drugs like Ketamine, or mis-applied pain-relievers like Vicodin. (Ambien is also mentioned.) These are mostly recreational drug users, not people without health insurance.
Exactly. Rush Limbaugh could be one of Bansal’s clients.
Prateek, to stay off topic just a bit longer– the film you’re describing sounds very 1980s. In today’s Bollywood (think Ab Tak Chappan), the Indian policeman should actually be borderline corrupt (or trying to recover from corruption?). At any rate, he should have his hands a little dirty. And yeah, maybe he too has a bit of an addiction to pain killers since he was shot in an “encounter” in the late 1990s (change the scene from Agra to Bombay).
He gets contacted by the American DEA and ends up catching the drug smugglers almost by accident when he realizes the people who have supplied him for years are the same folks who are now making millions shipping product to the U.S. He gets the smugglers (who are all played by up and coming B-wood stars) put away in jail, but he pockets a couple of crates of Vicodin for his own personal use at the end.
Ok, maybe a little too ahead of its time… Your version would be more “Rang De Basanti”; mine is more R.G. Varma.
Selling ketamine is not very nice. Some people just use it to get high, but another application is as a date rape drug…
Regarding what namitabh bachchan said at #6:
I have family members that work in the outsourcing business (not call centers, high level technical support). Without a doubt, I would consider that industry almost the sweatshop equivalent in high tech. The micro-management of personnel is old school and they are driven hard (TheRegister.co.uk). They are put up in hostels, bussed back and forth and on more than a few occasions don’t go home at night. The family member that works stateside for the client is expected to be available 24/7 for support and discussion (clients who are stateside and the developers in India). I have a friend with a US degree who works in India. He once flew in from B’lore to make a presentation to a client in Chicago and flew back out within 24h to go back to work in B’lore.
Since they choose this life and they are paid very good wages by Indian standards, they shouldn’t complain. If you consider the reality after graduation for any college graduate in India who doesn’t have a technical degree, all you need is the capacity to speak English. You are given a salary of about 10-15 thousand rupees a month and set to work. Thats pretty sweet. If you get through the first few years you can sell yourself to another company (apparently churn rate for employees is quite high (IHT article from last year)) for a fat raise too.
To paraphrase Donna Summer, they work hard for their money. And according to the published reports, so did our drug dealer. Full time MBA and a multi-million dollar drug smuggling business? And people complain about the time it takes to run blogs! 😉
–> What has Bansal, who lives in the US; sells pills for a living, and has US customers got to do with Indian outsourcing and the BPO sector? I don’t mind constructive criticism at all but this one seems odd. It reminds me of a kid who would write English composition about a cow irrespective of the topic at hand. A composition on Taj Mahal would entail the taj mahal –> the lawn –> green grass –> and then the cow grazing on it. I am not saying you drive everything to the same point in all your posts but you get the drift.
….It does? Are there hordes of Delhi-based “South Asians” shipping drugs out to the New World? Are all of the college grads doing this now, as opposed to finding jobs which are a tad more conventional? Wow, one oddity of a news article and all of a sudden there’s a whole dark-side. Interesting. And then we have the “rosy picture” suggested by outsourcing and call centers. Set up the straw man, and then tear it down…
Why yes, let’s ban outsourcing and call centre work. Because it’s better to keep people in villages so we can continue to produce village idiots in abundance. God Forbid that anything which is remotely postive in India be left to remain so. It’s possible positive effects must be mitigated with as many negative stories as possible. It must be cancelled out. People are exporting drugs from India, I tell you! The decline of the family! People being forced to work to make a living! The shame of it all I tell you. We are a 5000-year old civilization which fears change. It is better to let those call-centre ooolies languish on street corners so that they can pick my pockets and molest my sisters/daughters/mothers/girlfriends/wives than do anything remotely constructive. Long Live South Asia.
