Last month, three Florida men were charged with one of the largest heists in Connecticut history, a March 2010 theft of more than $80 million in goods from a warehouse in Enfield.
The thieves climbed onto the roof with ladders, cut through the soft tar, then rapelled down with climbing gear to disable the alarm system from within. Once they had access, they loaded 49 pallets onto a single tractor trailer and drove off before anyone knew they’d been there. It was more than 18 months before law enforcement officers caught up with the goods, cached in a storage unit in Florida.
A different kind of heist
But the haul wasn’t gold or electronics or even painkillers. It was medications, pills used in the treatment of depression, schizophrenia, and breast cancer. It was a different kind of heist, one that law enforcement was struggling to control. In July 2009, the same group of thieves had taken down a GlaxoSmithKline warehouse in Chesterfield, Virginia, walking away with $4.3 million in emphysema medication. That year saw 50 major pharma heists for nearly $200 million in drugs, more than quadruple the figure for bank robberies. But in the five years since, insiders say something’s changed, and the golden age of the pharmaceutical heist may finally be finished.
2009 saw 50 major pharma heists for nearly $200 million in drugs
The thefts first came on to the industry’s radar around 2007, as skyrocketing medication costs made pharmaceutical warehouses a particularly attractive target. Most companies were still inexperienced with physical security, but the surge in high-profile thefts got their attention fast. Even worse than the initial loss was when the stolen pills were resold back to pharmacies, often landing back on shelves in dangerously damaged form. If a medication hadn’t been properly refrigerated in transit, patients could end up using spoiled medicine, with potentially severe consequences.
Faced with disaster, companies had no choice but to tighten up security from every angle — and for the last five years, that’s just what they’ve been doing. If the Connecticut heist had happened today, the attackers would have faced a battery of new obstacles, starting with the pallets themselves. Most shipments of drugs now come with concealed GPS units, which let law enforcement recover shipments hours after the initial theft. Beyond GPS, some companies have begun labeling each pill with a miniscule serial number, allowing investigators to trace stolen medications after the fact. By all indications, the new measures worked. The Pharmaceutical Cargo Security Coalition (PCSC), a trans-corporate group founded in the wake of the wave of heists, says that major thefts cost the industry less than $6 million in 2013, just 3 percent of what the industry faced in 2009.
Major thefts cost the industry less than $6 million in 2013
Reselling has also become more difficult. In 2011, a landmark Fortune investigation by Katherine Eban found illicit pills showing up in mainstream supermarkets like Kroger, revealing how stolen and often spoiled pharmaceuticals can trickle back into the supply chain through middlemen. Part of the allure of prescription drugs was that they were easier to fence than jewelry or electronics. All you needed was an unscrupulous wholesaler, who would sell the shipment to a slightly less unscrupulous wholesaler, who would sell it back onto mainstream shelves. But a host of new laws like the Safe Doses Act, the Drug Assurances and Safety Act, and the Drug Supply Chain Security Act have raised the penalties for wholesalers caught trafficking in stolen pills, making medication harder to fence.
"They go where there's money to be made."
For Tom Hauck, an FBI agent specializing in pharma theft, the most important threshold is whether pharmaceutical theft is easier and more lucrative than other kinds of crime. "Some of them, in their past lives, were drug traffickers," Hauck says. "It all comes down to profit. They go where there’s money to be made." In the past, that drove thieves to pharmaceutical warehouses, but as the defenses ramp up, they move on to an easier score, whether it’s stored tobacco or other kinds of cargo in transit. But for now, medications seem to be well-protected enough to avoid criminal attention.
That’s not to say big-time pharmaceutical theft has disappeared entirely — it’s just moved overseas. Italian law enforcement officials are already struggling with the organized and persistent theft of cancer drugs, as local crime rings catch onto the potentially lucrative racket. The European version of the heists are more serious in many ways, targeting hospitals instead of warehouses and often reselling counterfeit versions of the drugs, but experts say law enforcement is looking to the same tricks to fight it. "The methodologies mirror what’s been happening in the US," says Chuck Forsaith, head of PCSC. "And the victims have been responding with the same tactics."