It’s been a long, strange trip for Oklahoma’s $2.6 million shipment of hydroxychloroquine, bought a year ago as a once-promising treatment for COVID-19.
The 1.2 million doses of the drug normally used to treat lupus, rheumatoid arthritis and prevent malaria were shipped from a California distributor to a small pharmacy in Pryor, with the state paying for the hydroxychloroquine from money borrowed from fees generated by medical marijuana licenses.
The hydroxychloroquine now sits in a warehouse at an undisclosed location, with the Oklahoma State Department of Health reluctant to answer questions about what it will do with the drug or why it went to Pryor. Records obtained by Oklahoma Watch show the drug has an expiration date in December. Meanwhile, lupus and rheumatoid arthritis patients had to navigate a temporary shortage related to a spike in demand related to the drug’s supposed COVID-19 usage.
In the early weeks of the pandemic, former Secretary of Health Jerome Loughridge authorized the purchase of up to $3 million of hydroxychloroquine from California-based FFF Enterprises Inc., according to an April 3, 2020 memo.
At the time, the state was scrambling to secure coronavirus tests, ventilators and personal protective equipment, with the federal government largely leaving states to do their own purchasing of the scarce supplies. Governors were dispatching private jets around the country to check out supply orders. Some even sent planes to China and South Korea to pick up supplies directly from manufacturers.
At the end of April, Loughridge approved another $3 million to purchase supplies in a memo sent to Gino DeMarco, a deputy director at the Tourism Department and a logistics expert who served as the state’s PPE supply chain leader. Loughridge and DeMarco have since returned to the private sector.
“For the avoidance of doubt, this renewal, and the original authorizations before it, is specifically aimed at providing expedited purchasing capacity for particular pieces of protective gear – including, but not limited to, the scarce N-95 respirator mask – that appear on the market rapidly and cannot wait for standard purchasing processes,” Loughridge wrote in an April 27, 2020 email.
In a later interview, Loughridge said the state was bidding against much larger states for equipment and supplies related to the pandemic. Early on, state officials realized many supplies from the federal government’s Strategic National Stockpile wouldn’t get to Oklahoma because the state’s coronavirus cases were still relatively low at the time.
“It was clear that we were showing up to a gunfight with a butterknife,” Loughridge said in a March interview. “Our first attempt to make a buy of masks, we lost. We had gotten there as quickly as you possibly can, we had the authorized funds and we missed it. I thought, ‘We have a major problem when we have all the states bidding against each other for a limited supply of critical equipment.’ That was a real moment when we thought, ‘OK. We absolutely have to source this whatever it takes.’”
At the time, the state had not yet received money under the federal CARES Act, so it had a problem: How to pay quickly for protective equipment and hydroxychloroquine at a time when nobody knew the pandemic’s effect on the state budget. The medical marijuana fund from patient and business licenses was among the few state financial accounts with a surplus at the time.
In normal times, the state can’t use fee revenue for other government purchases. But the Legislature had granted Stitt additional powers under the Catastrophic Health Emergency Powers Act, a law passed in the wake of the 9/11 attacks but never used in Oklahoma until the COVID-19 pandemic.
At a late April 2020 news conference, Gov. Kevin Stitt described how he directed DeMarco to procure gowns, gloves, N-95 masks and build up the state’s stockpile of equipment.
“We knew we were getting reimbursed for that,” Stitt said at the time. “Also, in early March, hydroxychloroquine was also shown to be a treatment. So we went out and procured that as well. Now there’s some other evidence that it may not be as effective. But I was being proactive and trying to protect Oklahomans.”
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Shipped to Pryor
The hydroxychloroquine shipment was sent to Beggs Pharmacy in Pryor. The health department couldn’t provide any explanation as to why the drug was sent there. The pharmacy’s owner, Derek Sien, referred all questions to the Governor’s Solution Task Force.
Clayton Bullard, who was part of Gov. Kevin Stitt’s coronavirus task force, said the pharmacy’s owner also ran a distributing company that was going to dispense the drug for $1.05 per prescription. That deal never came to fruition. Just weeks later, the U.S. Food and Drug Administration revoked its emergency use authorization of hydroxychloroquine to treat COVID-19.
“The pharmacy lost money on that deal. They didn’t make any money,” Bullard said. “They were going to make money on their distribution fee, but because within four months of that product being acquired, the FDA retracted hydroxychloroquine to be used for COVID issues. So the pharmacy actually sat on it and stored it for close to nine months at their own cost and then never made a dime on it because there was no distribution of it.”
The health department said it had no records of any contracts involving Sien’s A&K Distributors LLC and hydroxychloroquine. Sien and the pharmacy were included in emails related to the hydroxychloroquine purchase last April, including several confirming details of the shipment to Beggs Pharmacy by FFF Enterprises.