I actually went to school with Akhil, the picture here is not a testimony to BansalÂ’s extravagance, in addition to $400K in his checking account he was reported to own four cars including a Benz. He had actually roped in another Temple student; Atul Patil who was arrested last year with him and both were being held in the federal prison in Philadelphia. Last we heard was that Patil decided to cooperate and was extradited.
Detail of the release from the department of justice
Propeller,
Didn’t we already discuss this in earlier comments? The connection is the internet-based economy and the globalized supply chain. Outsourcing is only one part of that larger phenomenon. So is this new kind of smuggling, which is partly based in India (Bansal’s father, the leader of the organization, is based there, and the supply chain starts there).
Phoenix, there are lots of dark sides to globalization that are well established: lots of people get left behind. I’m still in favor of it — if you read my posts, you’ll see that I’m no communist — but I think it’s important to present a balanced picture, and not simply accept the prevailing hype.
Brown, wow, thanks. That makes more sense: here he looks like a grad student trying to save a few bucks by not buying any furniture.
I have bought thousand of rupees of generic drugs in India for ailments. I wanted to make a point that the drugs that were sold here were not fake (chemically). They were the generic versions of the expensive stuff that is sold here. I think that was what the dad in India was counting on. He was “legitimately” buying these drugs and exporting them stateside (which is where he came afoul of the local authorities). Of course the special K, hydrocodone tabs and their ilk are probably completely for the illegitimate market (rush limbaugh comes to mind). I don’t know about the others.
When the WTO agreements kick in, then the concept of cheaper drugs from reputable Indian manufacturers will be put paid to.
JayV: SOme of these drugs may have been illegitimate even in India. i.e. you need a prescription to buy most drugs in India. The local mom and pop store usually has a tie-in with the neighbourhood doc. I doubt if you can buy prescription medicines in buik overground. Perhaps, a doc can clarify whether the medicines mentioned in the PhilEnq article were prescription or non-prescription medicines in India.
Amardeep – good point on regulation & higher prices. I had missed that side of the story.
“In some cases the ideas are so brilliant they aren’t even legal.”
brilliant line, amardeep.
Quizman: The standard nursing home in India usually has a captive pharmacy (massively profitable) attached to it. Daddy doc had his nursing home so a supply bulk drugs (prescription or otherwise) were not an issue in this case.
Even at the retail level, in India, most prescription medication is not given the once over as stringently as it is in this country. You walk up to the counter handover a piece of paper with the names of 4 drugs on it and you will most likely be given the drugs. I think narcotics may be a different story though.
You are probably using the words “supply-chain” very loosely here. I am no jingoist either and I think this Bansal fellow deserves the harshest of punishments. That said, all outsourcing phenomena require some kinda supply-chain somewhere but not all supply-chains qualify as outsourcing. Bansal’s story has nothing to do with the following:
You style of argumentation suggests that Bansal is a byproduct of the internet revolution and therefore, the BPO sector isn’t all that it is hyped up to be. Although there is truth in the statement that the BPO sector is somewhat hyped up, it doesnt lend strength to the argument that this sector somehow has to be blamed for the Bansal activity.
Let us remove the internet from the picture, you think Bansal would not have managed to do this without the internet? So, by that rationale, you have no reason to bring the Internet based Indian BPO in the picture. So your argument is flawed.
Propeller,
You obviously haven’t read the articles in the Inquirer (I posted an update linking to part 2 today). The whole thing depends upon the internet. That’s where the customers are.
Update 3
The articles, while informative, sometimes strike a jarring note.
Why does Baby Bansal whizzing through Agra, have to pass “grimy green buses jammed with lesser castes“?
Has this writer been in India? Taken public transport? I’ve taken many buses in India and have not known the castes of a large fraction of my companions, except of course the brahmins (of which, there were many).
Re#25, the writer most likely meant “lesser caste = people who have to take a grimy green bus.” Indians who care about caste use the term “lower caste” which has an entirely different meaning.
That was apparently a taken from an interview from Boy Bansal. What was actually said, meant, implied or insinuated is any body’s guess. I took it to mean poor people = lower castes.