Bullard said the hydroxychloroquine shipment is now in Oklahoma City. The health department declined to confirm that, saying the location was secret because of “security concerns.” It did not detail those security concerns.
“Every pill was accounted for, and that inventory has been transferred to Oklahoma City and is sitting in Oklahoma City warehouses,” Bullard said.
Bullard said the state could easily find a buyer for the hydroxychloroquine and suggested the U.S. Veterans Administration would be able to use that size of shipment fairly quickly.
Higher Demand Leads to Drug Shortage
Even as COVID-19 vaccines were quickly put into clinical trials in the spring and summer of 2020, nobody really knew what existing drugs might be helpful to treat the virus spreading rapidly across the country and around the world. The possibilities included hydroxychloroquine, common steroids, certain antibiotics and even zinc.
Among Medicare patients, use of hydroxychloroquine grew rapidly in spring and summer last year, according to a preliminary analysis by the inspector general for the U.S. Department of Health and Human Services. “Investigators found Medicare prescription payments for the drug rose 28% from March to July 2020, compared to the same period a year earlier.”
Much of the increase was from its use in nursing homes.
“Prescribers may have followed hope more than evidence, and patients may have taken unproven drugs without knowing why,” the investigators wrote in a March column.
Former President Donald Trump was among the biggest cheerleaders touting the use of hydroxychloroquine to treat COVID-19. His public comments weren’t backed by the science, which showed limited or no benefits of using the drug for COVID-19. The FDA’s short-lived authorization was limited to dispensing the drug for COVID-19 patients in hospital settings with strict medical oversight.
Still, several governors, including Stitt, put limits on the dispensing of hydroxychloroquine in the first few months of the pandemic. Under an executive order, patients in Oklahoma were limited to a 14-day and then a 30-day supply for each prescription from March to May last year.
A poll by the Lupus Foundation of America found more than half of lupus patients surveyed had issues securing adequate supplies of hydroxychloroquine last summer. The drug appeared on the FDA’s drug shortage list for several months, although it has since been removed. Meanwhile, one pharmaceutical company, Teva, said in December it will no longer manufacture the drug.
The supply issues were alarming for patients and their providers, said Dr. Judith James, vice president of clinical affairs with the Oklahoma Medical Research Foundation. She runs clinics and a research center for patients with lupus and other rheumatic diseases. James said providers had to get waivers from the state to keep getting adequate supplies of hydroxychloroquine for lupus patients. Meanwhile, recruitment for clinical trials that used hydroxychloroquine slowed amid the supply interruptions.
“Last summer, we were very, very worried that our patients were not going to be able to get the medicine,” James said. “We definitely had to fill out additional forms, talk to pharmacies and explain that these patients had been on the medicine long before COVID and we hope will be on long after COVID.”
James said the hydroxychloroquine supplies for patients at the clinic have now returned to normal. By rough calculations, the state’s supply of 1.2 million doses of the medicine would be enough to treat more than 1,600 lupus patients for a full year.
PPE Purchasing Investigations
Attorney General Mike Hunter asked State Auditor and Inspector Cindy Byrd for an investigative audit of the health department last spring. Later in the year, Stitt asked Hunter to look into other coronavirus-related purchases.
Byrd’s office issued a report on March 30 criticizing the health department for not adequately tracking $18.8 million in wire transfers used for buying PPE in the first few months of the pandemic. The report said another $20 million was spent with no records of the equipment ever being received by the agency.
The health department has admitted it didn’t adequately vet some PPE vendors, including a few newly formed companies that popped up to sell supplies and medical equipment with no prior industry experience.
“The Oklahoma State Department of Health also agrees it is not good business practice to pay (a deposit or in full) in advance of receiving goods and in normal circumstances this would not have occurred,” the agency said in its response to the state auditor. “During the pandemic, we temporarily followed common practice to pay a deposit to secure an order for personal protective equipment that was in high demand and essential to obtain to protect frontline workers. This practice is no longer used.”
Hunter filed several lawsuits against a handful of vendors on the agency’s behalf for not fulfilling orders. The latest came on Monday, when Sien’s A&K Distributors was sued over not returning money from a canceled ventilator order from the health department.
Hunter’s office denied an Open Records Act request from Oklahoma Watch for emails and letters from his office to FFF Enterprises regarding the state’s hydroxychloroquine shipment. The attorney general’s office said it couldn’t confirm the existence of such correspondence, but if they did exist, they were exempt from the open records law as investigative files.
Paul Monies has been a reporter with Oklahoma Watch since 2017. He covers state agencies and public health. Call or text him at (571) 319-3289 or email firstname.lastname@example.org. Follow him on Twitter at @pmonies.